Will it tarnish the golden years?

Executive Summary

A collision is coming between two trends: people in the United States are living longer, but they are not saving more to cover their greater longevity. The result is what economists call the retirement gap – the difference between what people will need when they stop working and what they will have available. In fact, more than 40 percent of those between the ages of 32 and 61 have no retirement savings at all, according to one estimate. A few decades ago, most retirees could rely on company pension plans. But today, fewer employers are providing these defined-benefit packages that guarantee a set payout, and are instead offering 401(k)s and other plans that require employees to contribute and manage their own money for retirement. These plans sometimes have barriers to participation, require more of the employee financially and do not always include an employer match. Social Security, the government-run retirement program, covers only about 40 percent of pre-retirement income on average and faces future funding challenges of its own. The result is that the retirement gap continues to grow.

Some key takeaways:

  • The average lifespan of a 65-year-old in the United States today is between 84.3 years and 86.6 years, depending on gender, while the average retirement age is 63.

  • Millennials should be saving more for retirement than previous generations, yet two-thirds have no retirement savings and Millennials are more likely to encounter barriers to entry into company retirement plans.

  • Participation in retirement savings plans rises when employees are automatically enrolled, and some states are adopting programs to promote auto-enrollment.

  • Click here to listen to an interview with author Heather Kerrigan or click here for the transcript.

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Resources for Further Study



Ellis, Charles, Alicia Munnell and Andrew Eschtruth, “Falling Short: The Coming Retirement Crisis and What to Do About It,” Oxford University Press, 2014. Experts explore the nature of the retirement crisis in America, how savings have declined and solutions – both individual and policy-driven – that could help boost retirement savings.

Russell, James W., “Social Insecurity: 401(k)s and the Retirement Crisis,” Beacon Press, 2014. A professor of political science and sociology addresses the flaws in the 401(k) system and discusses strategies to overcome the retirement savings crisis it has created.


Bukhari, Jeff, “Why Today’s Retirement Savers Face A ‘Longevity Gap,’” Fortune, April 19, 2017, http://tinyurl.com/yajlnu6m. A writer looks at the disparity in retirement savings between high- and low-income earners and the impact of rising life expectancy on retirement funds.

Elkins, Kathleen, “Here’s how much the average family has saved for retirement at every age,” April 7, 2017, CNBC, http://tinyurl.com/yd2bk5e2. The author reviews a report by the Economic Policy Institute, a liberal think tank, on average retirement savings versus how much is needed for a comfortable retirement.

Lobosco, Katie, “66% of Millennials have nothing saved for retirement,” CNN, March 7, 2018, http://tinyurl.com/ybawsq39. The writer reviews current reports and data regarding how unprepared Millennials are for retirement.

Maciag, Mike, “Think Income Inequality Is Bad? Retirement Inequality May Be Worse,” Governing Magazine, March 2018, http://tinyurl.com/ybwle876. The author explores the growing inequality in retirement savings and the solutions that states are implementing to address the concern.

Steyer, Robert, “Non-traditional, contract workers face greater retirement challenge,” Pensions & Investments, June 27, 2017, http://tinyurl.com/yd9rofay. A financial reporter provides an interactive look at the difficulties workers in the gig economy face when attempting to save for retirement compared with their counterparts in more traditional employment.

Reports and Studies

“Retirement Plan Access and Participation Across Generations,” Pew Charitable Trusts, Feb. 15, 2017, http://tinyurl.com/ybvsq2na. The report delves into the variance among generations in their retirement savings habits and the impact of employer and public policy on such savings.

Brown, Jennifer Erin, “Millennials and Retirement: Already Falling Short,” National Institute on Retirement Security,” February 2018, http://tinyurl.com/y795ga9b. The researcher analyzes the current retirement savings habits of Millennials, explores barriers to additional savings and proposes solutions to help the generation save more.

