That has been the subject of recent research by the Pew Charitable Trusts. They looked at employer and employee perspectives on saving, and made some interesting findings. For example, 2/3 of employees at small to mid-sized companies have access to a retirement plan at work, and 68% participate. That translates to 45% of workers at small to mid-sized businesses participating in a 401(k) or similar plan — and 55% not participating.
The research found it is much more likely for employees with a household income over $100,000 to participate than for lower income workers. They may find it easier to save, and are more likely to need the tax breaks associated with saving in a qualified plan. Even though auto features tend to increase participation and contribution levels, a significant percentage of plans at small to mid-sized companies don’t use them.
The concern is often that employees won’t like it — a perception that has been refuted by other research. Take a look at the Pew website for more information: www.pewtrusts.org.
Tags: 401K, 401k plan, contributions, income, retirement, retirement plan, retirement plan contributions, tax break