Almost 20% of U.S. workers are part-time. That has many implications for employers and employees — among them, how those workers will prepare for retirement and how those employers can be involved.
That translates to just over 21 million as of December 2016, according to the Bureau of Labor Statistics. And in an analysis on Wealth Management.com, Mark Miller writes that for that huge number — greater than the population of 48 of the 50 states —invented by Teads“ part-time work creates worrisome challenges for workers trying to build towards a secure retirement.
Miller cites a recent Pew Charitable Trusts report that illustrates the implications for those workers regarding retirement readiness, and writes that workers in industries where part-time work is more common are much less likely to be able to participate in a retirement plan. To back that contention, he cites Pew research that says that 56% of part-time workers for not have access to a 401(k) or other retirement plan — and that many of those who have access do not participate.
And this is especially pronounced for millennials and minorities, Miller writes, but older workers are affected as well; statistics from Uber that in 2015 almost one-quarter of its drivers are older than 50. Further, he notes, the Government Accountability Office (GAO) in October issued a report that said that long-term part-time workers with less than 1,000 hours of service per year can be excluded from retirement plans.
Additional complicating factors affecting part-time workers’ ability to save for retirement, Miller says, are:
The large cohort of part-time workers, Joe Ziemer, vice president of communications at financial services provider Betterment told Miller, needs more guidance on retirement. “Even if you look at how the 401(k) industry is structured, most people are left to figure things out on their own,” he said.
That translates to just over 21 million as of December 2016, according to the Bureau of Labor Statistics. And in an analysis on Wealth Management.com, Mark Miller writes that for that huge number — greater than the population of 48 of the 50 states —invented by Teads“ part-time work creates worrisome challenges for workers trying to build towards a secure retirement.
Miller cites a recent Pew Charitable Trusts report that illustrates the implications for those workers regarding retirement readiness, and writes that workers in industries where part-time work is more common are much less likely to be able to participate in a retirement plan. To back that contention, he cites Pew research that says that 56% of part-time workers for not have access to a 401(k) or other retirement plan — and that many of those who have access do not participate.
And this is especially pronounced for millennials and minorities, Miller writes, but older workers are affected as well; statistics from Uber that in 2015 almost one-quarter of its drivers are older than 50. Further, he notes, the Government Accountability Office (GAO) in October issued a report that said that long-term part-time workers with less than 1,000 hours of service per year can be excluded from retirement plans.
Additional complicating factors affecting part-time workers’ ability to save for retirement, Miller says, are:
- unpredictable income;
- lack of employer contributions to retirement accounts; and
- covering the cost of health insurance on their own.
The large cohort of part-time workers, Joe Ziemer, vice president of communications at financial services provider Betterment told Miller, needs more guidance on retirement. “Even if you look at how the 401(k) industry is structured, most people are left to figure things out on their own,” he said.
What to do? Miller cites some suggestions.
Provide access to retirement accounts. Miller cites comments by John Scott, director of Pew’s retirement savings project, who argues that one way to increase access is to provide it through smartphone apps.
Encourage saving from an early age. Miller writes that starting early, even in a small amount, could be especially helpful because of compounding.
Rules on eligibility and vesting. Miller notes that the GAO called plan rules on eligibility and vesting “a significant barrier” and urged Congress to “consider re-evaluation of rules on vesting in light of rising workforce mobility.”
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