Are We Facing a Growing Gap Between Rich and Poor Retirees?

Susan Tompor writes in the Detroit Free Press (via the LA Times) today:

The rules of the retirement game just got a sizable overhaul in Congress, giving a nod to the reality that many Americans can’t afford to quit working. The changes aren’t massive enough to put to rest concerns about an upcoming retirement crisis, in which some forecast a growing gap between the haves and have-nots.

Tompor’s article is a nice summary of the new retirement rules, which are indeed mostly a good thing. But is there really an “upcoming retirement crisis?” And although “some” may forecast a growing gap between the haves and the have nots, what do actual projections say about that? The Urban Institute has done several of them based on the MINT retirement model, including distribution estimates for the average retirement income of the middle-class and the affluent as a percentage of the income of the poor:

Surprisingly, not only is the gap between rich and poor retirees not skyrocketing, it’s not even growing. For retirees in 2005, the rich earned about 800 percent of the income of the poor. For retirees in 2062, MINT projects that it’s a little less than 700 percent.

In a different table (A8-12g for those who want to check), you’ll learn that the income of retirees as a percent of the poverty rate is also projected to rise. And the number of seniors under the poverty line is projected to decline.

These are averages, and obviously the retirement income of the poor is nothing to write home about. We should increase Social Security payouts at the bottom of the income ladder to make up for that. However, although you can get different answers about the gap between rich and poor retirees by looking at different projections, the evidence suggests that it will grow by a small amount at most, and probably not all.

A BETTER WAY TO DO THIS?

We have an ambitious $350,000 online fundraising goal this month and we can't afford to come up short. But when a reader recently asked how being a nonprofit makes Mother Jones different from other news organizations, we realized we needed to lay this out better: Because "in absolutely every way" is essentially the answer.

So we tried to explain why your year-end donations are so essential, and we'd like your help refining our pitch about what make Mother Jones valuable and worth reading to you.

We'd also like your support of our journalism with a year-end donation if you can right now—all online gifts will be doubled until we hit our $350,000 goal thanks to an incredibly generous donor's matching gift pledge.

payment methods

A BETTER WAY TO DO THIS?

We have an ambitious $350,000 online fundraising goal this month and we can't afford to come up short. But when a reader recently asked how being a nonprofit makes Mother Jones different from other news organizations, we realized we needed to lay this out better: Because "in absolutely every way" is essentially the answer.

So we tried to explain why your year-end donations are so essential, and we'd like your help refining our pitch about what make Mother Jones valuable and worth reading to you.

We'd also like your support of our journalism with a year-end donation if you can right now—all online gifts will be doubled until we hit our $350,000 goal thanks to an incredibly generous donor's matching gift pledge.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate