America’s 401(K) shame: Half of workers lack access to an employer-sponsored retirement plan – here are the states worst affected

Fewer than half of U.S. workers are eligible for retirement benefits through their jobs, a new study finds, leaving millions at risk of insufficient savings for later life.

About 56 percent of the U.S. workforce — or about 69 million people — don’t have access to an employer-sponsored plan, according to figures. research of the Economic Innovation Group (ESV).

The share is lowest in Florida, where only 33 percent of people have access to workplace plans.

The second worst is Georgia, where only 37 percent of people can enroll in a retirement plan, followed by Rhode Island, where only 39 percent have access.

Employer-sponsored 401(K) plans provide employees with an automatic way to save for retirement while taking advantage of tax breaks and matching contributions from the company.

The Census Data analysis found that Americans’ willingness to retire is also strongly determined by income, with higher-income households much more likely to save for retirement than lower-wage households.

Only 30 percent of the low-income workforce — those earning less than $37,000, according to EIG — have access to a 401(K) or other employer-provided retirement plan.

Florida, California and Connecticut are the worst-performing states, where less than a quarter of low-income workers have a plan.

This is especially affecting California, where 3.6 million low-income workers lack access to an employer-provided retirement plan — the largest number in the country.

Even when low-income Americans have access to a plan, they are less likely to participate in savings than higher-income workers, the study found.

The survey also revealed a clear geographic divide when it comes to workplace plans. At 49 percent, the Midwest has the highest regional percentage of access to employer-sponsored 401(K) plans and the like.

This is seven percentage points higher than in the South, where only 42 percent of people have access.

“If we don’t have the ability to engage workers in generating a real nest egg, then in the long run there will be high rates of elder poverty in those states,” said Benjamin Glasner, associate economist at EIG. CBS.

At the other end of the spectrum, however, Iowa is the top state for offering employer-provided retirement plans; 58 percent of people have access to it. Despite this. only 50 percent of the inhabitants are registered for this.

About 57 percent of people in Idaho, meanwhile, have access to a retirement plan at work, with 46 percent taking up the offer, and 55 percent of Montana residents do — with 45 percent signing up for a plan.

It comes after a landmark report earlier this month found that wealthy households have nearly ten times more money saved for retirement than middle-income households.

Wealthy households have nearly ten times more money saved for retirement than middle-income households, government accountability office figures show

Analysis by the Government Accountability Office shows that this gap has increased exponentially over the past 20 years.

A high-income household has saved about $605,000 over the last few years – compared to $64,300 in a middle-income home.

In 2007, these figures were $330,000 and $86,800 respectively.

In addition, only one in ten low-income households has money saved in a retirement pot – compared to one in five in 2007.