Older Employees More Likely to Participate in Retirement Plans

The likelihood of being a retirement plan participant increases with age, according to the Employee Benefit Research Institute (EBRI).

Just over 60% of all full-time, full-year wage and salary workers between ages 54 and 64 were participants in 2006, compared with just over 29% of those ages 21 to 24, EBRI said. Forty-five percent of all workers age 25 to 34 participated in a retirement plan in 2006, as did 54% of workers age 35 to 44, and slightly less than 60% of workers age 45 to 54.

The same was true for workers in either the public or private sectors, though the fraction of public-sector workers participating in a retirement plan was significantly higher than that of private-sector workers in the same age group. EBRI found just over 78% of public sector workers between the age of 45 and 54 participated in a retirement plan in 2006, versus 48% of workers in the private sector of the same age group.

As for all workers, the number of workers in each sector participating in a retirement plan decreased with age: 76% of public sector and 43% of private sector workers, respectively, for those age 35 to 44; 67% and 35%, respectively, for age 25 to 34; and 41% and 18%, respectively, for those age 21 through 24.

When examining workers by age and earnings levels, younger workers are less likely to participate in a retirement plan than older workers with the same earnings. Even for the highest earners ($50,000 or more), EBRI found 49.7% of those ages 21 to 24 participated in a plan, compared with 71.3% of those ages 45 to 54.

The full Issue Brief is available online at www.ebri.org.