While most people assume younger employees, employees at smaller companies and employees in blue-collar professions can’t afford to save and are not contributing to their 401k, new data shows it’s not true, according to 401k provider Human Interest.
“We see that 65%-90% of employees who are offered a 401k consistently save, across regions, professions, and generations,” Jeff Schneble, CEO of the San Francisco-based company, said in a statement. “It’s true that white-collar professions like finance, healthcare, and tech have the highest participation rates, and this is probably what people would expect.”
However, half of its customers are in blue-collar industries like retail, manufacturing, and construction—and “we still see the majority of employees in these companies contributing to a 401k when given the opportunity.”
More specifically, the data shows:
While squeezed, the Sandwich Generation saves
When examined by age, regardless of generation, almost 3/4 of everyone aged 25-49 is contributing to their 401k.
The “oft-maligned millennials” are modeling strong savings, with people aged 30-39 participating at the highest rate (72%).
Despite higher limits, Gen X savers fall slightly behind, averaging between 65% and 70% participation.
The youngest and oldest are on board
Nearly half of those just entering the job market contribute to a 401k and those already in retirement age (65 and up) do so at a similar rate.
It’s Not just a coastal phenomenon
While the East Coast has the highest participation rate (78%), the majority of employees living in the Midwest and Southern regions of the U.S. are also contributing to a 401k when given the opportunity (70% and 65%, respectively).
It’s not all finance and tech dollars
On average, 86% of people working in finance participate in an offered 401k plan, with 100% participation among the accountants in the sample.
A similar percentage of tech workers (85%)—from startups to software providers and telecommunications—will invest in a 401k when the opportunity presents.
Yet on average, 76% of healthcare providers or healthcare service employees participate in an offered 401k plan, with those working on peace of mind participating at the highest rate (therapists/psychologists at 86%).
Also, on average, 66% of blue-collar workers—from automotive to manufacturing—participate in an offered 401k plan.
Lastly, don’t shortchange the service sector. On average, 52% of people working in foodservice and hospitality will save in an offered 401k plan.
“People are flooded with advice on saving for retirement, but the real barrier to entry is whether or not your employer offers a 401k. Small and medium-sized businesses employ almost half the nation’s employees, yet 86% of those people do not have access to this fundamental wealth-building benefit, and therefore don’t save,” Schneble concluded.