Across generations, middle-class American households have few financial assets, new analysis from National Institute on Retirement Security finds


“In America, the middle class can no longer afford to retire. Middle-class Americans face steep economic inequalities, with ownership of financial assets heavily concentrated among the wealthy,” he said. Tyler bond, NIRS research director. “Now that we have a retirement system largely built around individual ownership of financial assets in 401 (k) accounts, middle-class Americans are struggling to accumulate enough financial assets during their working years. This means the retirement prospects for many members of the middle class. is dark at best. “

Research also finds low numbers when examining average and median financial assets held.

  • For middle-class millennial households in 2019, average financial assets held were $ 17,802, and the median was $ 7,800.
  • Middle-class Gen X households had average financial assets of $ 62,944, and the median financial assets of $ 39,000 in 2019.
  • For middle-class baby boomers, the average amount of financial assets held was $ 93,298 in 2019, while the median was only $ 51,700.

“Baby boomer households are retired or close to retirement, but their assets are well below what is needed to fund a secure retirement,” Bond explained. “A nest egg of $ 51,700, the median amount held by middle-class baby boomers, would only generate 2000 $ annual income over 30 years. This means that many middle-class baby boomer households may find it difficult to retire and face a sharp reduction in their standard of living. ”

Research indicates that implementing pragmatic policy solutions can help middle-class households move on a better path to saving for retirement, including strengthening and expanding social security; protect defined benefit pensions; and ensuring access to a retirement savings plan through an employer.

For this research, the middle class is defined as people between the 30th and 70th percentiles of net worth, or the middle 40%. As in the Blatant inequality report, three generational cohorts are included in this analysis of the middle class: Generation Y, Generation X and Baby Boomers.

The research is based on data from the Federal Reserve’s Survey of Consumer Finances (FCS). It examines the ownership of financial assets, a broader category than pension assets. According to the SCF, the category of financial assets includes liquid assets, certificates of deposit, directly held mutual funds, stocks, bonds, near-liquid assets, savings bonds, whole life insurance. , other assets under management and other financial assets. It does not include physical assets such as a house or a car. The data from this research relates to households rather than individuals.

The National Institute for Retirement Security is a non-profit, non-partisan organization created to contribute to informed policy development by fostering a deep understanding of the value of retirement security for employees, employers and the economy as a whole. Situated in Washington DC, NIRS members include financial services companies, benefit plans, professional associations, and other pension service providers. More information is available at Follow NIRS on Twitter @NIRSonline.

SOURCE National Institute for Retirement Security

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