A study conducted by American senior advocacy organization AARP has revealed that nearly 57 million people — 48% of American private sector employees between the ages 18 to 64 — work for an employer that does not offer either a traditional pension or a retirement savings plan, as many financial analysts and professionals warn of an impending “retirement crisis.”
The study, released this month by the organization, is part of a hypothesis describing retirement plans as pivotal factors in building economic security.
“Having access to a retirement plan at work is critical for building financial security later in life,” said Debra Whitman, AARP EVP and Chief Public Policy Officer. “And we know people are much more likely to save for retirement if they can do so automatically through their paycheck. We applaud the many states — with AARP’s support — that have already created programs that give workers access to retirement savings options and provide small businesses an effective way to attract and retain employees.”
Smaller businesses were less likely to offer retirement plans than their larger counterparts, the research found. However, mid-sized businesses were also not guaranteed to have such plans, either.
“About 78% of workers at companies with fewer than 10 employees and 65% who work in companies with 10 to 24 employees lack access to a plan,” AARP said based on the study. “Even among employers with more than 1,000 workers, one-third of employees do not have access to an employer-sponsored retirement plan.”
There was also significant variation in the retirement plan status of workers based on their highest completed level of education, the study says.
“Just over three-quarters of workers with less than a high school degree (76%) do not have an employer-provided retirement plan — compared to half (50%) of workers with some college and nearly one-third (32%) with a bachelor’s degree or higher,” the research indicated.
Variations also exist along lines of race and ethnicity, with nearly 64% of Hispanic workers, 53% of Black workers, and 45% of Asian American workers lacking access to an employer-provided retirement plan. These cohorts make up a total of about 46% of the total 57 million workers not covered by such plans.
Read the study at AARP.
