July 26, 2014

Low Savings Could Mean Trouble for Many Workers

  • Social Security, established in 1935, is the federal government’s largest program. It represents approximately one-fifth of the federal budget and...

Personal savings are an essential part of good retirement planning, particularly as the needs of an aging U.S. population put increasing strain on the federal budget. Workers can expect to need substantial amounts of money to help pay their living expenses, medical bills and other costs in retirement.

Yet this year’s “Retirement Confidence Survey” by the Employee Benefit Research Institute warns: “A sizeable percentage of workers report that they have virtually no savings and investments.” Well over a third of the respondents -- 36 percent -- reported savings of less than $1,000. 

With the economy strengthening, the percentage of workers who expressed confidence about having enough money for a comfortable retirement had predictably risen from the record lows between 2009 and 2013. But this increased confidence was seen “almost exclusively among those with higher household income.”