Public debate about the U.S. retirement crisis has led to myths that exaggerate the problems and demonize American workers, a J.P. Morgan executive said today.
Preliminary data from an ongoing Employee Benefit Research Institute survey shows that employees who have worked at the same job for 20 to 30 years with both an IRA and a 401K have an average nest egg of $400,000, J.P. Morgan Asset Management Global Head of Retirement Michael Falcon said at the Insured Retirement Institute seminar in Washington, D.C..
The savings behavior of Americans should not be “demonized,” Falcon said, noting that people who have consistently contributed to 401Ks are accumulating significant sums of money.
“We’re not just looking at high-income employees,” he said.
He added there are also myths surrounding defined-benefit plans.
“They were never as widespread as people think,” said Falcon, noting at the peak roughly 40 percent of American workers had defined-benefit packages at work while now the number has shrunk to around 20 percent.
The executive pointed out defined benefit savings are still important sources of wealth for 38 percent of people over 70.