Analysis Indicates Recession Stalled Retirement Savings
According to an analysis of SCF data by the Center for Retirement Research at Boston College (CRR) despite the increase in automatic enrollment due to the Pension Protection Act of 2006, the percent of eligible employees not participating in their plans ticked up by 2010. At the same time, contributions slipped and leakages through cash outs and hardship withdrawals increased.
These trends, combined with financial turmoil and a weak economy, led to median 401(k)/IRA balances that changed little from 2007 to 2010.
According to the SCF, in 2010, the typical household approaching retirement (ages 55 to 64) had only $120,000 in 401(k)/IRA balances – virtually unchanged from $118,000 in 2007. Those ages 45 to 54 had lower balances in 2010 than in 2007 – $70,000 versus $75,000, and younger households held only $35,000 in 2010 compared to $44,000 in 2007.A report of the CRR’s analysis can be downloaded from here.
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