It is a fact that rich people always have more money to spare for their retirement benefits savings as compared to an average income person. This fact was reiterated recently by a report which shows that the savings gap due to different incomes is rising. The rich are growing richer and the poor are growing poorer as per the report. The report calculated the exact amount of money saved by the families of different earning groups. It studied the savings done by various families during the time span of 1989 to 2013.
How the Retirement Benefits Savings Gap is Increasing?
The report which stated that the retirement benefits savings gap is increasing was compiled by the Economic Policy Institute, known as the EPI at times. The crux of the report is that the rich are growing richer and the poor are growing poorer. This is the phrase that perfectly applies to the current state of the American retirement.
The report also pointed out that the participation of people is quite unequal across varied income groups. In the year 2013, about 9 in 10 families in the top income fifth had some retirement benefits savings as compared to less than one family that has retirement savings and was a part of the lower income fifth.
Gap Between Haves and Have-Nots
The median working age family just had only $5,000 saved in the year 2013 while the amount saved by an 80 percentile family was about $116,000. The 90 percentile family had even more savings at $274,000. The 60 percentile families had $20,100 stashed towards retirement in 2013 while the 70 percentile families had more than $50,000 stashed for the same purpose. The top 1 percent of families are doing better than everyone. They had more than $1,080,000 kept away towards their retirement benefits savings as per the EPI report.
The disclosure of the retirement benefits savings of families within the age of 32-61 was done by savings percentile by EPI. It also studied how the retirement saving capabilities of various income group families have changed in the last few decades. The sample period taken for the study was from 1989 to 2013. During this period, the savings done by the poor families have not increased by much but the savings done by the richest families have grown exponentially.