A staggering 47 percent of American workers don’t participate in a work-based retirement plan.
According to CBS MoneyWatch, those who don’t are typically small-business employees and part-time and low-income workers.
Part of the problem is that a retirement plan isn’t made available where they work. Bureau of Labor Statistics data show that 74 percent of full-time workers have access to a retirement plan at work, compared with 37 percent of part-time employees. It’s a similar story for large businesses (82 percent) versus small businesses (50 percent).
Another problem is that workers who have access to a work-based plan don’t participate.
“The low participation levels among the vulnerable groups are due to low access to retirement plans combined with reduced take-up rates, often because many members of these groups cannot afford to contribute to a retirement plan,” CBS MoneyWatch said.
Not surprisingly, those who do participate in a retirement plan are more than twice as likely to say they feel secure about their retirement, compared with those who don’t participate, MoneyWatch says. That’s according to a retirement confidence survey by the Employee Benefit Research Institute.
Sadly, the survey also revealed that “two-thirds of workers ages 45 to 54 report having less than $50,000 in retirement savings, while half of all workers 55 and over report having less than this amount in savings,” MoneyWatch said.
If you think that Social Security will get you through your retirement years, you’re looking at hardship, MoneyWatch says. That’s the point Money Talks News founder Stacy Johnson made in this video.
If your workplace offers a 401(k) or other retirement plan, contribute at least enough to generate the employer match. If not, open an IRA.
Do you participate in a work-sponsored retirement plan? Why not? Share your comments below or on our Facebook page.