Have you ever wondered how millionaires are born? By pure luck? By grit, as many in the start-up world would say? Or simply by making smart decisions with your retirement plans, as I have heard from a wealth manager recently?

It is easy enough, they say. Just max out your 401(k) and take advantage of the matching contributions that your employer offers. Just like that. That’s how most Americans become millionaires. At least according to the wealth manager. According to the Capgemini World Wealth Report 2022, the number of millionaires in the US increased by 13.5% from 6.6 million in 2020 to 7.5 million in 2021.

It’s easy enough. Just do it.

The reality is, not everyone has access to a 401(k) plan. According to the latest report from the AARP Policy Institute, almost half of private sector employees aged 18 to 64 — 57 million Americans — do not have the option to save for retirement at work:

• About 78% of those who work in firms with fewer than 10 employees and about 65% who work in companies with 10 to 24 employees lack a plan.
• Almost three out of four workers with less than a high school degree do not have an employer-provided retirement plan, compared to those with a college (50%) or a bachelor’s degree or higher (32%).
• 46 million workers with annual earnings of $50,000 or less — 81% of the 57 million — do not have access to an employer-provided retirement plan. Arguably, these are also the workers that can benefit the most from having a consistent saving mechanism.

Unfortunately, access to a retirement plan also differs substantially by demographics. About 64% of Hispanic workers, 53% of Black workers, and 45% of Asian American workers lack access to an employer-provided retirement plan.

The challenge is further compounded by the changing nature of work.

According to the latest American Opportunity Survey (AOS) by McKinsey, “36% of employed respondents — equivalent to 58 million Americans when extrapolated from the representative sample — identify as independent workers”.

The group cuts across all ages, education levels, and incomes, including immigrants, younger workers, and those who are less economically established, as well as high earners. Many face barriers to their health and financial well-being, with only 32% of independent workers getting access to health insurance from their workplace or unions. Without a stable employer-provided salary, they are also more likely to face additional financial challenges including access to credit.

It reminds me of the saying: Economic inequality is a policy choice.

According to the World Economic Forum, the US ranked 27th (out of 146 countries) in terms of gender equality. Sadly, I am not surprised. In almost every state in the US, women represent the highest share of minimum-wage workers.

Consider these staggering statistics from Oxfam:

• Nearly a third of the American workforce is earning less than $15 an hour, with roughly 52 million workers and their families struggling to get by.
• 40% of women (31 million people) earn less than $15 an hour, including half of working women of colour, compared to 25% of men.
• Among working single parents, 57% (11.2 million people) earn less than $15.

From income to executive leadership positions and political representation, women are underrepresented. Despite making up more than 50% of the population, women constitute only around 27% of legislators and 25% of Fortune 500 board seats.

So, to my dear friends and colleagues, now that we have the stats (yet again), what are we going to do about it? How do we, as a society, advocate for more inclusive policies that can better support our changing demographics and our way of living? And how can we, as an industry, be more empathetic and create solutions that matter?

As it turns out, that too is a choice. And the choice is ours.

About the author

Theodora (Theo) Lau is the founder of Unconventional Ventures. She is the co-author of Beyond Good and co-host of One Vision, a podcast on fintech and innovation.

She is also a regular contributor for top industry events and publications, including Harvard Business Review and Nikkei Asian Review.