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Title: New Retirement Plan for Private Sector Workers Would Strengthen Economic Security in Kentucky
Citation Type: Miscellaneous
Publication Year: 2016
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Abstract: The population is aging in Kentucky and across the country as the baby boomers reach retirement age, with the share of Kentuckians over the age of 65 expected to grow from 15 percent today to 20 percent by 2030. Yet too many in the state are deeply underprepared for financial security in retirement. The growing elimination of more secure defined benefit plans in the private (and more recently the public) sector has worsened the problem, and the current level of Social Security benefits is not adequate for a decent standard of living. The average defined contribution account (such as a 401(k)) balance for current workers in Kentucky was only $32,499 in 2012, and many workers have jobs where no type of plan is offered at all. More must be done at all levels of government to promote a more secure retirement for the sake of retirees and the economy as a whole. A comprehensive solution to the problem would include protecting and strengthening defined benefit plans as well as Social Security. Another aspect is to increase the number of private sector workers who participate in an employer-sponsored retirement plan. According to one analysis, just 43 percent of Kentucky private sector workers in 2012 participated in such a plan, the 13th lowest coverage rate in the nation, down from 49 percent in 2000. Fortunately, a number of states are now taking action to create retirement plans for employees at private workplaces that do not offer one and Kentucky should join them. Such a program would help increase quality of life for seniors, assist small businesses in attracting and retaining qualified employees and improve the economy as a whole as fewer Kentuckians rely on assistance in their later years.
Url: http://kypolicy.org/dash/wp-content/uploads/2016/08/Retirement-Plan-Report-Final.pdf
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Authors: Spalding, Ashley
Publisher: Kentucky Center for Economic Policy
Data Collections: IPUMS CPS
Topics: Aging and Retirement, Labor Force and Occupational Structure
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