WASHINGTON–While most Americans plan to rely at least in part on personal savings to fund retirement, many households face “substantial challengers in building their retirement nest eggs,” according to new research released by Pew Research.
U.S. workers accumulate most of their retirement savings through their jobs, but more than one-third of full-time employees lack access to a workplace retirement plan, according to Pew.
“Even for workers who have access to a plan, obstacles—such as their debt, other savings priorities like children’s college funds or a house down payment, immediate financial needs, or a lack of confidence in their ability to choose investments wisely—can discourage participation,” Pew said. “And among those who participate, savings are generally modest.”
A chartbook released by Pew that examines data from the U.S. Census Survey of Income and Program Participation—which defines “workers” as 18- to 64-year-old private sector full-time and part-time employees who were not self-employed, agricultural workers, or in the armed forces at the time of the survey–found:
- Over one-third of all workers do not have access to either a defined benefit or defined contribution plan sponsored by their employers.
- Access varies by employment status. Two-thirds of full-time workers have access to a plan compared with only 44% of part-time workers.
- Workers in certain industries, Millennials, and Hispanics are particularly disadvantaged in terms of access to employer-sponsored retirement savings plans.
- Workers cited eligibility and affordability as key reasons for not participating in available employer-sponsored defined contribution plans: Approximately two-thirds of part-time workers cited eligibility, and almost half of full-time workers mentioned affordability.
- Employer contributions encourage participation. Approximately 73% of workers participate when their employer contributes, compared with only 55% when the employer does not.
- Approximately one-in-five workers who participate in an employer-sponsored defined contribution plan has taken a loan from the plan’s balance.
- The median amount in a retirement savings account is only $22,000, just $6,000 more than the median annual Social Security retirement benefit ($16,146).
For the full report, go here.