Retirement Income for the Wealthy, Middle, and Poor

Abstract

Discussions about retirement income are unfocused because they blur distinctions between the wealthy and the poor, and between the stable-middle and the precarious-middle. The steady-middle earn adequate incomes throughout their working years and save enough for adequate retirement income. The precarious-middle consists of two groups. Low-earners strive to save from low earnings during their working years, but their meager savings place them precariously close to poverty. High-spenders spend their adequate incomes during their working years, failing to save enough for adequate retirement income.

Retirement-income deficiencies are most acute among the precarious-middle and the poor. Mandatory retirement savings plans benefit the precarious-middle by replacing weak self-control with strong outside control, but mandatory retirement savings plans offer little benefit to the poor, who have little from which to save. Help for the poor calls for measures beyond making retirement savings plans mandatory.