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 55-641.
- Among households age 55 and older, nearly one-third have no retirement savings or pension assets2.
- The median retirement assets for all working households ages 25-64 is just $3,0003.
Access to Workplace Retirement Savings Plans
- 7.5 million private-sector workers in California (about 57%) lack access to a workplace retirement plan (includes both full- and part-time workers)4.
- Access to workplace retirement plans makes individuals with incomes between $30k and $50k fifteen times more likely to save for retirement5.
Benefits of CalSavers
- Almost 40% of CalSavers participants could delay claiming Social Security by a year or more, increasing their monthly benefit7.
- Young workers earning the bottom 50% of wages in their age cohort could increase their retirement incomes by roughly half as a result of the state’s new minimum wage law and participation in CalSavers8.
Retirement Insecurity by Race & Ethnicity
- In California, 68% (3.5 million) of Latino workers, 50.5% (936,882) of Asian workers and over half of African American workers ages 18-64 lack access to a workplace retirement plan9.
- The median retirement account balance of all working Latinos age 21-64 is $010.
- About 75% of Black households ages 25-64 have less than $10,000 in retirement savings11.
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 plans12.
- Women are 80% more likely than men to live in poverty in retirement13.
Young People and Retirement
- Two-thirds (66.2%) of working Millennials have nothing saved for retirement14.
- Over half of workers age 25-44 have projected retirement incomes below 200% of the federal poverty level (a commonly used threshold for serious economic hardship)15.
- Almost 65% (3.5 million) of California workers between the ages of 18-34 are not covered by a workplace retirement plan16.
- 1Allegretto, S.A., Rhee, N., et. al., (2011),California Workers' Retirement Prospects in N. Rhee’s Meeting California's Retirement Security Challenge, U.C. Berkeley Center for Labor Research and Education
- 2U.S. Government Accountability Office, (September 2015), Federal action could help state efforts to expand private sector coverage
- 3U.S. Government Accountability Office, (May 2016), Low defined contribution savings may pose challenges
- 4John, D. and Koenig, G., (2015), Workplace Retirement Plans Will Help Workers Build Economic Security, AARP Public Policy Institute
- 5Employee Benefit Research Institute, Unpublished estimates of the 2004 Survey of Income and Program Participation Wave 7 Topical Module (2006 data)
- 7The Pew Charitable Trusts, (March 2018), Auto-IRAs could help retirees boost Social Security Payments
- 8Rhee, N., (December 2017), “California's $15 minimum wage and Secure Choice Retirement Savings Program can boost young low-income workers' retirement income by 50%, UC Berkeley Labor Center
- 9Supra note 4
- 10Brown, J. & Oakley, D., (November 2018), Latinos' Retirement Insecurity in the United States, National Institute on Retirement Security (NIRS) & UnidosUS
- 11Rhee, N., (December 2018), Race and Retirement Insecurity in the United States, NIRS
- 12Supra note 4
- 13Brown, J., Rhee, N., Saad-Lessler, J., Oakley, D., (March 2016), Shortchanged in Retirement, NIRS
- 14Brown, J. (February 2018), Millenials and Retirement: Already Falling Short, NIRS
- 15Supra note 1
- 16Supra note 4