Older retirees may have few opportunities to pull themselves out of poverty once they have crossed that threshold. The elderly may not have many opportunities for employment, and could be limited by health issues.
The Urban Institute expects retirement income inequality to increase dramatically over time. The study found that among Depression-era babies, the median income in the top income quintile will be 7.5 times higher than in the bottom income quintile. For Generation Xers, the retirement income gap will increase to a factor of 10.4. "More income for boomers and Generation Xers is from retirement accounts and less from defined-benefit pensions, and a larger share of income will be from earnings," says Barbara Butrica, senior research associate at the Urban Institute and coauthor of the report. "If we look at their [retirement income] replacement rates, Generation Xers and boomers are projected to be significantly worse off on a relative basis."