July 10, 2012
--- Data from the 2010 Survey of Consumer Finances (SCF)
suggests retirement savings progress has slowed and even reversed in the wake
of the financial crisis. ---
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, according to an
analysis of SCF data by the Center for Retirement Research at Boston College
(CRR). 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.
The typical household approaching
retirement (age 55 to 64) had only $120,000 in 401(k)/IRA balances in 2010,
virtually unchanged from $118,000 in 2007, the SCF data showed. Those age 45 to
54 had lower balances in 2010 than in 2007 ( $70,000 vs. $75,000), and younger
households held only $35,000 in 2010 compared with $44,000 in
A report of the CRR’s analysis can
be downloaded here.