If income inequality continues to grow, so too will the gap between wealthy and struggling retirees.
That's the takeaway from a new report by the Urban Institute, a progressive think tank in Washington, D.C., and funded by the Department of Labor, which analyzed how rising inequality will shape the landscape of American retirement.
"People have this perception that with Social Security, retirement income is more protected from earnings inequality, when in fact that's not the case," said Damir Cosic, a research associate in the Income and Benefits Policy Center at the Urban Institute.
Social Security benefits, along with defined contribution plans and other retirement savings options, generally are tied to previous earnings, which are increasingly a story of imbalance.
People who fall near the bottom of income distribution, after factoring in inflation, have actually seen their wages decline over the past few decades, according to the institute. Meanwhile, the share of earnings going to the top 0.1 percent swelled by more than 400 percent between 1971 and 2001.