Nearly every state falls short in key areas that measure retirement readiness, according to a report presented recently at the National Institute on Retirement Security's fifth annual retirement policy conference.
The report, "The Financial Security Scorecard: A State-by-State Analysis of Economic Pressures Facing Future Retirees," gauged the relative performance of all 50 states and the District of Columbia in three areas—anticipated retirement income, major retirement costs such as housing and health care, and labor market conditions for older workers.
The data showed major areas of trouble affecting most or all states. For example, the highest-ranking state for workplace retirement plan participation in 2012, Iowa, had only 54 percent of private employees participating in a pension or 401(k).
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In addition, the number of states with more than 30 percent of older households experiencing a housing cost burden increased from 14 to 31 from 2000 to 2012.
The highest-ranking state was Wyoming, while the states ranking the lowest were California, Florida and Mississippi.
"We conducted this study to drill deeper and understand better the scope of the nation's retirement crisis on a state basis. Now, policymakers can identify the most urgent priorities for addressing the looming financial security challenges of the aging populations in their state," Diane Oakley, NIRS executive director, said.
"The retirement savings shortfall has become increasingly important at the state level because policymakers understand that it can have profound impacts on strained state budgets. We know that the largest source of retirement income for most Americans is Social Security, but this federal program typically provides only a fraction of what most people need to be self-sufficient."
"The good news is that some states already are considering policies to reduce future retiree poverty by encouraging workers to save today," Oakley added.
The report was authored by Christian E. Weller, professor of public policy at the University of Massachusetts Boston, Nari Rhee, manager of research at the National Institute on Retirement Security, and Carolyn Arcand, doctoral candidate at the University of Massachusetts Boston.
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