Who gets the upper hand on retirement?
If you are among the lowest paid 10 percent of private industry workers, you may have the deck stacked against you when it comes to retirement savings.
If you are among the lowest paid 10 percent of private industry workers, you may have the deck stacked against you when it comes to retirement savings. In 2014, only 27 percent of the lowest paid 10 percent of private industry workers had access to retirement benefits through their employers. However, of those lowest-paid workers with access to retirement benefits, only 39 percent participated in the retirement plans offered by their employers in 2014 according to a report by the United States Bureau of Labor Statistics (BLS).
Those workers who start saving for retirement early can accumulate a significant amount of money, but for the lowest-paid workers, there is another problem. According to the BLS report, real weakly earnings for the lowest paid 10 percent essentially stayed unchanged over the last 35 years. These workers earned less than $383 per week in 1979 and less than $379 per week in 2014. One might expect that their overall wages should increase over time. Thus if a person saves a percentage of their income, the amount saved would increase over time. This is not true for the lowest-paid workers. At the same time, real earnings increased for the highest earners.
For some, cutting spending is just not enough; they must increase their income if they are going to be able to save money for retirement. It may make sense to take on a part-time job and save the extra earnings, but you will need to have a good spending plan. Maybe a move to a new employer would be a benefit even for the same wages. Find out if your prospective employer offers a defined-benefit plan. A defined-benefit plan provides employees with guaranteed retirement benefits based on a formula that usually depends on a worker’s age, years of service, and earnings before retirement.
If you would like to find more about money management, visit this website. You can learn more about making a plan to manage your money and gaining more control over your financial situation. In addition, Michigan State University Extension offers a variety of money management programs throughout the state of Michigan.