Two-thirds of Americans fail to contribute anything to a 401(k) or other retirement account available through their employer, according to the Census Bureau.
The latest data is alarming financial experts, who say Americans are not saving enough for retirement. Only about a third of workers are saving in a 401(k) or similar tax-deferred retirement plan, according to researchers Michael Gideon and Joshua Mitchell, who analyzed W-2 tax records from 2012 to identify 6.2 million unique employers and 155 million individual workers.
A separate study last year
showed that 48 percent of workers age 55 or older and nearing retirement have saved less than $100,000. A third of workers have saved less than $25,000, according to the Employee Benefit Research Institute.
There may be a reason why so few are saving. Some companies aren’t offering a retirement savings plan; larger companies are more likely to, the study shows. Also, if you’re an independent contractor, which is common in the real estate industry, saving for retirement often falls onto your shoulders.
The analysis found that four out of five workers are employed by companies that offer a 401(k) or similar plan. However, most workers aren’t using them, either because they’re not eligible or they’re failing to sign up. Some companies require employees to work for a certain amount of time before they can sign up for a 401(k), and employers aren’t required to allow part-time workers into a plan until they’ve worked 1,000 hours during the previous year.
Here are some resources, geared to real estate professionals, to help you start saving:
The Retirement Planning Tool Kit
Worksheet: Get Ready for Retirement
Planning for Retirement
Tips for Choosing an IRA
Source: “Two-Thirds of Americans Aren’t Putting Money in Their 401(k),” Bloomberg (Feb. 21, 2017)