The State of American Retirement Savings

Today, many Americans rely on savings in 401(k)-type accounts to supplement Social Security in retirement. This is a pronounced shift from a few decades ago, when many retirees could count on predictable, constant streams of income from traditional pensions (see “Types of retirement plans” box). This chartbook assesses the impact of the shift from pensions to individual savings by examining disparities in retirement preparedness of working-age families, focusing especially on retirement account savings. The trends exhibited in these figures paint a picture of increasingly inadequate retirement savings for successive generations of Americans—and large disparities by income, race, ethnicity, education, and marital status.

Retirement wealth has not grown fast enough to keep pace with an aging population and other changes, and the shift from traditional pensions to individual savings has widened retirement gaps. Decades after the number of active participants in 401(k)-style plans edged out those in traditional pensions, 401(k)s are not delivering substantial income in retirement, and that income is not equally shared.

Economic Policy Institute