While saving enough money for retirement used to be an afterthought for many American workers, a recent study has shown that today’s retirees are facing an uphill climb to live a comfortable life after their careers have finished.
According to Employee Benefit News, a new report from the Pew Charitable Trusts, titled “Who’s In, Who’s Out,” has found that a large percentage of U.S. workers do not have the opportunity to participate in a retirement plan at work.
As of 2016, only 58% of full-time American workers have access to a workplace retirement savings plan. Furthermore, only 49% of full-time workers reported participating in programs offered through their workplace.
These percentages are drastically lower among part-time workers, who typically do not receive the same type of long-term financial protection as their full-time counterparts. In fact, only 39% of part-time employees had access to retirement benefits in 2015.
“With the aging of the nation’s population, a continuing decline in the availability of traditional pensions, and concerns about the future of Social Security, many workers in the United States worry that they won’t have enough money set aside for their retirements,” the report states.
Most experts believe that developing a feasible plan for retirement savings is the first step in building towards the future, but a general lack of access to these programs within American workplaces has left many workers without a place to turn.
“Workplace retirement savings plans can be a critical piece of the retirement security puzzle,” said John Scott, director of Pew’s retirement savings project. “But for millions of Americans, this piece is missing.”
The current state of retirement benefits varies significantly between states. In Wisconsin, about 70% of workers have access to retirement savings plans. In Florida, which is widely regarded as the worst state for retirement benefits, only 46% of workers have access to these tools.
According to U.S. News and World Report, several states are nipping at Florida’s heels for the dubious distinction of being the worst state for retirement benefits.
Just under half (49%) of workers in New Mexico are eligible for retirement benefits at work, followed by Texas (50%), Nevada (51%), and Arizona (52%).
Proponents of easier access to retirement benefits argue that employers should embrace these plans and use them to recruit better talent. Employees will typically respond to such programs if they are explained in a logical way.
“We have always been beating the drum that you need to start saving early and always save some. You have to come up with a better communication strategy and involve people in the discussion,” said Matt Sicking, a senior consultant at Willis Towers Watson.
The report also noted disparities in retirement plan offerings among different races, ethnic backgrounds, industries, employer size, and age.
Retirement benefits are generally determined on a state-by-state level, so it remains to be seen how individual states will encourage more employees to participate in savings plans.
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