Many Americans Lack Access to Retirement Benefits Plans
A new study has revealed that many Americans lack access to a retirement benefits plan. The study also showed that Americans prefer retirement plans offered by their employer when compared to the 401(k) like plans. The study also found out how living in a state or working in a particular sector impacts the access to retirement plans. Recommendations to correct the situation were also given to the policymakers.
Americans Don’t Have Access to Retirement Benefits Plans
Over 40% of Americans have admitted that they don’t have access to an employer-based retirement savings plan or a pension in the study conducted by the Pew Charitable Trust. The study analyzed Census Bureau data and found that about 49% of Americans take part in the 401(k) through the workplace or a pension plan. It also found that 58% Americans have access to a plan through their employer.
The Location Impacts Retirement Plans
The study also revealed that access to retirement plans varied more in the metropolitan areas than across the states. The report found that the access rate for employees living in McAllen, Texas was just 23% while it was 71% in Grand Rapids, Michigan. The study also exposed the fact that metropolitan area with the lowest rate of retirement plans access are heavily concentrated in the states as the bottom 25% belong to Texas, Florida, and California.
Other Factors Impacting Retirement Plans
The report of the study also stated that factors like workers’ race, ethnicity, employer size, employee earnings and sector are among the key factors that can decide on the availability of retirement plans. This was proven by adding in relevant data that states about 69% of workers in the manufacturing sector have access to a retirement plan while just 34% of workers in the leisure and hospitality industry have that access.
Challenges of the Policymakers
The Pew Charitable Trust stated that the study clearly points out the fact that the state, city and federal level policymakers need to deal with complex challenges such as increasing the availability of workplace retirement benefits plans. The policymakers need to ensure that the retirement plans are customized as per the local needs.
The policymakers also need to create effective policies by understanding the existing gaps in retirement benefits savings. The study concluded by adding that the policymakers need to understand the nature of taxpayers, workers, and businessmen working in the metropolitan areas.
