Outside of homeownership, retirement savings are the most important way middle-class workers and their families build wealth in the United States. But this second pillar of wealth creation is woefully inadequate for most workers to prepare for a financially secure retirement. What’s worse, the coronavirus pandemic and resulting recession are forcing many workers to tap their savings just to stay financially afloat.

Thirty percent of Americans with a retirement savings account withdrew a portion of their savings over the previous 2 months, with more than half using the money to cover necessary expenses such as groceries or housing payments, according to a May 2020 survey by a unit of the online lender LendingTree LLC. An additional 19 percent of savers planned to make a withdrawal, according to the survey. And the Federal Reserve’s just-released 2019 Survey of Consumer Finances, or SCF, finds that even before the pandemic, 18 percent of households with more than $2,500 in a retirement account had less than that in easily accessible liquid savings. More than 1 in 3 Black households and 22 percent of Latinx families found themselves in this precarious situation in 2019.

There are a number of interesting policy ideas for addressing this complex web of problems. The most sweeping proposals call for expanding Social Security.

Read the full article about policy solutions for retirement savings at Washington Center for Equitable Growth.