Employers are Essential for Improving Retirement Savings
The U.S. Census Bureau recently released it’s The Wealth of Households: 2019 report. Digging into the stats underlying the report makes for a fascinating read for a data geek like me but I wanted to focus on what the report revealed about retirement savings.
Only 58.8% of households have a retirement account.
Let that sink in. Only a little over half of Americans own an account where they are saving specifically for retirement. Here are a few more data points:
- 32.7% – Households with IRA or Keogh accounts
- 47.1% – Households with a 401(k) or TSP account
- 21.9% – Households owning stocks or mutual funds outside of retirement accounts
Older Census data indicates an overlap between IRA and defined contribution account ownership with 69% of IRA account holders also owning a defined contribution plan account.
Looking deeper into the demographic breakdown shows that less than half of Black (44.9%) and Hispanic (42%) households own a retirement account of any kind.
Additionally, according the U.S. Bureau of Labor Statistics, only 61% of workers have access to a defined contribution plan.
These are pretty depressing statistics. There is some hope, though.
Other data shows that for those with access to a defined contribution plan, 76% were participating in the plan. Participation rates were even higher for workers making over $150,000 (94%) and for those making between $30,000-$49,999 (89%). When workers have access to a retirement plan the majority will utilize it. This is encouraging news!
One of our biggest opportunities then is helping employers offer retirement plans. This is especially true for small and medium business who are less likely to offer a retirement plan as an employee benefit.
Employers are an essential piece of the retirement puzzle for the average American. That’s why Beacon Wealth Consultants, thorough our Kingdom(k) and Kingdom(b) retirement plans, is doing everything we can to make it easy for employers of all sizes to offer a retirement plan and help their employees save for retirement.
If you’re a business owner, HR director, non-profit or church executive we can help! Give us a call today to find out how!