Despite a decade since the financial crisis where the stock market that has tripled, interest rates remain near the floor, and employment has recovered dramatically, the American middle class has been economically stagnant. Employment statistics do not capture low participation in the workforce, and the rising costs of higher education keep young people in debt for many years.
Meanwhile, the solution of moving people to defined contribution plans — known as individual retirement accounts (IRAs) or 401(k)s) in the US — may not be working because savers are not putting enough money into the plans. A third of Americans between the ages of 56 and 64 have no retirement savings at all. Roughly half have less than $100,000 — nowhere near enough money to guarantee a good income in retirement. America’s financial and economic recovery from the disaster of a decade ago has been much stronger and faster than many thought possible at the time. But there are good reasons why most Americans feel no financially healthier now than they did then.