by Ronald Stevenson and Barbara Clark Stevenson
More people are saving more money for retirement than they have in the past few decades, according to a recent report from the U.S. Government Accountability Office.
Now for the not so great news. The report, titled Retirement Security: Income and Wealth Disparities Continue through Old Age, found there’s still a lot of ground to cover to get retirement savings where they may need to be.
It said in 1989, about 4% of low-income households and up to 65% of high-income households had set aside money in a retirement account. Those percentages increased to 11% and 86% of households in 2016.
The report largely credits that to more employers offering defined contribution plans, such as 401(k)s and 403(b)s. Another process that gets credit is more employers automatically enrolling employees in their defined contribution plans.
While this is encouraging, the number of low-income households saving for retirement has not returned to the 16% level seen just before the 2007-2009 recession.
The defined contribution plan reigns supreme in terms of use. According to The Vanguard Group’s How America Saves 2019: The Retirement Savings Behavior of 5 Million Participants, more than 100 million Americans are covered by defined contribution plan accounts.
Even so, the GAO report says a significant number of those eligible fail to participate and may be missing out on another valuable opportunity: employer matching contributions.
If you haven’t opened a retirement savings account, there’s still time. If you have access to a defined contribution plan you aren’t using, it’s better to put something away than nothing. And that’s only one option of many that can help you prepare for retirement.
Contact American Financial Investments, LLC today to get started on a strategy that can help take you to retirement and beyond.
About the Authors: Ronald F. Stevenson & Barbara Clark Stevenson own American Financial Security, LLC. They specialize in retirement income planning, Social Security
Everyone at Every Income Level Should Save for Retirement
Prescott Living Magazine
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