Fewer than half of American workers qualify for a retirement plan through their job. But that lack of access is markedly worse in some states, which researchers warn could face a spike in senior poverty as a result, according to new study.
About 69 million workers, or 56% of the nation’s workforce, lack access to a retirement plan through their workplace, the Economic Innovation Group found in its analysis of 2021 Census data. The share is highest in Florida, where almost 7 in 10 workers are unable to put money away in an employer-sponsored plan, and lowest in Iowa, where it is about 4 in 10.
Americans’ retirement readiness is cleaved by income and profession, with higher-income households far more likely to have socked away funds for their later years than low-wage workers. But there’s also a geographic divide, with workers in the South less likely than those in the Midwest to have access to employer-sponsored plans, the analysis found.
“It definitely limits the ability of those workers to really take advantage of probably the more prominent vehicle” for retirement savings in the U.S., Benjamin Glasner, associate economist at EIG, told CBS MoneyWatch.
He added, “If you don’t have access to it, you can’t even begin to start taking advantage of the tax benefits of those plans. And that’s a pretty big hurdle to try to overcome solely on your own.”
Midwestern workers are the most likely to have access to employer-based retirement plans, at 49%, while those in the South are the least likely, with only 42% able to tap a 401(k) or the like, the research found.
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