Nearly half of all workers are not contributing to a retirement account. An estimated 3.65 million workers do not have access to an employer-provided retirement plan, and minorities are particularly vulnerable.
Recruitment is a key issue in the public pension debate. While pensions have virtually disappeared from the private sector over the past decade, almost all public sector employers still offer defined benefit pension plans. Public sector wages are offset by retirement benefits, and many argue that recent benefits cuts will affect worker retention and quality.
According to the National Retirement Risk Index (NRRI), over half of today’s working families are not saving enough to maintain their pre-retirement standard of living. The NRRI is based upon target replacement rates which assume a household’s goal is to accumulate enough wealth pre-retirement to maintain the same standard of living during retirement. Because lower-income families spend a higher portion of their income on basic needs, target replacement rates vary depending on the income group.
The Social Security Administration's 2014 Trustees Report found little change from the previous year. While Social Security’s 75-year deficit rose slightly from 2.72 percent of payroll to 2.88 percent, the overall date of the trust fund’s exhaustion is still 2033 and the deficit is still 1 percent of GDP. After the trust fund runs out in 2033, payroll taxes would be sufficient to cover around three-quarters of benefits, assuming tax rates and benefit formulas remain constant.