Are U.S. Workers Ready for Retirement? Trends in Plan Sponsorship, Participation, and Preparedness
Authors: Teresa Ghilarducci, Joelle Saad-Lessler and Kate Bahn
Date: March 2015
Employer-sponsored retirement plans provide the best vehicle for retirement savings because they provide a practical and efficient way for workers to save consistently. However, this report finds that almost half of Americans who were working in 2011 were not offered a retirement account at work. In addition, 68% of the U.S. working age population (25-64) did not participate in an employer-sponsored retirement plan because their employer did not offer one, they elected not to participate or were not working. This report also finds the amounts saved through employer-sponsored defined contribution (DC) retirement plans are only slightly better off than those without a retirement plan. Except for those workers with defined benefit (DB) plans, most middle class U.S. workers will not have adequate retirement income. The poverty projections highlighted in this report reveal that 33% of future retirees will be either poor or near-poor when they retire. Additionally, 55% of retirees will be forced to rely solely on their Social Security income. A previous version of this report was published in the Journal of Pension Benefits.