“Those that are [saving], on average, what they have saved will afford them like $1,000 a month of actual cash while they’re in retirement,” Geis said.
The report found that the median retirement account balance for 55-to-64-year-olds is $120,000. When divided over 15 years, that would generate a modest distribution of less than $1,000 per month and even less for those who outlive their life expectancies.
The lack of retirement preparedness is leading to a path of a looming “crisis,” Geis said, as Social Security is projected to be depleted by 2034 and “there’s a huge demographic that aren’t likely to meet their savings goal.”
Among those 60 years old or older, 13% have no retirement savings. That number increases to 17% among 45 to 59-year-olds, 26% among 30 to 44-year-olds, and 42% for those between the ages of 18 to 29.
There are not cost-efficient and affordable plans available’
There are several factors that have contributed to this bleak outlook awaiting for many Americans.
According to PwC research, a major one are the expenses for employer-sponsored retirement plans provided by small business owners.
“There are not cost-efficient and affordable plans available for small businesses, which is still a very large segment of the U.S. economy,” Geis said.
The proposed solution? Geis suggested having more available multi-employer defined contribution plans in the marketplace for employees of several small businesses to be able to pool their resources similar to the plans available to employees of medium and large-sized corporations.
“If there was greater adoption of these multi-employer plans and greater participation, you’d get the saving rate up just by that alone,” she said.