The Boston College Center for Retirement Research has released an update on its National Retirement Risk Index, and the results aren't pretty. With a rising stock market and stablizing housing prices, we might expect a strong recovery in retirement savings and assets. Unfortunately, they don't seem to be having much effect, at least not for the majority of workers. That's mainly because 90 percent of all stocks are owned by the top one-third of the income distribution, and housing prices have risen only 6 percent, in real terms, since 2010. And with the median family actually earning less than they did 15 years ago, again in real dollars, it should be no surprise that retirement assets haven't grown.
The graph below (Figure 1 from the report) shows what this looks like across the age spectrum. Each line represents a given year, showing the ratio between wealth and income by age group. The yellow line, for 2013, suggests that across almost the entire age spectrum, Americans have fewer assets relative to their income than at any other time in the last 30 years.
It's not a pretty picture: In order to get back on track to enjoy a financially secure retirement. Americans will need to save more or work longer.
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