The cheese is great but the retirement plans are better. Wisconsin kills it in workers’ access to employer-based 401(k)s, but southern states like Florida? Not so much.
A new report from the Pew Charitable Trusts takes a close look at retirement in each state. As you might expect, it finds wide differences in access to and participation in employer-based retirement plans, with variations by employer size and industry type as well as by workers’ income, age, education, race and ethnicity.
The report, Who’s In, Who’s Out: A Look at Access to Employer-Based Retirement Plans and Participation in the States, examines the rates of access to and participation in plans in all 50 states and assesses the challenges facing workers and employers in ensuring that Americans have sufficient resources to pay for their retirements.
For example, the report found that 61 percent of workers in Wisconsin participate in an employer-based pension or retirement savings plan, compared with 38 percent in Florida.
Access and participation is higher in the Midwest, New England, and parts of the Pacific Northwest—and lower in the South and West.
The report also finds that among Hispanic workers, access to a plan is around 25 percentage points below that for white non-Hispanic workers. Black and Asian workers also report lower rates of access than white workers.
Overall, Pew’s analysis found that 58 percent of private sector workers have access to a plan, while 49 percent participate in one. Pew also found that more than 30 million full-time, full-year, private sector workers ages 18 to 64 lack access to an employer-based retirement plan, whether a traditional pension or a defined contribution plan such as a 401(k).
The report notes the numerous efforts at the state and federal levels to increase retirement savings. Illinois, for instance, adopted the Secure Choice Savings Program in 2015, which will start enrolling certain private sector workers in new payroll-deduction retirement accounts by 2017. In another example, the state of Washington created a marketplace in which small employers and the self-employed can shop for retirement plans. In addition, the federal government has rolled out the “myRA,” a new national savings program that is geared toward low-income savers.
“Workplace retirement savings plans can be a critical piece of the retirement security puzzle,” said John Scott, director of Pew’s retirement savings project. “But for millions of Americans, this piece is missing.”
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
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