Nearly half of pre-retirees expect their primary source of retirement income to come from self-funded savings, says a new survey from Los Angeles-based Transamerica Center for Retirement Studies. Yet their median total household retirement savings is estimated to be just $67,000, according to the survey, far below what’s needed to fund a retirement that may last two or three decades, or longer.

“Many workers are inadequately saving and are at risk of not achieving a financially secure retirement,” said Catherine Collinson, CEO and president of the center, in a statement. (The center is a division of the Transamerica Institute, a nonprofit private foundation Collinson also heads.)

The solution, she added, “involves addressing demographic disparities, removing structural barriers, and future-proofing the system so everyone can retire with dignity.”

The survey of nearly 5,500 employees of for-profit companies was conducted between October 28 and December 10, 2021, in association with the Harris Poll.

Perhaps most significant among the findings was that many of these same people don’t have access to an employer-sponsored retirement plan.

Worse still, the survey found disparities based on income, educational attainment, location and race/ethnicity differences.

Lower income workers have less money and fewer opportunities to save, which isn’t terribly surprising. What may be surprising, though, is that only 60% of respondents with total household annual incomes of less than $50,000 are even offered a 401(k) at work. Among those who earn between $50,000 and $99,999, 74% are offered a retirement plan. Those with even higher household income are offered a retirement plan 76% of the time.

Participation rates are similarly skewed by household income. Among the poorest folks who are offered a 401(k), only 58% take advantage of it. In the middle group, 76% do. Among those whose household income of $100,000 or greater, the retirement-plan participation rate is 85%.

These disparities carry over into part-time workers. Fifty-one percent of part-time workers are offered a 401(k) or similar plan by their employer, and 59% of them participate. In comparison, 77% of full-time workers are offered a plan, and 80% of them participate.

“With lower pay and less access to employer-sponsored benefits, part-time workers are at a disadvantage in saving for retirement,” said Collinson.

What’s more, less than half of low-wage workers who qualify for the saver’s tax credit, a government incentive that rewards low- and moderate-income taxpayers who save for retirement, are even aware the program exists.

Educational attainment is another determinant of retirement readiness. Among workers with a college degree, 82% are offered an employer-sponsored retirement plan, and 87% of them say yes to it. In comparison, only 67% of those without a bachelor’s degree are offered a plan, and 74% of them participate.

“Educational attainment brings career opportunities, higher pay and better employer benefits, which translate to improved retirement confidence,” said Collinson.


Another factor is location: Rural workers are falling behind their urban and suburban counterparts.

Only 66% of rural workers are offered a 401(k) or similar employer-sponsored plan, the study found, and 72% of those rural workers participate, whereas 74% of non-rural employees are offered plans and 77% of those in urban settings partake while 80% of suburban workers do.

“Economic activity in the U.S. has become increasingly concentrated in urban and suburban areas,” observed Collinson, to the detriment of rural workers in terms of both their employment opportunities and their retirement preparedness.

Race and ethnicity may also play a role. In the survey, Black respondents were most likely to have been offered a retirement plan, at 80%, yet they were also the least likely to participate in them, with only a 65% acceptance rate among those who had the option. In comparison, 76% of Asian-Americans/Pacific Islanders had access to a retirement plan, with 78% of them participating; 73% of Hispanic workers were offered a retirement plan, and 79% accepted; and 71% of white employees had access to an employer-sponsored retirement plan, with 80% participating.

“Our societal focus on diversity, equity and inclusion has solidified the imperative for bridging racial inequalities,” said Collinson, adding that the causes of and solutions for these racial and ethnic inequities require “further research.”

One potential bright spot in the survey, however, involved LGBTQ+ employees. Fully 67% of those who so identified reported having been offered a 401(k) or similar employer-sponsored plan, with 77% participating. While that still lags the numbers of their non-LGBTQ+ peers, 73% of whom have been offered a plan, with 78% partaking, it’s pretty close and may be gaining steam.

“Historically, the LGBTQ+ community has been a demographic segment more likely to retire in poverty,” said Collinson. Recent progress in securing their rights, including the legalization of same-sex marriage, which makes same-sex spouses eligible for retirement benefits, may be beginning to make a difference. “Today’s LGBTQ+ workers have a brighter retirement future,” she said.