Mainebiz

W W W. M A I N E B I Z . B I Z 17 M AY 1 4 , 2 0 1 8 F O C U S W E A LT H M A N A G E M E N T / R E T I R E M E N T No 'plan' for retirement A retirement plan is critical for financial security later in life. Yet, according to AARP, nearly half of American private sector employees — roughly 55 million — work for an employer that does not offer a retirement plan. Employers that do provide retirement plans have moved away from traditional pensions to savings plans, like a 401(k). Larger employers are more likely to pro- vide a retirement plan than smaller ones. The probability of having a workplace retirement plan also differs considerably by workers' earnings level, education, and race and ethnicity. By the numbers: In 2013, nearly half of private sector workers ages 18 to 64 worked for busi- nesses that did not offer a retirement plan. Small business employees flying solo: Workers in businesses with fewer than 100 workers were much less likely to have access to a retirement plan. Education matters: About three out of four workers with less than a high school degree did not have an employer-provided retirement plan — a much higher percent- age than workers with some college (49%) or a bachelor's degree or higher (35%). Earning more does not necessarily mean someone has a retirement plan: More than 12 million employees in the top two earning quintiles ($40,000 or more) did not have access to a workplace plan. These workers represent about 23% of the 55 million employees without an employer-provided retirement plan. Access to a plan differs substantially by race and ethnicity: About two in three Hispanic workers and roughly half of African Americans and Asians lacked access to an employer-provided retirement plan. Minorities accounted for about 41% (22 million) of the 55 million employees without a workplace retirement plan. S O U R C E : AARP Public Policy Institute any employers in Maine are taking greater steps to get companies to invest in the 401(k) plan. As Laurie Schreiber reports on Page 22, some of Maine's largest companies are providing incentives to employees to prepare for the future. At the same time, Renee Cordes reports on Page 18 that investment firms are targeting millennials in an effort to broaden their base of clients. And, as the data below indicates, Americans as a whole have a lot of work to do in preparing for retirement. S TA R T I N G O N F O L L OW I N G PA G E » M WHO IS NOT COVERED BY A WORKPLACE RETIREMENT PLAN Bleak outlook Among those with some retirement savings, the median amount won't offer much cushion in retirement: S O U R C E S : U.S. Government Accountability Office; U.S. Census Bureau's Current Population Survey, March Supplement 2014/AARP Public Policy Institute 55–64 65–74 Median household savings in this age bracket is $104,000, or the equivalent to an inflation-protected annuity of $310. Median household savings in this age bracket is $148,000, good for only $649 a month. Social Security provides most of the income for about half of households age 65 and older. U.S. private wage and salary workers whose employer does not offer a retirement plan, 2013 18–34: 57.6% 35–44: 45.9% 45–54: 41% 55–64: 40.5% PORTLAND 207. 482.7920 | AUBURN 207. 791.2110 | NorwaySavings.bank these are my people I N V E S T M E N T M A N A G E M E N T T R U S T S E R V I C E S F I N A N C I A L A D V I C E E S TAT E P L A N N I N G • Not FDIC Insured • No Bank Guarantee • May Lose Value N O R WAY S AV I N G S A S S E T M A N AG E M E N T G R O U P As fiduciaries, we act with only your best interest in mind.

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