More than 90 percent of small business workers in the five top Hispanic metro areas of the United States do not have access to employer-sponsored retirement savings accounts, according to the study published by Finhabits. The study found a significant ethnic gap. In addition, states with the largest concentration of Hispanic residents had the lowest participation in retirement savings. Arizona, Texas, Florida, and Illinois are among the stages with the lowest participation rate (under 25 percent) overall. The 2017 Latino Small Business Workers Lack Retirement Savings study takes a comprehensive bottoms up look at employer and employee retirement health in the U.S. small businesses segment, representing 37,563,000 full-time, private sector workers -1/3 of the U.S. workforce, and 5,486,000 businesses with fewer than 100 employees. Key Findings of the 2017 Latino Small Business Workers Lack Retirement Savings Study:
401(k)s are not readily available for small business employees – The study found in the five most Hispanic metro areas only an average of 4 percent of companies with less than 100 employees offered a 401(k). Even in the least Hispanic areas, access was only 11 percent.
Southern states are the worst for small business employee retirement savings – Arizona, New Mexico, Florida, and Texas all have Hispanic population levels above 20 percent and are among the states where employees, (1) have less access to a plan through their employer and (2) are also least likely to be saving for retirement.
Hispanic Retirement Savings Gap – The study found that cities with a higher Hispanic population have a lower number of employees saving for retirement. Tellingly, the metro areas with the largest Hispanic populations average less than one third of employees saving for retirement compared to the five metro areas with the smallest Hispanic populations (11 percent vs. 35 percent).
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.
Finhabits Advisors is an SEC-registered digital investment advisor that helps people develop the habit of investing for their future by combining fiduciary advice with behavioral nudges. For more information, visit Finhabits.com.
