With the stock market up, the housing market largely recovered, and unemployment down, you’d think Americans would be in better shape to retire than they were in 2007. The opposite is true, according to a study released today by the National Institute on Retirement Security.
While the value of 401(k) retirement savings accounts and IRAs hit a record high of $11.3 trillion at the end of 2013, the average American household isn’t sharing in that wealth. Half of households haven’t saved anything.
While those of us lucky enough to have workplace retirement plans have benefited from the long bull market, a huge swath of America doesn’t have retirement accounts such as 401(k)s or IRAs. Nearly 40 million working-age households don’t have any retirement accounts, the report says.
Whether someone has an account is closely tied to his or her income and wealth.
Households with accounts have annual income that’s 2.4 times higher than those that don’t. The median retirement account balance for all households is $2,500.Even saver households haven’t saved enough.
For savers closest to retirement (from age 55 to 64), those with retirement accounts had a median balance of $100,000 in 2010. That’s up to $104,000 today. Households that don’t have retirement-specific accounts, though, are doing far worse in overall savings: They have about $14,500 today, up from $12,000.
We’re in trouble