[ Research ]
The Changing Landscape of Retirement
As of 2024, the average retirement age has seen a noticeable increase compared to past decades. Men now typically retire at 65, and women at 63. This shift from the 1995 averages of 62 for men and 60 for women illustrates a broader trend: people are working longer due to economic necessity and changes in pension landscapes. Additionally, Social Security benefits, which have seen significant growth from an average of $617 for men and $487 for women in 1989 to $1,907 in 2024, are still not keeping pace with the increased cost of living, making these benefits less reliable as a sole source of retirement income.
Data Insight: The rise in Social Security beneficiaries—from 42 million in 1994 to over 72 million in 2024—highlights the growing dependency on these benefits. However, with predictions of fund depletions between the 2030s and 2050s, future retirees may face severe shortfalls.
Disparity in Retirement Benefits by Job Industry and Position Level
The research points out significant disparities in access to retirement benefits based on employment status and industry. For instance, Pew reports that over one-third of private sector workers lack access to employer-sponsored retirement plans. Among those with access, only 51.6% have defined contribution plans like 401(k)s available, and a mere 12.2% have access to pensions.
Data Insight: Full-time workers have substantially better access to retirement benefits compared to part-time employees, with a 24.4% gap in access to retirement plans. Industries characterized by higher levels of part-time work—such as retail and hospitality—show even greater disparities, underscoring a critical need for policy intervention to bridge this gap.
Geographic Impact on Retirement Benefits
Unemployment rates and cost of living by state play a crucial role in retirement planning. States with high unemployment rates and cost of living, like California and New York, pose significant challenges for residents trying to save for retirement.
Data Insight: The juxtaposition of high living costs and precarious employment conditions in these states makes saving for retirement not just challenging but often unfeasible, with many at risk of depleting their savings prematurely.
Racial and Ethnic Disparities in Retirement Access
The gaps in retirement plan participation among racial and ethnic groups are stark. White Americans participate in retirement plans at significantly higher rates than Black and Latinx communities. For example, there is an 18% gap between white and Black Americans and a 23% gap between white and Latinx Americans in retirement plan participation.
Data Insight: These disparities translate into substantial differences in retirement savings accumulations, affecting the quality of life and retirement security for these populations. Factors contributing to this include differential access to employer-sponsored plans and disparities in wages and employment types.
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