ROSELAND, N.J., April 28, 2014 /PRNewswire/ -- ADP ®, a leading global provider of Human Capital Management (HCM) solutions, today announced the findings of a new ADP Research Institute ® study that examined the retirement savings rates of approximately 9 million U.S. employees in 2013. The study found that 60 percent the workers saved for retirement at an average salary deferral rate of 7 percent. Across most wage categories, women saved at a higher rate than men, and workers save more as they approach retirement.
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" The Retirement Savings Paradigm: Factors Influencing Saving found that more women are saving for retirement than men," said Ahu Yildirmaz, vice president and head of the ADP Research Institute. "Factors such as lower incomes and time spent out of the workforce still put women at greater risk of not achieving a secure retirement. But efforts by financial advisors and agencies to raise awareness among women of the importance of saving for retirement appear to have made an impact."
In addition to determining the average retirement saving rates, segmentation of the data by age, gender, compensation level, and industry revealed the following insights:
- More Women are Saving Than Men: Not only are more women saving, they have a higher savings rate than men, despite the fact that women are disproportionately represented in lower wage jobs.
- Gen Y Workers Are Slow to Start: Less than half of employees in the 20-29 age bracket saved compared to 65 percent in the 50-60 age bracket. What's more, 20-29 year olds saved on average less than 5 percent, whereas those in the 50-60 age bracket set aside 7.7 percent. At the same time, those in the 61-69 bracket saved more than 9 percent. This data reinforces a lifetime savings pattern: as retirement nears, more employees attempt to "catch up" on their savings.
- Small Business Employees Save More: While a higher number of employees who work for larger companies saved, they tended to save at lower rates than employees who work for smaller firms. In companies with fewer than 20 employees, the savings rate exceeded the average of 7 percent across all the industries measured.
- Compensation Dictates Savings Rates: In general, workers in higher wage groups save, and they save more. For example, in large companies (more than 5,000 employees), only 50 percent of workers in the lowest wage category saved, but 80 percent of those earning more than $110,000 saved.
- Industry Matters: Workers in the financial activities and information industries had retirement saving rates that are among the highest, at 70 percent and above. In comparison, only 37 percent of employees working in the leisure and hospitality sector saved. Construction is only slightly better, with 45 percent of employees having put away money.