Are Low-Wage Workers Destined for Low Income at Retirement?

Publication Date: September 2008

Publisher: Tax Policy Center

Author(s): Barbara Butrica; Eric Toder

Research Area: Economics

Keywords: Elderly; Economic Well-being; Employment; Retirement/Pensions

Type: Report


Low-wage workers find it difficult to save for retirement. Without savings, they will have to rely on Social Security and pensions. Yet these income sources are based on earnings, which means that low-wage workers will have lower Social Security and pension benefits than higher-wage workers. This brief assesses whether boomers with low earnings between ages 22 and 62 are destined for low income at age 67. We find that nearly two-thirds of this group will end up with low income at retirement, but more than one-third will manage to defy the odds and escape being among the lowest-income older Americans.