A project of the Economic Opportunity Institute
Over the last two decades the type of retirement plan offered to workers has shifted from defined benefit pension, which ensured a worker’s retirement income, to defined contribution plans, such as 401(k)s, in which the worker bears the full risk of swings in the stock market and the economy. The effect has been an erosion of financial stability for many Americans. In 2009, the median accumulation in 401(k) accounts was only $17,794, while the average was $58,351.
That median accumulation rolled into an annuity with a guaranteed monthly payment for life would provide a woman with $114 per month in retirement income and a man (with a shorter expected life span) $124. The average accumulation would provide $374 a month for women and $405 for men.
While the average percentage of Washington firms that offer retirement savings plans to full-time workers is 45%, that rate is higher for larger firms and much lower for smaller ones. More than 85% of firms with 500 employees or more offer retirement plans and other benefits. Only 30% of businesses with 2 to 9 employees do.
The result is that less than half of private sector workers in Washington have a workplace-based retirement plan.
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from the Economic Opportunity Institute. Liquid layout thanks to Matthew James Taylor.