Shaky prospects for future California retirees

Here's a story that keeps getting short-shrift because its effects won't be seen for another few years - and who has time to worry about what will happen in a few years? Make no mistake, though, this is a disaster waiting to happen. A majority of Californians will be relying mostly on Social Security for their retirement incomes because they don't have adequate savings from pensions or investments. From a report prepared by UC Berkeley's by the Center for Labor Research:

Nearly half of workers in the state are employed by firms that do not offer a retirement plan, and only 44% of workers actually participate in a plan. The retirement plan coverage gap is concentrated in the private sector and among small businesses, compared to high rates of coverage in the public sector and, to a lesser extent, among large firms employing over 1,000 workers. Significantly, most private sector workers who participate in a retirement plan through their employer only have access to a 401(k) type plan which does not guarantee retirement income.

The authors project that nearly half of all California workers (yes, they say half) will face "significant economic hardship in retirement, with incomes below 200% of the federal poverty threshold for individuals." In many ways, younger workers are worse off because companies have been cutting back on their retirement plans. Only 52 percent of California employers offer some sort of pension plan (lower than the nationwide level), and many of those plans are the defined-contribution variety, such as 401ks, which don't provide as many benefits as the traditional defined-benefit plans.