Many Americans may find themselves without adequate retirement savings due to rising health care costs, limited Social Security funds, and debt—both personal and public.
The Retirement System
Financial Insecurity is Trending
For an increasing number of Americans, it is getting harder to save enough to live comfortably in retirement. About half of households age 55 and older have no retirement savings—and up to two-thirds of workers may not have saved enough to maintain their standard of living in retirement.
Our 2017 report on the Nation’s Retirement System examines the challenges to saving for a secure retirement.
A look at challenges facing American retirement security, including shifts in employer plans, financial challenges for Social Security, and low individual savings levels.
3 Key Pillars
There are 3 pillars to the current retirement system for most Americans—and they all face challenges.
- Social Security’s retirement program (Old-Age and Survivors Insurance) is projected to be unable to pay full benefits beginning in 2035.
- Private employer-sponsored pension plans (defined benefit plans) are becoming less common—and the federal agency that insures these plans, the Pension Benefit Guaranty Corporation, was almost $76 billion in debt at the end of fiscal year 2017, largely due to the financial difficulties facing many of these plans. Employer-sponsored savings plans (defined contribution plans, such as 401(k)s) are on the rise, but place the responsibility to save and invest on the individual.
- Individuals’ retirement savings outside of employer-sponsored plans are often low or nonexistent, which may increase reliance on federal and state safety net programs. And as the size of the older population grows, so will the need for long-term services and supports.
Trends in Private Sector Retirement Plans since 1975
The Nation's Retirement System: A Comprehensive Re-evaluation Is Needed to Better Promote Future Retirement Security
GAO-18-111SP, Oct 18, 2017
Older Workers: Phased Retirement Programs, Although Uncommon, Provide Flexibility for Workers and Employers
GAO-17-536, Jul 20, 2017
Retirement Security: Better Information on Income Replacement Rates Needed to Help Workers Plan for Retirement
GAO-16-242, Mar 1, 2016
401(K) Plans: Effects of Eligibility and Vesting Policies on Workers' Retirement Savings
GAO-17-69, Nov 21, 2016
Retirement Security: Most Households Approaching Retirement Have Low Savings
GAO-15-419, Jun 2, 2015
- Charles Jeszeck
- Retirement Security and Social Security