Dan Gudema, Founder of StartupPOP quoted in FORBES

Only A Third Of Workers Make This Key Retirement Move.

The retirement numbers have just gotten worse. According to a new analysis by the U.S. Census Bureau, two-thirds of Americans aren’t contributing anything to a 401(k) or other employer-sponsored retirement account. That’s nothing at all. The Bureau looked at tax records—not a survey of workers themselves—which may be a more accurate picture of retirement savings activity.

by Kate Ashford, CONTRIBUTOR.
I cover personal finance, work, and consumer trends.

And it’s not that employers aren’t offering the accounts, although when researchers looked at tax records of businesses, it appears that only 14% of all employers offer a 401(k) or similar plan to their employees. But since larger companies are more likely to offer 401(k) plans, and because more people are employed at big companies, the analysis suggests that nearly four out of five employees work somewhere that offers a 401(k) plan or something like it. But only 41% of workers at those firms are taking advantage of it.

The Census analysis suggests that employees making more money are more likely to contribute, but income isn’t the whole story. People who work part-time or who often change jobs may not be eligible for 401(k) plans at some companies.
Stephen Gibson, for instance, often goes long periods without a regular paycheck. “Currently I’m working on music full time, funded in part by extra savings that might otherwise have been put in a 401(k),” Gibson says. “I need the cash now rather than later.”

Some workers started contributing to a 401(k) account early but later had to cash out or stop contributing due to financial circumstances. Dan Gudema and his wife, for instance, started saving in their 20s but had to tap 401(k)s to pay medical expenses. “We ran into difficult times, mainly because my son had Asperger’s, required therapy, and I did not have the coverage,” says Gudema, 52, who lives in Florida. He points to three reasons the family stopped saving: “One is medical, the second is 529 and college prepaid for my sons. Third, having to sleep at night with a big credit card debt. I would rather get rid of the debt.”

View full article: https://www.forbes.com/sites/kateashford/2017/02/28/only-a-third-of-workers-making-this-key-retirement-move/#5358876715b8


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