Defying Assumptions: Majority of Millennial, Blue Collar and SMB Employees Save for Retirement

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New data from Human Interest shows 65-90 percent of employees at small and medium-sized businesses consistently participate in an offered 401(k) plan, across geographies, industries, and ages.

401(k) Participation Rates by Industry

While most people assume younger employees, employees at smaller companies, and employees in blue-collar professions can’t afford to save, this data shows that this is definitively not true.

New data from Human Interest, the affordable, full-service 401(k) provider for small and medium-sized businesses (SMBs), challenges the conventional wisdom about the types of Americans saving for retirement. While SMBs make up the majority of the country’s workforce, their retirement habits have been largely unknown, because until recently providing a 401(k) was cost and time prohibitive for most businesses with less than 1000 people.

“While most people assume younger employees, employees at smaller companies, and employees in blue-collar professions can’t afford to save, this data shows that this is definitively not true. We see that 65-90 percent of employees who are offered a 401(k) consistently save, across regions, professions, and generations,” said Jeff Schneble, CEO of Human Interest. “It’s true that white-collar professions like finance, healthcare, and tech have the highest participation rates, and this is probably what people would expect. But what may surprise folks is that half of our customers are in blue-collar industries like retail, manufacturing, and construction - and we still see the majority of employees in these companies contributing to a 401(k) when given the opportunity.”

The 401(k) was introduced as a savings vehicle in 1978 when Congress passed the Revenue Act that allowed employees to make pre-tax contributions to save for their future. It was immediately adopted by large corporations competing for workforce. But because it was expensive and legally complex, it was a tax advantage reserved for those working for corporations who could afford the lengthy time and large team required to administer, leaving SMBs and their employees at a disadvantage.

“Setting up a 401(k) used to be daunting for small business owners, but we make it extremely easy for employers and employees to get started. As a result see a 93 percent participation rate when employers launch a plan with our recommended configuration,” said Jeff.

Key findings of the data show:

While Squeezed, the Sandwich Generation Saves
When examined by age, regardless of generation, almost 3/4 of everyone aged 25-49 is contributing to their 401(k).

  • The oft-maligned millennials are modeling strong savings, with people aged 30-39 participating at the highest rate (72 percent).
  • Despite higher limits, Gen X savers (50-59) fall slightly behind, averaging between 65 and 70 percent participation.

The Youngest and Oldest are On Board

  • Nearly half (47 percent) of those just entering the job market (20-24) contribute to a 401(k) and those already in retirement age (65 and up) do so at a similar rate (50 percent).

It’s Not Just A Coastal Phenomenon

  • While the East Coast has the highest participation rate (78 percent), the majority of employees living in the Midwest and Southern regions of the U.S. are also contributing to a 401(k) when given the opportunity (70 and 65 percent, respectively).

And It’s Not All Finance and Tech Dollars

  • Making Money Moves: On average, 86 percent of people working in finance participate in an offered 401(k) plan, with 100 percent participation among the accountants in the sample.
  • Tech Takes Advantage: A similar percentage of tech workers (85 percent) - from startups to software providers and telecommunications - will invest in a 401(k) when the opportunity presents.
  • Well and Wealthy: On average, 76 percent of healthcare providers or healthcare service employees participate in an offered 401(k) plan, with those working on peace of mind participating at the highest rate (therapists/psychologists at 86 percent).
  • Blue Collar Builds its Future: On average, 66 percent of blue collar workers - from automotive to manufacturing - participate in an offered 401(k) plan.
  • Don’t Shortchange the Service Sector: On average, 52 percent of people working in food service and hospitality will save in an offered 401(k) plan.

“People are flooded with advice on saving for retirement, but the real barrier to entry is whether or not your employer offers a 401(k). Small and medium-size businesses employ almost half the nation’s employees, yet 86 percent of those people do not have access to this fundamental wealth-building benefit, and therefore don’t save,” said Jeff.

Comprehensive data for each of the above categories is available upon request. Don’t have access to a 401(k)? Visit to download The Employee’s Guide to Asking Your Manager or Boss for a 401(k).

The participation rates were calculated by comparing the number of employees eligible to participate in an employer-sponsored Human Interest 401(k) with the number currently participating. These rates were analyzed by age group, state, and industry. The data was compiled and analyzed by Human Interest, and is the first part of a series of findings about Americans’ retirement preparedness. Additional results will be released early next year.

About Human Interest
Human Interest is the affordable, full-service 401(k) provider for small and medium-sized businesses. With Human Interest, taking care of your employees' financial futures has never been easier. Headquartered in San Francisco, CA, Human Interest provides retirement savings plans to over 1,600 companies and ongoing support to more than 50,000 employees. For more information please visit or follow us on LinkedIn.

Investment advising services are provided by Human Interest Advisors. This is not an offer, solicitation, or advice to buy or sell securities in jurisdictions where Human Interest Advisors is not registered. An investor should consider investment objectives, risks and expenses before investing. More information is available within Human Interest's' ADV. There are risks involved with investing. Investors should consider all of their assets, income and investments. Portfolios are subject to change. All opinions and results included in this publication constitute Human Interest Advisors' judgment as of the date of this publication and are subject to change without notice.

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