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Retirement plan wealth inequality: measurement and trends

Published online by Cambridge University Press:  31 March 2020

Teresa Ghilarducci ,
Siavash Radpour  and
Anthony Webb Open the ORCID record for Anthony Webb [Opens in a new window]
Teresa Ghilarducci
Affiliation:
Economics, New school, New York, USA
Siavash Radpour
Affiliation:
Economics, The New School, New York, USA
Anthony Webb*
Affiliation:
Schwartz Center for Economic Policy Analysis, New School University, New York, USA
*
*Corresponding author. Email: [email protected]
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Abstract

Using Health and Retirement Study data linked to summary plan descriptions and W-2s, this study reports trends in retirement wealth inequality of older employees 1992–2010. The study identifies and corrects methodological flaws in past research. Retirement wealth is highly unequally distributed; the top lifetime earnings quintile holds half of all retirement wealth, the bottom quintile, only 1%. The top earnings quintile fared better in 2010 than in 1992, whereas bottom-quintile earners fared worse. But retirement wealth inequality mainly reflects inequality within earnings quintiles, resulting from inadequate savings, not outsize accumulations. Systemic flaws reduce median retirement wealth by 84%

Keywords

Inequalityretirement wealth

JEL classification

D14: Household Saving • Personal Finance J32: Nonwage Labor Costs and Benefits • Retirement Plans • Private Pensions D15: Intertemporal Household Choice • Life Cycle Models and Saving H55: Social Security and Public Pensions
Type
Article
Information
Journal of Pension Economics & Finance , Volume 21 , Issue 1 , January 2022 , pp. 119 - 139
Copyright
Copyright © The Author(s), 2020. Published by Cambridge University Press

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