The divide between the rich and the poor in the United States is widening at an alarming rate. A recent report from the U.S. Government Accountability Office reveals a significant increase in the gap between retirement-account balances for middle- and high-income older households from 2007 to 2019.
The report focused on households of workers aged 51 to 64, providing a comprehensive analysis of the situation. Shockingly, while the median account balance for high-income older households nearly doubled from $333,000 to $605,000 during this period, middle-income older households experienced stagnant growth, with a median account balance of only about $64,300.
This eye-opening report, titled "Retirement Account Disparities Have Increased by Income and Persisted by Race Over Time," also sheds light on the concerning reality that a significant portion of Americans have little to no retirement savings.
According to the findings, as of 2019, a staggering nine out of 10 lowest-income older households had no savings in a retirement account. What's more concerning is that the share of these households with any retirement-account balance actually decreased from 21% in 2007 to a mere 10% in 2019.
The U.S. Government Accountability Office conducted this vital research at the request of Senators Bernie Sanders and Sheldon Whitehouse. Their concerns centered around the unfair distribution of federal tax incentives for retirement savings. It appears that these incentives largely benefit higher-income workers while offering little assistance to lower-income workers striving to save for their retirement.
The report serves as a powerful reminder that urgent action is required to address this growing wealth disparity and ensure a more equitable financial future for all Americans.
Retirement Inequality: A Growing Crisis in America
The growing crisis of retirement inequality demands urgent attention. It is not enough to simply acknowledge the problem; concrete steps must be taken to address the systemic issues that perpetuate this disparity. By working together, lawmakers, experts, and advocates can strive for a future where all Americans can retire with dignity and financial security.