The number of U.S. workers under age 30 who participated in some kind of tax-favored retirement plan fell 7.3% between 1997 and 2000, to 13.2 million.
Researchers at the Congressional Budget Office have published data on retirement plan participation rates in a paper aimed at members of Congress who are concerned about the effects of tax laws and retirement plan contribution rules on participation rates.
Although the total number of U.S. residents who had a 401(k) plan, an individual retirement account, a defined benefit pension plan or some other type of retirement plan held steady at about 68 million between 1997 and 2000, the percentage of workers participating in such plans fell to 50%, from 51%.
The number of participating workers fell 5% for the 30-44 age group, rose 9.2% for the 45-59 age group and rose 2.3% for the 60 and over age group.
The number of young workers, or “Millennial” generation workers, who participated in all types of retirement plans fell partly because the number of workers under 30 fell 1.7%, to 40 million, and partly because the number of Millennial workers participating in defined benefit pension plans and other plans funded entirely by employers fell 18%, to 6 million, according to CBO figures.
Millennials compensated by flocking to IRAs. Although only 4% of Millennial workers contributed to IRAs in 2000, the number of workers in the age group who contributed to IRAs increased to 1.6 million, from 1.2 million.
The average Millennial IRA contribution increased to $1,873 in 2000, from $1,592 in 1997.
A copy of the CBO report is on the Web at Document Link