A fringe HR / benefit management topic that I pay close attention to is retirement savings. Even for today’s veteran workforce, retirement savings plans are an important but underutilized employer benefit. It is no wonder that when I read a recent article on this topic posted on cnn.com that I sat there staring at my computer screen and shaking my head(http://www.cnn.com/2007/LIVING/worklife/12/12/law.teens.retirement.ap/index.html). The jist of the article was that by the time today’s teenage workers are ready to retire, well over a third will have saved ZERO, NADA, ZILCH to augment their less than adequate government social security income.Let me emphasize this point by repeating it. The report found that more than one out of every three American workers born in 1990 will have zero dollars in a 401(k) or other similar style retirement savings plan!Thinking about it a bit further I said to myself, “Well, this is no reason for alarm. Who would expect a teenage kid to be squirreling away some of their minimum wage earnings for retirement? They have 45 years to save.” But then I read on and better understood the alarming point of the article. The data supporting this prediction comes from the U.S. Government Accountability Office and is based on current and historical trends of workforce retirement savings rates and employer savings plan offerings.
The GAO report estimated 36.8 percent of today’s 17-year-olds will have no money in a 401(k) or similar plan when they retire. The numbers will be worse for low-income workers: 63 percent of them will have zero dollars in a 401(k)-type account when it comes time for them to retire.
