The gap between the retirement “haves” and “have-nots” has grown since the recession, according to a report from the Economic Policy Institute.
According to an EPI chartbook, in 1995, 79 percent of families in the top fifth income percentile has retirement account savings, while only 10 percent in the bottom fifth income percentile had retirement savings. In 2013, the gap widened with 88 percent of families in the top fifth income percentile with retirement savings, compared with eight percent in the bottom income fifth.
The EPI reports the shift from traditional pensions to individual savings had widened retirement gaps. That’s largely due in part to the decline in participation of employer-based retirement plans in the new millennium.
The EPI reports workers who are in the higher income brackets have a higher investment-risk tolerance, receive larger tax breaks for saving and are more likely to work for employers who offer generous plans and matches.