The mean value of US retirement accounts was $255,200 in 2019, the most up-to-date figure from the Federal Reserve’s family finances survey. But that figure hides huge disparities in savings. Less than 40% of families in the bottom half of the Fed’s income brackets were enrolled in a retirement plan, compared with more than 80% of upper-middle-income families and more than 90% of families in the top 10%.
Some 42% of Americans age 56-64 have zero retirement account savings, according to the US Census Bureau. Latino (28.3%) and Black (36.1%) workers have the lowest savings rates.
“There’s no rational argument for allowing wealthy executives to shelter unlimited amounts of compensation from taxes while ordinary workers have strict limits on their annual 401(k) contributions,” said report co-author Sarah Anderson, global economy director of the Institute for Policy Studies. “Nothing but the power of corporate leaders to rig rules in their favor can explain this double standard.”
“Rather than giving corporate CEOs unfair special retirement tax benefits not available to those they employ, Congress should eliminate the cap on payroll taxes paid by corporate executives so that Social Security benefits can be strengthened, especially for the 40% of American workers for whom Social Security is their sole retirement income,” said report co-author Scott Klinger, Jobs With Justice senior equitable development specialist.