42% of Full-Time US Workers Lack Access to Retirement Plan

New data from the Census Bureau’s Survey of Income and Program Participation show that 42% of Americans ages 18 and 65 who worked full-time in the private sector did not have access to retirement plans in 2024, according to a Economic Innovation Group report updated in November. EIG’s research stated that the data translates to 40.6 million people—and rises to 53.7 million when counting part-time workers.

Of all full-time, private-sector workers—regardless of their plan access—44.1% did not participate, and 50.5% did not receive an employer match last year. For the population of part-time employees, coverage was even scarcer. Among all part-time workers across the data set, 79% lacked access, a total of 80.4% did not participate and of the whole group 83.2% did not receive an employer match.

“We’re seeing a huge number of workers simply not being able to access one of the most powerful wealth-building tools that we have in the country,” says Benjamin Glasner, an EIG economist and co-author of the analysis. “What’s more surprising is that we don’t have a clear path for these people to take better advantage of these tax-advantaged and employer-provided plans.”

The Power of Income

Income plays a great role in determining who has access to a plan, EIG’s analysis stated. Nearly eight in 10 (78.7%) of full-time workers in the lowest-earning decile (earning less than $27,400 per year) lacked access to a retirement plan, compared to just 18.2% of the highest-earning decile (earning at least $180,600 per year) who lacked access. Meanwhile, only one-quarter of workers in the top half of earners lacked access to a plan—compared to 65.2% in the bottom 50%.

The data show the inequality persisted for employer matches, as well. In the bottom decile of the earnings distribution, 82.1% of workers did not receive employer matches, compared to only 20.3% of top-earning workers who did not either.

“In other words, a far greater share of high-income workers — for whom saving for retirement is easier in the first place, given their greater discretionary income — receive employer top-ups to encourage and force-multiply their retirement savings, while less than a quarter of low-income workers are so fortunate,” the report stated.

Notably, a larger share of higher-earning than lower-earning employees participated in retirement savings even without a match. EIG suggested higher-income earners might have been driven by the benefit of deferring some of their income tax bill until after retirement, when they will likely fall into a lower income tax bracket.

Lower-income earners, in contrast, tend to participate in plans that provide an employer match. Of the 17.8% at the bottom of the income distribution who participated, 86.1% received a match. The analysis indicated that efforts to maximize participation among lower-income earners may be more likely to succeed when they include an employer match.

Demographic Disparities

Low-skilled and minority workers experienced wide gaps in access, participation and employer matching, too, the analysis suggested.

More than 50% of Asian and non-Hispanic white workers reported receiving employer matches into their retirement accounts, making them the most likely to receive matches across the country’s major demographic groups. Only 39% of Black workers and 32.9% of Hispanic workers reported receiving matches.

In addition, the more education a worker had, the more likely they were to have access to matched contributions. This is consistent with incomes being correlated with both education and participation in retirement plans. Overall, 31.4% of workers with a high school diploma or less received matching employer contributions to their retirement plans.

Women without a high school diploma lagged two percentage points behind men in both participation in and access to plans. EIG reported that the reasons for the disparity included women having lower earnings, a greater likelihood of working in low-access industries such as leisure and hospitality and labor force participation affected by women’s need to provide dependent care.

EIG-Endorsed Solution

Glasner says the bipartisan Retirement Savings for Americans Act, originally introduced by Representative Lloyd Smucker, R-Pennsylvania, in December 2022, and most recently reintroduced in April, is the “most direct way of addressing the problem head-on.”

“The RSAA is designed not just to widen access, but also to increase participation by getting the incentives right—matching contributions for low-income workers, specifically,” EIG’s report stated.

The bill aims to establish federally run Roth-style after-tax retirement savings accounts for low- and middle-income workers who do not have access to an employer-sponsored retirement plan. If passed, the Department of the Treasury would administer the program, which would offer matching contributions of up to 5% via a 1% automatic contribution and a tax credit match of up to 4%. The tax-credit match would be phased out at the national median income level.

Glasner notes that the federal retirement accounts would be portable, allowing workers flexibility as they move both within and out of the workforce.

“The [U.S.] retirement system is in desperate need of reform,” EIG’s report stated. “RSAA would put millions of hardworking Americans on the path to financial security and comfortable retirements.”