Research and Analysis by Joelle Saad-Lessler

Retirement Savings Inequality: Different Effects of Earnings Shocks, Portfolio Selections, and Employer Contributions by Worker Earnings Level
from Social Security Bulletin, Vol. 78, No. 3 (released August 2018)
by Joelle Saad-Lessler, Teresa Ghilarducci, and Gayle L. Reznik

Changes in accumulated retirement savings, particularly in employer-sponsored defined contribution (DC) plan balances, differ by worker earnings levels. Earnings shocks, portfolio diversification, and employer contributions to workers’ DC plans affect retirement savings for lower earners more than for higher earners. The authors match Survey of Income and Program Participation data to Social Security Administration earnings records and find factors underlying the different retirement savings outcomes by earnings level beyond mere differences in earnings.