While more than half (55 per cent) of U.S. generation X employees participate in an employer-sponsored retirement savings plan, nearly two-thirds of men (62 per cent) and women (64 per cent) participating in these plans say they’ve saved less than 10 per cent of their retirement savings target, according to a new report by the National Institute on Retirement Security.
The report, which analyzed U.S. Census Bureau data on income and retirement planning among gen X workers, found 75 per cent of Black employees and 80 per cent of Hispanic workers said they’ve accumulated less than 10 per cent of their savings target.
Among employees with individual retirement or Keogh accounts, the average balance was $148,920 and the median balance was $44,100. Among workers with a 401(k), 403(b) or other employer-sponsored defined contribution pension plans, the average balance was $173,553 and the median balance was $50,000.
The average household reported only $40,000 in private retirement savings accounts and 28 per cent reported a zero balance in these accounts.
Only 14 per cent of workers reported participating in a defined benefit pension plan, a percentage that increases among white employees (17 per cent) and decreases among Hispanic workers (10 per cent). Only a third (35 per cent) of Hispanic workers said they participate in any type of employer-sponsored retirement savings plan.
The report also recommended several measures for supporting gen X workers’ retirement security, including shoring up social security, increasing retirement plan access for part-time workers, reforming the federal saver’s credit and the ongoing establishment of state-facilitated retirement savings programs.