Just the Facts
What You Need To Know About the Retirement Security Crisis
alifornia is in the midst of a retirement security crisis that threatens our state’s future. Since the economic collapse of 2008, poverty amongst California’s seniors has risen as they’ve lost their homes, seen their pensions slashed and been forced to rely on a combination of Social Security and meager savings accounts to survive. The numbers tell the story:
- Half of working Californians are projected to retire in near poverty (200% FPL).
- 45% of private sector workers in California do not have access to a retirement savings plan at work and only 37% of private sector workers participate in an employer-sponsored retirement plan – mostly 401(k) plans.
- Low-wage workers are particularly vulnerable; only 22% participate in an employee sponsored retirement plan.
- About 2/3 of workers without access to a retirement plan are people of color; 46% are Latino
- Women are the majority of California retirees (58.5%).
- Women are more likely to work low-wage jobs, meaning they have smaller savings and receive less support from Social Security.
- In a recent study, retired men report typical annual incomes nearly 75% higher than typical retired women’s incomes ($24,794 compared to $14,225).
- LATINO seniors are twice as likely to be poor than other US seniors.
- Only 35% of Latino workers are employed by a company that offers an employer sponsored retirement plan, compared to 61% of white workers.
- 44.2% of Latinos age 65+ receiving Social Security have no other sources of income.
- 77% of hispanic women 65+ are at risk of economic insecurity.
- AFRICAN AMERICANS have shorter life expectancies than other groups.
- 26% of African Americans report making early withdrawals of their retirement savings to pay for living expenses, compared to 22% of Hispanics and 18% of all other groups.
- 72% of African American women 65+ are at risk of economic insecurity
- Language barriers prevent many ASIAN AMERICAN seniors from accessing Social Security.
- Access rates of Asian American workers to employer sponsored 401(k) plans is about 57.4%, the highest of any other racial subgroup.
- On average, life expectancies for API individuals are longer than other populations.
- 59% of Asian American women 65+ are at risk of economic insecurity.
Social Security is no longer enough.
- Upon retirement, Social Security only replaces about 40% of the average person’s income.
- The average Social Security benefit is only $1,182 a month.
- Many low-wage workers, including homecare and childcare workers, do not receive Social Security.
- Corporations and financial institutions (aka the 1%) caused and profited from the economic crash, then promoted attacks on unions and working families.
In the past 40 years alone, the 1% saw their share of national wealth spike as workers’ wages remained stagnant.
Public sector workers with defined benefit pensions saw their benefits lowered, retirement ages raised, and their rights to collective bargaining attacked and even eliminated by legislation in states across the country.
Americans agree: Now is the time to act
We’re not in this struggle alone. A recent survey found:
- 92% of Americans agree that we have a retirement security crisis.
- 75% want a privately run, universal and portable pension system – much like SB 1234.
- 81% of Americans would participate in such a plan
California is leading the way
What are we doing about the retirement security crisis that affects more than 80% of Californians?
- We’re developing new ways for private sector workers to save for retirement (e.g. strengthening and passing Secure Choice legislation).
- We’re creating a new narrative about retirement in California through community forums, online organizing, public actions and storytelling.
- We’re supporting legislation that protects and strengthens Social Security.
- We’re driving efforts to build a new economy where retirement funds are invested responsibly.