From fees to early withdrawals, here are 4 major reasons why those about to retire don't have enough money in their 401(k)s. (via CNBCMakeIt)
Thanks to structural and personal reasons, many workers are falling short of adequately funding their retirement accounts, according to the authors of a new report, titled"A 25-year-old median earner in 1981 who contributed regularly would have about $364,000 by age 60 [under ideal conditions], but the typical 60-year-old in 2016 had less than $100,000," the authors write.
The paper looks at the potential reasons for the discrepancy, using data from the U.S. Census Bureau's Survey of Income and Program Participation and tax records. One of the biggest factors is that the 401 system itself is still relatively new: Though workers growing up now learn about the importance of contributing from a young age, 401s came into existence in 1978 and. Workers in their 60s weren't always able to benefit from 401s, especially in their earliest working years.
The second culprit of low savings, per the report, is the fact that not all workers have a 401 or IRA. And even for those that do, there are often gaps in coverage. In 2018, 35% of private sector workers
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