4 Reasons Americans’ 401(k) Balances Are Too Small
Only around half of all households have 401(k) accounts. Even for those who do, the median 401(k) balance for those approaching retirement was just $135,000 in 2016. With few employees having access to defined benefit pension plans to provide guaranteed income, and with average Social Security benefits providing an income just above poverty level, it’s clear there’s a retirement crisis in America.
The Center for Retirement Research identified four key reasons why 401(k) balances are too small for most Americans. Fortunately, it’s possible to overcome the challenges causing 401(k) balances to be too small and to save much more than the median. Let’s take a closer look at those four items, along with some suggestions for individual investors to solve their retirement saving problems.
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