California Secure Choice Retirement Savings Investment Board
Fast Facts on Retirement Insecurity
Are People Ready for Retirement?
- Each generation is projected to retire poorer than the last: 55% of young workers age 25-44 have projected retirement incomes below 200% of the federal poverty level (a commonly used threshold for economic hardship), compared to 39% of workers age 45-54 and 33% of workers age 55-64.
- To produce the income needed to maintain their standard of living in retirement, Americans need to save about 15% of earnings.
- More than half of today’s households will not have enough retirement income to maintain their pre-retirement standard of living.
- Among households age 55 and older, about 29 percent have no retirement savings.
Access to Workplace Retirement Savings Plans
- Access to workplace retirement plans makes individuals 15 times more likely to save for retirement among individuals with incomes between $30k and $50k.
- 7.5 million California workers (about 57%) of private-sector workers in California work for an employer that does not offer a retirement plan. Of those, over 2/3 (almost 5 million) are people of color, of which nearly 3/4 (over 3.5 million) are Latino.
- 77% of California workers (over 4.5 million) employed by businesses with fewer than 100 employees do not have access to a workplace retirement plan. In comparison, 41% of workers (over 2.9 million) employed by businesses with more than 100 employees have access to a workplace retirement plan.
- Only 22% of workers who earn less than $25,000 have access to a workplace retirement plan compared to 75% of workers who earn $100,000 or more.
People of Color and Retirement
- Almost half (47%) of workers in California likely to be eligible for Secure Choice are Latino.
- People of color will make up a majority (55%) of California’s senior population by 2035, compared to 41% today. The Latino seniors population will grow from 21% in 2015 to 44% in 2035. The Asian senior population will grow from 15% to 17% of the state total. The share of white seniors will shrink from 59% to 45%. The share of Black seniors will drop, from 6% to 5%.
- Latino seniors, the fastest growing segment of the senior population, are almost three times as likely to be poor – with incomes below 200% federal poverty level (FPL) – as white seniors (44% vs. 23%). Asian and Black seniors are also significantly more likely to live in poverty than white seniors (32% and 37% vs. 23%).
- In California, 68% (3.5 million) of Latino workers, 50.5% (936,882) of Asian workers and 297,497 African American workers ages 18-64 work for private sector employers who do not offer a retirement plan.
Women and Retirement
- 58% (3.4 million) of female workers in California between the ages of 18-64 are not covered by workplace retirement savings plans.
- Women are 80% more likely than men to live in poverty in retirement. 32% of senior women in California have incomes below 200% federal poverty level, compared to 26% of senior men. The average female senior has half as much income as the average male senior ($15,500 vs. $31,000).
Young People and Retirement
- 58% of young workers age 25-44 have projected retirement incomes below 200% of the federal poverty level (a commonly used threshold for economic hardship).
- Almost 65% (3.5 million) of California workers between the ages of 18-34 are not covered by a workplace retirement plan.
- Younger workers tend to change jobs more frequently than older workers, as the median tenure of workers ages 25 to 34 is about three years, while median tenure of workers ages 55 to 64 is a little more than 10.4 years.
- The average monthly Social Security retirement benefit is $1,328 as of January 2015.
- At least 22% of retirees rely on Social Security for 90% of their income.
- At least 62% of retirees rely on it for more than half of their income.
- Nari Rhee, “6.3 Million Private Sector Workers in California Lack Access to a Retirement Plan on the Job” (June 2012)
- Boston College Center for Retirement Research, “How much should people save?” (July 2014)
- Alicia H. Munnell, et. al., “NRRI update shows half still falling short” (December 2014)
- Employee Benefit Research Institute (EBRI), “2014 RCS Fact Sheet #6 Preparing For Retirement In America”
- David John and Gary Koenig, “Workplace retirement plans will help workers build economic security” (August 2015) AARP Public Policy Institute
- National Institute on Retirement Security, "Shortchanged in Retirement, The Continuing Challenge to Women’s Financial Future", March 2016.
- Nina Ebner and Nari Rehee, “Aging California’s Retirement Crisis: State and Local Indicators”
- U.S. Bureau of Labor Statistics, “Employee Tenure In 2014” (2014)
- United States Government Accountability Office (GAO), “Most households approaching retirement have low savings” (May 2015); Retirement Security, (May 2016)
- The Pew Charitable Trusts, “A Look at Access to Employer-Based Retirement Plans in the Nation’s Metropolitan Areas”. (May 2016)