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Nayely Limon Rivera thought about saving for retirement, but as she entered her 30s, she hadn’t done anything about it — largely because none of the places she worked offered retirement savings plans.
“I considered it but never really quite looked into that,” she says.
New research from AARP shows, in unprecedented detail, how common this is. Nearly half of private-sector employees ages 18 to 64 — 57 million Americans – don’t have the option to save for retirement at work. This is particularly true for women, Hispanic Americans, Black workers, low earners and people who didn’t go to college. Those who work for small companies, or who change jobs often, are also much less likely to have retirement savings plans.
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“There’s a big disparity between different classes and races, and I happen to be from one of those, unfortunately,” says Hispanic worker Rivera, who handles payroll for a trucking company in Bakersfield, California.
“While Social Security is essential to retirement security, the average benefit is only about $1,600 a month,” said Debra Whitman, AARP’s executive vice president and chief public policy officer. “Providing workers with a convenient way to save for retirement helps ensure they will have additional resources beyond the foundation provided by Social Security.”
Availability of retirement savings plans varies widely
Small firms are much less likely to have employee retirement plans, according to AARP research released July 13. About 78 percent of those who work at firms with fewer than 10 employees and about 65 percent who work at companies with 10 to 24 employees lack a plan, according to the research.
Education is a factor too. More than three out of four workers (76 percent) who have less than a high school diploma do not have a workplace retirement plan, compared to 32 percent of those who finished college. And 46 million workers with annual earnings of $50,000 or less — 81 percent of the 57 million — do not have access to an employer-provided retirement plan.
Other divisions are also important. Men are more likely than women to have retirement savings programs at work. More than 80 percent of the highest earners have access to a plan, compared to slightly more than 20 percent of the lowest earners. About 64 percent of Hispanic workers, 53 percent of Black workers and 45 percent of Asian American workers lack access to an employer-provided retirement plan.