Watch video on retirement insecurity
“At a time when retirees are going to have to rely more heavily on their savings for retirement, fewer and fewer people have access to retirement savings plans through their workplace,” said Spencer Cowan, vice president of research at Woodstock Institute. “Lack of access to savings sets up an economically unstable future for workers, many of whom will have lower standards of living in retirement, and for society, which will likely be called upon to bolster the social safety net to avoid having millions of retirees living in poverty.”
The report, “Coming Up Short: The Scope of Retirement Insecurity Among Illinois Workers,” analyzed data from the Employee Benefits Research Institute, the Bureau of Labor Statistics, and the Census Bureau, and found:
• Over half of all private sector workers in Illinois lack access to an employment-based retirement savings plan. Only 2.2 million private sector workers in Illinois, or 46.6 percent, had access to an employment-based retirement plan in 2010, while 2.5 million, or 53.4 percent, do not have access to such a plan.
o Over half of all private sector workers in the Chicago region lack access to an employment-based retirement plan. In the Chicago region, 1.4 million private sector workers, or 46.4 percent, had access to an employment-based retirement plan in 2010, while 1.7 million, or 53.6 percent, did not have access to such a plan.
• Lower-wage workers are the least likely to have access to an employment-based retirement plan. Nearly 60 percent of workers in the lowest wage category did not have access to an employment-based retirement plan, compared with 49 percent of workers in the highest wage category.
• Access to employment-based retirement savings plans is not as likely in certain industries. Nearly three-fourths of workers in industries such as administration and support, education, the arts, and food services did not have access to an employment-based retirement plan in 2010.
• The majority of private sector workers in every Illinois legislative district does not have access to an employment-based retirement plan. Analysis of the data by legislative district shows that that fewer than half of private sector workers in every Illinois House and Senate district have access to an employment-based retirement plan in 2010.
Retirement savings comprise a significant portion of income in retirement, about one-fifth of retirement income on average. Other common sources of income in retirement include Social Security (67.5 percent of income), wage earnings (6.2 percent), and assets and investments (6.2 percent).
Assets are providing a declining percentage of retirement income for most households, who have seen a median decline in net worth of more than a quarter between 2005 to 2010. The biggest declines in net worth were seen among the lowest income households (48 percent decline), individuals aged 35 to 44 (54.5 percent decline), and households of color (54–57 percent decline). Social Security is replacing a smaller portion of pre-retirement income as the age limits for receiving full benefits rise and fewer workers are able to postpone retirement until reaching the age limit. These trends demonstrate that retirement savings will play an increasingly important role in retirees’ economic security going forward.
“There are simple, cost-effective measures Illinois can take to expand access to retirement savings plans,” said Lucy Mullany, coordinator of the Illinois Asset Building Group. “Creating a statewide infrastructure to provide savings opportunities to workers will help prevent hard-working people from falling into poverty later in life.”
For more information, please contact Spencer Cowan at 312-368-0310 or firstname.lastname@example.org and Lucy Mullany at (312) 870-4939 or email@example.com.