About 50% of Americans may be “marching toward retirement” without a plan, with at least one-third of older adults reaching their sixties with no pension coverage at all, a recent study suggests.
The Center for Retirement Research at Boston College found in an April 2014 report that only about half of private sector wage and salary workers age 25-64 participate in any retirement plan.
A National Compensation Survey included within the report shows that 78% of full-time workers in this age cohort have an employer that sponsors a retirement plan, however, this finding does not show the big picture.
When eliminating state and local employers, the coverage figure for full-time workers in the private sector drops to 74%. Additionally, that figure sinks even lower to 64% when including part-time workers.
A major concern, researchers found, had to do with participation in retirement plans versus access.
Only about 48% of private sector workers, including both full-time and part-time, were found to participate in a retirement plan.
While this is higher than the participation rate of 43% recorded by the U.S. Census Bureau for full-time and part-time workers in the private sector, researchers emphasize that pension coverage “remains a serious problem,” for many working Americans.
“The conclusion that emerges from this brief review is that individuals, on balance, underreport their converge and participation in retirement plans,” write study authors Alicia H. Munnell and Dina Bleckman. “In the end, it is probably reasonable to say that about 50% of private sector workers participate in a retirement plan.”
Written by Jason Oliva