PR Newswire December 19, 2019
Today's
workers have saved $50,000 (estimated median) in all household retirement
accounts, but savings vary dramatically across demographic segments, according
to A Compendium of Findings About U.S.
Workers, a new report released today by nonprofit Transamerica Center for Retirement
Studies® (TCRS).
Workers
with an annual household income (HHI) of $100,000 or more have saved $222,000
(estimated median) in all household retirement accounts, compared with $47,000
among those earning $50,000 to $99,999. Among those earning less than $50,000,
total retirement savings is significantly less— just $3,000. College graduates
have saved $160,000, compared with $23,000 among non-graduates. Men have saved
$76,000, compared with $23,000 among women.
As part
of its 19th Annual
Retirement Survey of Workers, one of the largest and
longest-running surveys of its kind, TCRS surveyed more than 5,100 workers of
for-profit companies. The Compendium offers more than 30 key indicators of
retirement readiness among workers by employment status (full-time, part-time),
generation, gender, household income, level of education, and ethnicity.
Five
Ways to Improve Retirement Security
"Many
U.S. workers are continually at risk for not achieving a financially secure
retirement. Policymakers are taking action to strengthen our retirement system,
by expanding access to employer-sponsored workplace savings plans and making it
easier for workers to plan and save," said Catherine Collinson, CEO
and president of Transamerica Institute and TCRS. "It is also imperative
that policymakers begin devoting attention to addressing Social Security's
projected funding shortfall."
The
survey findings yield opportunities for improving retirement security, many of
which are further supported by TCRS' most recent survey of employers.
Five specific opportunities include:
·
Expand access to workplace retirement
plans. Only 65 percent of workers are offered a 401(k) or similar plan,
including 71 percent of full-time workers and just 45 percent of part-time
workers. Expanding coverage among both full-time and part-time workers can
increase retirement savings rates and provide access to tax-advantaged savings,
institutional investments, and the tools and resources that are included with
employer-sponsored retirement plans.
·
Encourage wider adoption of automatic
enrollment by retirement plan sponsors to increase participation rates among
workers. Among those currently offered a 401(k) or similar plan by
their employer, plan participation rates are lowest among part-time workers (58
percent) and workers with HHI of less than $50,000 (59 percent). Automatic
enrollment is a plan feature that can increase participation by eliminating the
decision-making and action steps usually necessary for employees to enroll in
and start contributing to the plan. Employees are automatically enrolled into
the plan with the ability to opt out and stop contributing.
·
Discourage "leakage" from retirement
accounts in the form of loans and withdrawals, which can severely inhibit the
growth of an individual's long-term savings. Almost
one in three workers (29 percent) have taken a loan and/or early withdrawal
from retirement accounts. Generation X (32 percent), full-time workers (31
percent), and workers with HHI of $50,000 to $99,999 (31 percent) are slightly
more likely to have done so.
·
Raise awareness of the IRS Saver's Credit, a
tax credit that is available for low- and moderate-income workers who save for
retirement in a 401(k) or similar plan or IRA. Paradoxically,
awareness of the Saver's Credit is lowest among those more likely to meet its
income eligibility limits. Only 29 percent of workers with HHI of less than
$50,000 and 29 percent of women workers are aware of the credit.
·
Implement reforms to Social Security to ensure
that it is sustainable for future generations. More
than one in four workers (28 percent) expect to rely on Social Security as
their primary source of income in retirement, including Baby Boomers (42
percent), those with HHI of less than $50,000 (40 percent), non-college
graduates (35 percent), and women (32 percent).
·
"By addressing demographic disparities, policymakers in
collaboration with employers, industry, nonprofits, and academics can help
bridge inequalities and improve retirement security among all," said
Collinson. "Collective actions taken today can lead to better outcomes
tomorrow."
A Compendium of Findings About U.S.
Workers and other retirement research and educational tools can be
found at www.transamericacenter.org.
Follow TCRS on Twitter @TCRStudies.
About Transamerica Center for Retirement Studies
Transamerica Center for Retirement
Studies® (TCRS) is a division of Transamerica Institute®,
a nonprofit, private foundation. Transamerica Institute is funded by
contributions from Transamerica Life Insurance Company and its affiliates and
may receive funds from unaffiliated third parties. TCRS and its representatives
cannot give ERISA, tax, investment, or legal advice. This material is provided
for informational purposes only and should not be construed as ERISA, tax,
investment, or legal advice. For more information, visit www.transamericacenter.org and
follow TCRS on Twitter at @TCRStudies.
About
the 19th Annual Transamerica Retirement Survey of Workers
The
25-minute online survey was conducted within the U.S. by The Harris Poll on
behalf of TCRS between October 26 and December 11, 2018, among a nationally
representative sample of 5,923 full- and part-time workers, including
self-employed. This report is based on 5,168 full- and part-time workers who
are not self-employed and who work in a for-profit company with one (1) or more
employees. Results were weighted where necessary to bring them into line with
the population of U.S. residents age 18+, employed full- or part-time in a
for-profit company with one (1) or more employees, and to adjust for
attitudinal and behavioral differences between those who are online versus
those who are not, those who join online panels versus those who do not, and
those who respond to surveys versus those who do not. No estimates of
theoretical sampling error can be calculated.
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