According to a recent study from Finhabits, the states with the largest concentration of Hispanic residents had the lowest participation in retirement savings, and less than 10 percent of small business workers in the five top Hispanic metro areas of the United States have access to employer-sponsored retirement savings accounts.
The lowest overall participation rates (under 25 percent) exist in Texas, Arizona, New Mexico and Florida.
Carlos Garcia, founder and CEO of Finhabits, stated, “We have a retirement savings problem in the U.S. and the data clearly shows a wealth savings gap with Hispanics working at small businesses. Our analysis found a moderate and troubling correlation between retirement savings and the Hispanic population of a city. This will have a long-term impact on the quality of life and the economy.” Further, Garcia said there is a “…need to leverage technology to enable them to invest in their future easily even when they do not have access to 401ks.” He appealed for a more aggressive retirement education aimed at the Hispanic community.
Key findings of the study include:
• Connecticut is the best state for small business employee retirement savings—Finhabits found that 41.9 percent of small business employees in Connecticut had a retirement plan
• 401ks are not readily available for small business employees
• an average of 4% of companies with less than 100 employees offered a 401k in the five most Hispanic metro areas.
• in the least Hispanic areas, access was only 11%.
• Arizona, New Mexico, Florida, and Texas all have Hispanic population levels above 20 percent and are among the states where employees
• have less access to a plan through their employer
• are also least likely to be saving for retirement
• Significantly, the metro areas with the largest Hispanic populations average less than 1/3rd of employees saving for retirement compared to the five metro areas with the smallest Hispanic populations (11% vs. 35%).
• Cities with a higher Hispanic population have a lower number of employees saving for retirement creating an
Hispanic Retirement Savings Gap