A Snapshot of the Current US Retirement Market

gen x income gapAs of Sept 30, 2010:

  • Total U.S. retirement assets: $16.6 trillion (up 6.1% from $15.6 trillion in 2Q2010)
  • 60% of households nearing retirement age have 401(k)-type accounts
  • Retirement savings account: for 36% of all household financial assets in the United States
  • 49 Million Households Own IRAs
  • IRAs hold $4.5 trillion (up from $4.2 trillion at the end of 2Q2010)
  • Most IRAs are held as traditional IRAs

By 2015, it is estimated that IRA Assets will reach $7.2 trillion – this includes today’s assets, Roll overs, contributions, market appreciation, and return distribution.

On February 19, 2011, Wall St. Journal reported on retirement income short falls:

  • The median household of age 60-62 has less than one-quarter of what is needed in a 401(k) account to support the standard of living in retirement
  • Many people are postponing retirement (some into their 70-s), following cost saving measures and other bigger sacrifices, and taking bigger risks with their current investments
  • A 401(k) also requires steady, significant savings
  • Unlike corporate pension plans, which are guaranteed by the U.S. government, 401(k) plans have no such backstop
  • As a median measure estimate, Social Security will provide as much as 40% of pre-retirement income and the rest thru income could contribute to reducing the retirement income gap.

(Sources: Investment Company Institute, FRB, NAGDCA, ACLI, McKinsey, Cerulli, WSJ and IRS)

image credit: Fidelity

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