Nearly 50 percent of California workers will retire in or near poverty, according to a study by the University of California, Berkeley's Center for Labor Research and Education.
Californians have less access to employer retirement options, which makes their situation worse than the rest of the nation, according to "California Workers' Retirement Prospects."
The report found that California retirees rely predominantly on Social Security income, "a trend that could worsen as future workers retire without employer-sponsored benefits," the report said. Social Security provides 79.1 percent of income for the bottom 25 percent of retirees and 70.3 percent for the middle 50 percent, the report found. Employer-sponsored pensions made up about 15.5 percent of retirement income for the middle 50 percent of workers. Two-thirds of retirees in poverty are women.
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The report is part of a larger work called, "Meeting California's Retirement Security Challenge."
Only 52 percent of California workers work for companies that offer retirement plans, compared to 58 percent across the United States. Of those who participate in employer-sponsored plans in California, 61 percent are in defined-contribution plans, such as 401(k)s.
The study's authors used data from the Survey of Income and Program Participation 2008 panel to project that 46.7 percent of California workers age 25 to 64 will have retirement incomes below 200 percent of the federal poverty threshold for individuals, which is $22,322 per year.
"Our research shows how important Social Security is to the middle class," said Nari Rhee of the UC Berkeley Center for Labor Research and Education, "and in order for today's workers to retire in dignity, they also need access to a supplemental plan that can provide secure income in retirement."
Sylvia Allegretto, a research economist with UC Berkeley's Center for Wage and Employment Dynamics, said that, "there is greater income inequality among retirees in California than in the U.S. as a whole. "This will have significant long-term ramifications for individuals, families and all levels of government in the decades to come."
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