A Dirth of Retirement Savings
Data seemingly indicate that many people are resigned to the notion that their retirement income will largely come from Social Security. For instance, a recent study by the non-partisan US Government Accountability Office or GAO indicates that as many as half of all households with Americans 55 years old or older have no retirement savings at all.
The GAO study is entitled Most Households Approaching Retirement Have Low Savings. However, the conclusion that as many of half of all households with older Americans have no retirement savings is misleading. As indicated by Forbes, the GAO only measures only one source of retirement income – retirement accounts like 401Ks and IRAs.
By that definition, it’s true that many households lack any savings. For instance, the Federal Reserve’s Survey of Consumer Finance for 2013 indicates that only 53 percent of households aged 55 to 64 had savings in retirement accounts. But retirement accounts are not the only form of retirement saving.
Many Americans still have traditional defined benefit pensions – for instance, many of the 22 million Americans who work for federal, state or local governments. These people make up 14 percent of the workforce. If one includes savings that take this or similar forms, about three in four older households have some form of retirement savings.