The 2017 MassMutual Retirement Savings & Household Income Study reveals that despite a
high participation rate among middle-income workers, the lower their income, the less likely
they are to reap the full advantages from their employer's retirement savings plan.
"Nearly nine in 10 middle-income Americans participate in employer-sponsored retirement
plans," Tom Foster, national spokesperson for MassMutual's Workplace Solutions, says in the
report, adding that the company's research "shows that savers with higher incomes are far more
likely to contribute a higher percentage of their income and take full advantage of matching
contributions."
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The study finds that overall, 84 percent of middle-income Americans whose employer matches
contributions to a 401(k) manage to save enough to get the full match. But annual household
incomes, as well as gender, are determining factors in the likelihood of the saver contributing
enough to obtain the full match.
Among the study subjects, with annual household incomes ranging between $35,000 and
$150,000, 67 percent of those making between $35,000–$44,000 said they contributed enough to receive the full match, while 10 percent said they did not and 23 percent weren't sure.
But it was a different story the higher on the income scale the respondent was, with 77 percent of
those making between $45,000–$74,000 saying they contributed enough and 12 percent saying
they did not; the number of "not sures" fell to 11 percent.
For those making $75,000+, 90 percent said they contributed enough for the full match; 5 percent did not and 4 percent weren't sure.
Among men, 89 percent contributed enough, while among women only 77 percent did; 5 percent
of men did not, compared with 11 percent of women, and 6 percent of men weren't sure
compared with double that—12 percent—of women.
More education is definitely in order, particularly the lower down the salary scale one goes, so that people at least know whether they're putting enough money into their accounts to get the full employer match.
Overall, lower-income workers are twice as likely as higher-income workers to skip retirement
plan saving, largely because of income; 70 percent with less than $45,000 in household income
said they cannot afford to save for retirement, compared with just 23 percent of those earning
$75,000 or more.
Other reasons for passing on savings were lack of a compelling employer match or no match (23
percent), a preference to manage retirement savings outside an employer's plan (14 percent), and wanting to save in an investment vehicle that provided greater accessibility to the money (14
percent).
Just one in four employers, the study finds, offers financial education or planning assistance,
with the most likely education being retirement planning.
Three in 10 middle-income workers say they wish their employer offered more retirement planning and one in five would like help with their retirement investments.
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