Income inequality extends into retirement
While the rat race ends with retirement, one of its principal features extends well past a person’s last day of work.
Income inequality in the United States spills over from the job into the last decades of life, according to a new survey that ranks the differences among U.S. retirees as among the most extreme in the 35 country comparison.
The report being issued Wednesday by the OECD, or Organization for Economic Cooperation and Development, reports levels of inequality in a survey of member countries.
The inequality among older people in the U.S. is among the most extreme, according to the report.
“Inequality has been growing from one generation to the next in the United States,” according to the report. “This is particularly alarming ... as old age inequality among current (U.S.) retirees is already higher than in all other OECD countries, except Chile and Mexico.”
The gap between the top and bottom incomes seems destined to rise, too.
Within each generation of workers, according to the OECD data, inequality rises. For example, researchers tracked U.S. income inequality for four generations: people born in 1920, 1940, 1960, and 1980. For each group, inequality has been more extreme than the previous generation.
Alicia Munnell, director of the Center for Retirement Research at Boston College, said she was not surprised that the U.S. would rank at the extremes for income inequality.
“The big problem in the U.S. is that half of the working population in the private sector has no retirement plan available at work, and people do not save on their own,” Munnell said. “Without any retirement saving, they only have Social Security, and Social Security is getting less generous over time.”