50% of American workers don’t have retirement accounts

The Street

Teresa Ghilarducci, Professor of Economics at The New School for Social Research, joins TheStreet to break down why so many Americans don’t have retirement accounts.

Transcript

00:00 So tell me, what are some of the biggest challenges facing Americans when it comes to retirement right now?

00:07 Saving for retirement is the biggest challenge, but it's followed very closely by having to decide where to invest.

00:18 And that's followed closely by, if you accumulate even a million dollars, how to deaccumulate.

00:24 So actually the challenges are simple. It's just accumulation, investment, and deaccumulation.

00:31 It's the whole package, the do-it-yourself package, that is the biggest barrier to people's retirement.

00:38 And it's very unusual. It's very American. There's no other country that does it this way.

00:43 That requires so much acumen, discipline, and worry and anxiety on its workers than the United States.

00:53 Half of people don't have retirement accounts at work, and that's been true for decades.

00:59 So it's not getting any better. There is absolutely no sign that employers feel they have to have a retirement account at work.

01:07 More and more people, if you think about it, are working in industries where they don't have to compete for workers.

01:14 Or they compete for workers, they could care less if they come and go.

01:17 Amazon actually has a business model of keeping people in the warehouse for only six or seven months.

01:23 People are gig workers, contingent workers, independent workers.

01:27 But they do, almost everybody pays into Social Security.

01:31 So if we just had a system that for every time you get a Social Security credit,

01:36 you also got some financial credit in a retirement account, then we could solve the problem.

01:42 But right now we rely on employers voluntarily sponsoring the 401(k), and then that's not enough.

01:51 And then the worker has to voluntarily decide to be in the 401(k). So it's two decisions.

01:57 [BLANK_AUDIO]

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