--- title: The Growing Divide Between the Retirement Elite and Everyone Else description: Americans are on track to replace 60% of income in retirement, according to the latest Lifetime Income Score study, by Empower Retirement. authors: - name: Penelope Wang url: https://money.com/author/penelope-wang/ at_money_since: 2009 articles: 101 covers: - Retirement - Career Advice - Economy and Politics - Housing - Insurance - Investing - Lifestyle - Personal Finance - Taxes social: - https://x.com/PennyWriter former_staff: true published: '2015-03-23T10:00:06.000Z' modified: '2024-04-16T05:33:17.000Z' section: Retirement tags: - 401(k)s - Lifetime Income Score - retirement income - retirement planning - Savings word_count: 622 canonical: https://money.com/retirement-divide-elite/ type: Article source: structured-blocks --- > **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![empty and full transparent piggy banks](https://img.money.com/2015/03/150323_ret_divide.jpg) There's a growing retirement savings gap between workers with 401(k)s and those without. Overall the typical American worker is on track to replace about 58% of current pay through savings at retirement. That’s according to a new Lifetime Income Score [study](http://www.businesswire.com/news/home/20150323006018/en/Working-Americans-Benefit-Broader-Retirement-Income-Assessment#.VRBBkJRdUvQ), by Empower Retirement, which calculated the income workers are on track to receive from retirement plans and other financial assets, as well as Social Security benefits. “Those who have workplace plans like 401(k)s aren’t doing too badly, but there’s a big savings deficit for those who don’t have them,” says Empower president Ed Murphy. (Formed through a recent merger, Empower combines the retirement services of Putnam, Great-West and J.P. Morgan.) Those with access to a 401(k) or other retirement plan had lifetime income scores of 74%, while those lacked plans had an average score of just 42%. It's one reason this year’s overall score of 58% is a slight dip from last year’s score of 61% . Living well on just 58% of current income is certainly possible—many retirees are doing just fine at that level. But financial planners typical suggest aiming for a 75% to 80% replacement rate to leave room for unexpected costs. And for many workers, it's possible to [close the savings gap](https://money.com/the-amazing-result-of-actually-trying-to-save-money/) by stepping up 401(k) contributions by staying on the job longer. But truth is, most workers end up retiring [well before age 65,](http://crr.bc.edu/briefs/what-is-the-average-retirement-age/) and [few have enough saved](http://crr.bc.edu/briefs/nrri-update-shows-half-still-falling-short/) by that point. The least prepared workers, some 32% of those surveyed, were on track to receive just 38% of their income in retirement, which would be largely Social Security benefits. By contrast, an elite group of workers, some 20%, are on track to replace 143% of their current income, Empower found. And it's not just those pulling down high salaries. "The key success factors were access to a 401(k) and consistently saving 10% of pay, not income," Murphy says. Access to a financial adviser also [made a big difference](http://content.money.com/wp-content/uploads/2015/03/empowerinstitute_lifetime_income_score_v_2015.pdf) in whether workers were on track to a comfortable retirement income. Those who worked with a pro were on track to replace 82% of income vs 55% for those without. And for those with a formal retirement plan, their lifetime income score hit 87% vs the average 58%. For all retirement savers, however, health care costs are a looming problem. Only 21% of those ages 60 to 65 reported having none of six major medical issues, such as diabetes or tobacco use. For the typical 65-year-old couple, health care expenses, including Medicare premiums and out-of-pocket costs, might reach $220,000 over the course of retirement, according to [a Fidelity analysis](https://www.fidelity.com/viewpoints/retirement/retirees-medical-expenses). Those in worse health can expect to pay far