One-third of working Americans between the ages of 55 and 65 have no retirement savings, and they are at risk of declining living standards and even poverty within the next decade, according to a study published by the Schwartz Center for Economic Policy Analysis.

The outlook for workers saving in defined contribution plans, defined benefit plans and individual retirement accounts (IRAs) is not bright either, the study finds. The median account balance for older workers with at least one of these accounts is $92,000. Based on this finding, the Schwartz Center projects that income from retirement savings would replace a median 14% of pre-retirement income for these workers, which the organization says is inefficient to maintain pre-retirement living standards.

The study notes, “The small minority that also has DB pension coverage is better prepared with a median 20% replacement rate from their retirement savings.”

The median account balance for workers with at least a DC plan and earning less than $40,000 a year is $35,000. But even among the top 10% of earners, that rate is only $250,000.

Income seems to play a role in access to retirement savings vehicles. The study finds that 50% of older workers earning less than $40,000 have no savings. That rate drops to 20% for workers making between $40,000 and $115,000. Still, 15% of earners making more than $115,00 are not saving in these accounts.

However, the study also factors in Social Security earnings projections.

The organization notes that targets are typically lower for higher earners, because Social Security replaces less of their pre-retirement earnings.  In this sense, “The study assumes a replacement rate target of 85% for workers earning below $40,000, a 75% target for workers earning between $40,000 and $115,000; and a 65% target for workers earning more than $115,000.

Still, the study stresses that, “Without retirement savings, workers below median income will be almost entirely dependent on Social Security and will be at high risk of not only downward mobility in retirement, but also falling into poverty. The picture is not much different for the small minority that has retirement savings.”

Taken together, these stats shed light on an underserved portion of the market, particularly among those earning below median income. However, even participants contributing to retirement savings vehicles would need to boost their savings to secure a comfortable retirement. The task won’t be easy for many, especially considering a wealth of studies indicating more Americans are living paycheck to paycheck, and financial stress is eating away at their health and productivity. Sound communication and engagement around financial wellness and proper retirement savings may push the needle in the right direction.

But the report also stressed potential policy changes. The study cites rising Medicare premiums, Social Security benefits cuts, lack of access to DC plans, and leakage as major factors affecting the health of the retirement savings system as a whole. Thus, more American workers are facing the choice between working longer and facing severe reductions in living standards. The study reports, “The far-reaching effects of an increase in downward mobility and old age poverty include pressure on the social safety net and economic stagnation due to weaker consumer spending.”

The researchers suggest regulators should take a closer look at Guaranteed Retirement Accounts (GRAs). The study describes these as individual accounts that require employers and employees to contribute along with a refundable tax credit provided by the government. “GRAs provide a safe, effective vehicle for workers to accumulate personal retirement savings over their working lives,” the researchers noted.

But considering the uncertainty behind federal tax reform, the future tax treatment of retirement plans still is in question.

The full report “Inadequate Retirement Savings for Workers Nearing Retirement” can be found at EconomicPolicyResearch.org.