A recent study has underscored a growing disparity in retirement savings between median-income workers earning $60,000 annually, based on whether they have access to employer-sponsored retirement plans. The study reports that those with access to such plans contribute an average of 7.4% of their salaries, while their counterparts without these benefits save a mere 0.9% each year.
By the time they reach the age of 65, workers with employer-sponsored plans could amass a retirement fund of approximately $710,900. In contrast, those without such benefits may only accumulate around $86,500. This results in a striking difference of nearly $625,000, which does not take into account potential employer matches.
The study further emphasizes that retirees typically need about 75% of their pre-retirement income to maintain a comparable standard of living. Consequently, without workplace retirement plans, many American workers are likely to face substantial shortfalls in their retirement savings.
In light of this stark contrast, the study underscores the critical role of saving tools in achieving adequate retirement savings. It suggests alternatives such as emergency savings and financial advisor-guided options to help meet the average American worker’s retirement needs. These measures may provide vital lifelines for those who lack access to employer-sponsored retirement plans and are struggling to save sufficiently for their later years.
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Source: Investing.com
