Fifteen percent. That is the share of the lowest-paid tenth of private-sector workers in America who were enrolled in a retirement plan at work in March 2025, according to the Bureau of Labor Statistics. Among the highest-paid quarter of workers, it was 80%.
The old deal had three parts: work full time, get a paycheck, get a retirement. The paycheck part has been eroding for decades. The retirement part has mostly been quietly removed, and the people with the least of it left are the ones who could least afford to lose it.
The pension is gone. The 401(k) is optional.
In March 2025, 72% of private industry workers had access to any retirement benefit through their job. Only 53% actually participated. And only 14% had access to a defined benefit plan, the kind of pension that pays a set amount every month for the rest of your life.
Everyone else got a defined contribution plan, usually a 401(k), if they got anything. That is a different product. A pension is a promise from the employer. A 401(k) is an account that you fund out of your own paycheck, invest on your own, and hope is enough. The risk moved from the company to you.
The Federal Reserve’s own survey shows the handoff by age. Among adults 65 and older, 52% have a defined benefit pension. Among prime-age adults, 25 to 54, it is 20%. The people doing the work now are far less likely to have the guaranteed income that today’s retirees have.
Access falls with your paycheck
If a 401(k) is the whole retirement system now, then who gets one matters. The BLS numbers for March 2025, private industry, sorted by average wage:
- Lowest 10% of wages: 38% have access, 15% participate.
- Lowest 25% of wages: 49% have access, 23% participate.
- Highest 25% of wages: 91% have access, 80% participate.
- Highest 10% of wages: 93% have access, 83% participate.
Part-time workers: 47% access, 23% participation. Workers at private establishments with fewer than 100 employees: 59% access, and only 6% can get a defined benefit plan. At establishments with 500 or more workers, 36% can.
So the system does not just leave low-wage workers with less money to save. It also leaves most of them without the account to save it in. Even where a plan exists, the low take-up is not a mystery. You cannot defer income you need for rent this month.
Only a third think they are on track
The Federal Reserve’s Survey of Household Economics and Decisionmaking, published in May 2026, asked adults about their finances in 2025. Among people not yet retired, 35% said their retirement savings plan was on track. That share was unchanged from 2024 and lower than in 2021.
Split it by family income and the picture sharpens:
- Under $25,000: 15% have a tax-preferred retirement account, 3% have a pension, 7% say they are on track.
- $25,000 to $49,999: 38% have an account, 9% a pension, 16% on track.
- $50,000 to $99,999: 65% have an account, 21% a pension, 29% on track.
- $100,000 or more: 89% have an account, 33% a pension, 59% on track.
Even at six figures, four in ten non-retirees do not think they are on track. Below $50,000, more than eight in ten do not.
The savings get spent before retirement arrives
A retirement account only works if the money stays in it. For a lot of workers, it does not. In the 12 months before the Fed survey, 14% of non-retirees borrowed from their retirement accounts, cashed them out, or cut their regular contributions. Among those who cashed out, only 24% said their retirement plan was on track.
That is what happens when the account is also the emergency fund. The same survey found 12% of all adults could not pay an unexpected $400 expense by any means. Only 55% had set aside three months of expenses in a rainy day fund. When the car breaks down or the hours get cut, the 401(k) is the money that is sitting there.
What a full-time job used to include
A job is supposed to pay for the years you work and set aside something for the years you cannot. The first half is already strained: rent, childcare, insurance and debt eat the paycheck. The second half has been converted from a benefit the employer provides into a chore the employee funds, and then made hardest to reach for the people earning the least.
That is not a personal budgeting failure. It is a design choice. When 15% of the lowest-paid workers are in a plan and 80% of the highest-paid are, the gap in retirement is not about discipline. It is about who the system was built to cover.
Work full time for forty years and you should be able to stop. For most people below the top of the pay scale, the numbers say that part of the deal is no longer in writing.
Sources: U.S. Bureau of Labor Statistics, Employee Benefits in the United States, March 2025 (released September 25, 2025), Table 1 and summary, bls.gov/news.release/ebs2.nr0.htm; Board of Governors of the Federal Reserve System, Economic Well-Being of U.S. Households in 2025 (May 2026), Savings and Investments section, federalreserve.gov.
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