higher costs, which means you should plan to save even more. Here are other key findings from the Empower study: - Nearly two-thirds of workers lack confidence about their ability to cover health care costs in retirement - Some 75% say they have little or no concern about job security, vs. 60% in 2012. - Some 72% of workers are somewhat interested or very interested in guaranteed income options, such as annuities. - The percentage of workers considering delaying retirement is falling—some 30% now vs. 41% from a peak in 2012. - Many are hoarding cash, which accounts for 35% of retirement plan assets. For those without advisers, that allocation is a steep 55%. Clearly, estimating your retirement income is crucial to achieving your financial goals—and [studies have shown](http://siepr.stanford.edu/publicationsprofile/2739) that going through that exercise can help spur saving. More 401(k) plans are offering tools and other guidance to help savers estimate their retirement income and help you choose the [right stock and bond allocation](https://time.com/nextadvisor/investing/retirement/). For those who aren't participating in a 401(k) plan, try the [T. Rowe Price retirement income calculator](https://www3.troweprice.com/ric/ricweb/public/ric.do), which is free. ```json { "@context": "https://schema.org", "@graph": [ { "@type": "BreadcrumbList", "@id": "https://money.com/retirement-divide-elite/#breadcrumb", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://money.com" }, { "@type": "ListItem", "position": 2, "name": "Retirement", "item": "https://money.com/retirement/" }, { "@type": "ListItem", "position": 3, "name": "Retirement Planning", "item": "https://money.com/retirement-planning/" }, { "@type": "ListItem", "position": 4, "name": "The Growing Divide Between the Retirement Elite and Everyone Else" } ] }, { "@type": "WebSite", "@id": "https://money.com/#website", "url": "https://money.com", "name": "Money", "publisher": { "@id": "https://money.com/#organization" } }, { "@type": "WebPage", "@id": "https://money.com/retirement-divide-elite/#webpage", "url": "https://money.com/retirement-divide-elite/", "name": "The Growing Divide Between the Retirement Elite and Everyone Else", "isPartOf": { "@id": "https://money.com/#website" }, "datePublished": "2015-03-23T10:00:06.000Z", "mainEntity": { "@id": "https://money.com/retirement-divide-elite/" }, "inLanguage": "en-US", "breadcrumb": { "@id": "https://money.com/retirement-divide-elite/#breadcrumb" }, "dateModified": "2024-04-16T05:33:17.000Z" }, { "@type": "Article", "headline": "The Growing Divide Between the Retirement Elite and Everyone Else", "articleSection": "Retirement", "image": [ { "@type": "ImageObject", "url": "https://img.money.com/2015/03/150323_ret_divide.jpg", "width": 2758, "height": 1782, "caption": "150323_RET_Divide" } ], "author": [ { "@type": "Person", "name": "Penelope Wang", "url": "https://money.com/author/penelope-wang/", "@id": "https://money.com/author/penelope-wang/#author", "image": "https://money.com/content.money.com/wp-content/uploads/2014/05/140530_bio_author_wang-e1474648568464.jpg?crop=0px%2C0px%2C190px%2C190px&resize=640%2C640&quality=85&strip&ssl=1", "sameAs": [ "https://x.com/PennyWriter" ] } ], "publisher": "https://money.com/#organization", "datePublished": "2015-03-23T10:00:06.000Z", "description": "Americans are on track to replace 60% of income in retirement, according to the latest Lifetime Income Score study, by Empower Retirement.", "abstract": "Americans are on track to replace 60% of income in retirement, according to the latest Lifetime Income Score study, by Empower Retirement.", "@id": "https://money.com/retirement-divide-elite/", "inLanguage": "en-US", "dateModified": "2024-04-16T05:33:17.000Z", "wordCount": 622, "keywords": [ "401(k)s", "Lifetime Income Score", "retirement income", "retirement planning", "Savings" ], "about": [ { "@type": "Thing", "name": "Retirement", "sameAs": [ "https://en.wikipedia.org/wiki/Retirement" ] }, { "@type": "Thing", "name": "Retirement planning", "sameAs": [ "https://en.wikipedia.org/wiki/Retirement_planning" ] } ] } ] } ```