In a troubling bit of news for anyone who plans on stopping work someday: more than 40 percent of full-time private-sector employees in the United States say they lack access to either a pension or an employer-based retirement savings plan such as a 401(k), according to a new study by The Pew Charitable Trust.
According to the report, the data show that even within the same state, retirement plan access can vary widely:
“For example, in South Carolina, 50 percent of workers in Charleston reported having access to a retirement plan—18 points lower than the 68 percent in Columbia. This variation probably comes from the mix of industry and worker characteristics in each urban area.”
Some of the metropolitan areas with relatively high retirement plan access rates also face broad economic challenges, factors that are likely tied to the industries prominent there and their financial circumstances. For example, over 70 percent of workers in Scranton report having access to a workplace retirement plan, but the area also has higher unemployment and lower average wages than the United States as a whole.
Other key findings of the report include:
•• Retirement plan access varies more among the nation’s metropolitan areas than across states as a whole. The access rate among workers in the metropolitan areas ranges from 71 percent in Grand Rapids, Michigan, to 23 percent in McAllen, Texas. Nationwide, 58 percent have access to a plan.
•• Metropolitan areas with low access rates are heavily concentrated in certain large states. Nearly three-fourths of the metropolitan areas in the bottom 25 percent are in Florida, Texas or California.
•• Employer and worker characteristics appear to play a large part in the disparate levels of access. For example, metropolitan areas with relatively low rates of access generally have more people working for small employers.
Many areas with higher percentages of Hispanic or low-income workers also tend to have lower access rates.
Methodology: The figures come from a pooled version of the 2010-14 Minnesota Population Center’s Integrated Public Use Microdata Series Current Population Survey (CPS), Annual Social and Economic Supplement.
Unless otherwise noted, “worker” means a full-time, full-year, private sector wage and salary worker age 18 to 64. The term “metropolitan area” refers to a metropolitan statistical area, as defined by the federal Office of Management and Budget.