Insights Blog

The Retirement Wealth Inequality Machine

July 13, 2017

What is the “retirement wealth inequality machine?”

The result of a failed retirement savings system, according to retirement expert and economist Teresa Ghilarducci in an interview with INET. In short, the retirement system in the United States is increasingly financialized - dependent on individual assets rather than social insurance - as pensions have given way to 401(k)s. The result? People are not able to save enough. Half of americans that are currently working have less than $5,000 saved for retirement, and otherwise would only have $12,000 per year to rely on from Social Security.

Over 90% of Americans do not have enough saved. As a result, they face the daunting choice of either experiencing downward mobility - and possibly deprivation - in their old age, or working later in life than anyone would hope or dream.

ReLab documents the status of older workers, including their state of employment and working conditions, as well as class, race, and gender divides. Half of older workers report having physically demanding jobs, and those without enough savings are forced to continue working with poor conditions and compensation.

Ghilarducci’s policy proposals to reform our failed retirement system are based in law, history, politics, and the ethics of human well-being. She adds retirement to the list of historically disputed territory that includes the weekend, the length of the working day, paid sick leave, and vacation days. She calls for universal, mandatory, and portable Guaranteed Retirement Accounts (GRAs) in addition to strengthening Social Security to ensure a dignified retirement for all.