Income inequality for those in their working years has soared. So has inequality in the distribution of retirement resources. Columnist hiltzikm explains:
Is the “retirement crisis” just a scare story? That’s what conservatives would like you to believe as they rail against proposals from progressives in Congress to expand and increase Social Security.in the conservative National Review that there’s no need to expand Social Security benefits because “Americans’ retirement incomes and retirement savings have never been stronger.”
He asserts that these are rising and will continue to do so as Gen-Xers--those now between 45 and 53 years old -- move into retirement. Social Security Administration estimates cited by Biggs indicate that the median retirement income for today’s 80- and 90-year-olds is 111% of pre-retirement income, but for Gen-X it will be 115%, which doesn’t “indicate anything like the retirement crisis that Americans are being told they face,” he writes.
Morrissey’s first chart, shown above, validates Biggs’ point that overall retirement assets have grown -- in fact, almost doubled as a share of personal income from 1989 to 2016. That’s largely because of the advent of 401-style defined contribution plans, through which workers invest a portion of their own wages in investment accounts they manage themselves .
Participation in 401 plans is heavily skewed toward higher-income and white workers. About 70% of the top fifth of income earners participate, but only 10% of the bottom fifth; 51% of white workers participate but only 33% of black workers and 28% of Latinos. Participation in traditional defined benefit pensions is more equal, though not free of inequality.
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