The stats aren’t new, but always stark.
More than a third of all private sector workers do not have access to a workplace 401k or similar retirement plan, and 31 percent of workers with access to an employer-sponsored plan do not participate.
“Some may decide they are unable to afford regular contributions,” according to a new issue brief from The Pew Charitable Trusts, while others may be ineligible due to hours worked or vesting schedules.
But are these “non-participants” preparing for retirement in other ways? Are they prioritizing retirement savings outside of the workplace?
They’re questions Pew seeks to answer, as the answers “are important as government policymakers consider steps to boost access to retirement plans.”
Data analyzed by the organization “shows a correlation between access to and participation in workplace-based retirement savings programs and more planning and saving.”
Among Pew’s key findings:
Few workers have recently tried to calculate needed retirement income—Not surprisingly, “Those who are participating or have ever participated in an employer-sponsored plan are more likely than those who have never participated—regardless of current access—to have done any planning.”
Plan participants have access to better planning information, resources—Most get it from online tools and calculators, while few get it from automated statements or benefits experts through their human resources department.
“Guesstimating—informal or “back of the envelope” calculations—is common, but more so for workers without access to a workplace plan (43 percent) than those with access (31 percent).”
Workers without plan access could still have other retirement savings, such as IRAs or a plan from a previous employer—However, only a little over a quarter of those without access to a plan said they have any retirement savings.
Interestingly, Pew asks workers about a hypothetical $10,000 windfall to reveal savings and spending priorities. The organization finds that, on average, “those without access to a retirement plan would allocate $1,580 toward retirement, more than those with access to a plan who are not currently participating, possibly because they cannot save at work.
“Workers are more likely to use the hypothetical money to pay down debt or build liquid savings than to boost retirement savings, which suggests that these factors may be more pressing concerns for many workers.”