Trends in Retirement Planning

The Employee Benefit Research Institute just released a report on employee-sponsored retirement plans and employee participation for 2009.  One would expect that during a recession fewer people would participate in their employer-sponsored retirement plans but I found some of the findings downright scary.  HERE is a link to to download the full report.  Here are some highlights:

  • Among full-time, full-year wage and salary workers ages 21–64 (those with the strongest connection to the work force), 61.8 percent worked for an employer or union that sponsors a plan. This is down almost a percentage point from 2008 and almost 8 percentage points lower than the sponsorship high point of 69.4 percent measured in 1999.
  • Among full-time, full-year wage and salary workers ages 21–64, 54.4 percent participated in a retirement plan in 2009….down almost 6 percentage points from the high of 60.4 percent measured in 1999.

For most households employee-sponsored retirement plans play a significant role in providing post-retirement income since social security benefits will only replace a small portion of  pre-retirement income.  Lower participation can only result in fewer people being able to retire or more people relying on public assistance once they hit retirement age.

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