The study attributed this situation to inadequate retirement savings. Using the example of a couple making $29,500 a year in retirement, it found that most of this amount, $23,000, will come from Social Security; defined contribution plans would provide about $4,000, and defined benefit plans would provide about $1,500, "reflecting low levels of coverage and small account balances." It said that only 17 percent of these couples own nonretirement financial assets such as money market accounts, municipal or corporate bonds, stock, or annuities. Yet even those assets, if averaged across all households, would yield only about $1,000 a year. 

Working longer will improve older Americans' circumstances but not prevent downward mobility entirely. Retiring at 65 instead of 62, the report said, would increase couples' annual retirement income by $8,500, of which $6,000 would come from Social Security. While certainly an improvement, this still means middle class workers will be downwardly mobile in retirement. 

With these scenarios in mind, the report recommended strengthening Social Security, as it is the strongest source of income for retirees. But it also noted that people will need a strong second tier source of income, such as a 401(k) or IRA plan. Such plans are currently inadequate: The average 401(k) or IRS balance is about $92,000 "which will provide a lifetime income of a mere $300 a month."