Half of Americans Don’t Have a 401(k) or Pension

78 million Americans work for employers that do not sponsor a retirement plan

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Fewer than half of U.S. workers participate in any kind of employment-based retirement plan. Just 40.4 percent of employees utilized a 401(k) or pension in 2008, down from 41.5 percent in 2007, according to a recent study by the Employee Benefit Research Institute. That translates to about 63.7 million workers who saved for retirement through a workplace program last year, considerably below the 67.1 million employees who participated in 2000.

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Part of the problem is that only 50.6 percent of Americans work for an employer that sponsors a retirement savings plan. But even among full-time workers between the ages of 21 and 64, the group most likely to be offered a retirement plan at work, just 54.8 percent utilized the retirement account or pension plan, down from 55.3 percent in 2007. Significantly more public-sector employees (75 percent) participated in a retirement plan than private-sector workers (41 percent). And employees on the verge of retirement between the ages of 55 and 64 participated in higher numbers (55 percent) than young workers age 21 to 24 (19 percent). Among large employers with 1,000 or more workers, 56 percent were saving for retirement through a workplace plan, compared to 16 percent at companies with 10 or fewer employees.

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That leaves 78 million Americans who work for an employer or union that did not sponsor a retirement plan and 94.1 million workers who did not participate in a plan, the study found. Craig Copeland, a senior research associate for EBRI and author of the study, says additional decreases in retirement plan participation are possible in 2010. The continued freezing of traditional pensions and shift to self-directed 401(k) retirement plans may continue to diminish the use of retirement savings plans, he writes. But the growing incidence of companies automatically enrolling workers in 401(k) plans unless they opt out could contribute to retirement account participation remaining near the level it is now.