Gale, William G., Sarah E. Holmes and David C. John, “Retirement Plans for Contingent Workers: Issues and Options,” Brookings Institution, Sept. 23, 2016, http://tinyurl.com/y7ep28du. Researchers discuss the difficulty nontraditional workers have in saving for retirement and possible policy options to boost their participation in retirement plans.

Morrissey, Monique, “The State of American Retirement,” Economic Policy Institute, March 3, 2016, http://tinyurl.com/yac8uy42. Analysis and trend charts outlining the retirement outlook in America and the economic and policy shifts that have affected savings.

Munnell, Alicia H., and Wenliang Hou, “Will Millennials Be Ready for Retirement?” Center for Retirement Research of Boston College, January 2018, http://tinyurl.com/yclfgohe. Researchers explore the impact of the current economy and barriers to retirement savings on Millennials.

The Next Step

Gig Economy

Konish, Lorie, “These gig jobs could boost your bottom line in retirement,” CNBC, April 22, 2018, https://tinyurl.com/y8wfq4th. Baby Boomers seeking retirement income make up a large portion of the “gig economy” – those workers who take on part-time or temporary jobs.

Milliken, Kaitlin, “Lawmakers eye retirement help for gig economy workers,” The Hill, Feb. 6, 2018, https://tinyurl.com/y7del38y. Experts told a Senate subcommittee that gig economy workers should receive retirement benefits, but they were divided over how to achieve that goal.

Nova, Annie, “The gig economy is lacking in this one important respect,” CNBC, Feb. 18, 2018, https://tinyurl.com/ya32aggu. As the number of independent contractors in the workforce grows, so are questions about the lack of employer-provided retirement benefits.

State Efforts

Carrns, Ann, “For Workers Without Retirement Savings, State-Run I.R.A.s Can Pay Off,” The New York Times, April 20, 2018, https://tinyurl.com/ydxynelr. A handful of states have implemented or taken steps toward offering automatic individual retirement plans for private-sector workers whose employers do not offer them.

Fox, Justin, “Wisconsin’s Pension System Works for Everyone,” Bloomberg, May 9, 2018, https://tinyurl.com/ya43bo3c. Wisconsin’s state pension system, which carefully balances risk and safety, is a good model for states struggling with large pension funding gaps, says a Bloomberg columnist.

Silberstein, Rachel, “New York to launch retirement plan for private sector,” The Times Union, April 19, 2018, https://tinyurl.com/y73blyae. New York state is planning on introducing a state-facilitated retirement program by 2020 in response to growing concerns about Social Security and the expanding gig economy.


601 E St., N.W., Washington, DC 20049
An organization focused on providing information to help those age 50 and older live well in retirement.

The Aspen Institute
One Dupont Circle, N.W., Suite 700, Washington DC 20036
Global nonpartisan think tank exploring best practices and promoting dialogue and leadership on current issues.

Boston College Center for Retirement Research
140 Commonwealth Ave., Chestnut Hill, MA 02467
Research institute studying the economic and behavioral issues affecting individual retirement income.

Brookings Institution
1775 Massachusetts Ave., N.W., Washington, DC 20036
Public policy institute conducting research on domestic and global issues.

Economic Policy Institute
1225 I St., N.W., Ste. 600, Washington, DC 20005
Liberal think tank that does research on issues affecting the economic well-being of low- and middle-income workers.

Employee Benefit Research Institute
1100 13th St., N.W., Ste. 878, Washington, DC 20005
A research organization that seeks to enhance employee benefit programs and the public policy that supports them.

National Bureau of Economic Research
1050 Massachusetts Ave., Cambridge, MA 02138
Nonpartisan organization conducting economic research for businesses, academics and policymakers.

National Institute on Retirement Security
1612 K St., N.W., Ste. 500, Washington, DC 20006
Organization providing research and information on retirement finances to enhance understanding and foster informed policymaking.

The Pew Charitable Trusts
2005 Market St., Ste. 1700, Philadelphia, PA 19103
Research institute seeking to provide evidence-based analysis on national and international issues.

DOI: 10.1177/237455680416.n1