Insights Blog

Americans’ Retirement Savings Fall Short By Nearly $500,000

October 27, 2023

Teresa Ghilarducci’s article in Forbes titled, American’s Retirement Savings Fall Short by Nearly $500,000 discusses the shortcomings of the American retirement system and emphasizes the urgent need for reform in the U.S. retirement system to better serve its workers and elders.

The article points out that consistent saving is key to securing retirement income, but starting late requires saving a much larger portion of income. The current system is described as nearly impossible and middle class people will be downwardly mobile into poverty in old age.

The article concludes with a discussion of the newly proposed Retirement Savings for Americans Act, which aims to improve retirement security by providing universal pension coverage, especially for low- and moderate-income workers. Leading the way toward a better system. This bipartisan proposal builds on the recommendations of Teresa Ghilarducci and Kevin Hassett. The plan would put eligible full-time, part-time, and gig workers who don’t have an employer-sponsored retirement plan in an account to contribute 3 percent of income. Most would get a matching contribution of up to 5 percent through a refundable federal tax credit, making it attractive to participate in the plan and making a fairer distribution of federal subsidies for retirement.