Fewer workers take part in retirement plans

The percentage of U.S. workers who participate in their employers’ retirement plans slipped slightly in 2012, according to a report by the Employee Benefit Research Institute.

Despite the tax savings and long-term benefits of stashing pre-tax income in retirement plans, the majority of workers fail to take advantage of employer-sponsored programs, such as 401(k) accounts, the group reported.

The 39.4 percent participation rate in 2012 was a slight decrease from a 39.7 percent rate a year earlier, the group said.

Government employees were much more likely to participate, with 71.5 percent contributing to their retirement plans, the report said.

Those less likely to participate were younger, nonwhite or unmarried or had lower education levels, the report said. Also, those with lower income levels or health problems were less likely to participate.

Women participated at lower rates than men, the report said. Latinos born outside the United States had “substantially lower” levels of participation, the report said.

Financial advisors have long counseled workers to contribute to their 401(k) accounts because many employers no longer offer traditional pensions and Social Security will not provide enough income for most people during retirement.

One of the most significant advantages of 401(k) accounts is that workers do not have to pay taxes on the contributions until the funds are withdrawn. This allows money that would have been paid in taxes to generate interest and investment income that can compound for decades.

More in Herald Business Journal

Aerospace workers adjust to changing industry

The number of Boeing workers dropped almost 10 percent since last year.

Tom Hoban
Are millennials warming up to life in suburbia?

They dominate the apartment market and their wants need to be accounted for, says columnist Tom Hoban.

Camano artist mixes flask, paintings for successful cocktail

Art flasks prove popular as bachelorette gifts, birthday presents and wedding favors.

Fluke’s T6 Electrical Testers receives Innovation Awards honor

Fluke’s T6 Electrical Testers have received top honors in the Tools and… Continue reading

Everett volunteer named ‘community champion’ by Molina Healthcare

Everett’s Jorge Galindo was one of seven people across the state to… Continue reading

Cascade Valley Health to hold Festival of Trees in Arlington

Cascade Valley Health Foundation will be holding their fifth annual Festival of… Continue reading

7-Eleven program helped add 500 trees, shrubs to Everett park

Last month, 7-Eleven helped plant more than 500 trees and shrubs at… Continue reading

Pentagon inspector general praises secret $80 billion bomber

US Government Accountability Office in 2016 rejected a protest filed by Boeing-Lockheed Martin.

Everett’s Sentry Credit celebrates a quarter century in business

Sentry Credit Inc. in Everett is celebrating its 25th year in business.… Continue reading

Most Read