Majority of Latinos lack retirement savings plans in the U.S.

Jan 23, 2014

A majority of Latinos have no retirement savings, according to a studyby the National Institute on Retirement Security, a nonprofit research group based in Washington.

Nearly 70 percent of Latino working-age households have no assets in a retirement account, and 62 percent of Latinos between the ages of 25 and 64 do not have employer-sponsored retirement plans. That is higher than the percentage of people in other major ethnic/racial groups. The percentage for whites was 37 percent.

About 38 percent of Latino employees ages 25-74 had a retirement plan through work, compared with 54 percent of blacks and Asian-Americans, and 62 percent of whites, the report said.

The dearth of retirement savings is rooted in myriad factors.

“Labor market and socioeconomic characteristics like education, skill, wage level, occupation, and industry clearly contribute to the overall racial gap in workplace retirement plan coverage,” the report said.

“That is, blacks, Asians, and in particular Latinos are less likely than whites to be employed in industries and occupations that provide high wages and workplace benefits, including retirement benefits.”

The mean savings rate of minorities who do have assets for retirement is far below that of whites, the report said. For Latino heads of household ages 25-64, the mean was $17,600. For blacks it was $20,132. For whites it was $111,749.

“Ultimately, the fact that the labor market is segmented by race, combined with the fact that some employers and jobs offer access to this critical benefit and others do not, puts workers of color at a significant disadvantage in accumulate resources for retirement.”

People who work in the private sector are less likely to have a retirement plan than those in the public sector, the report said. This may be another factor in why Latinos lag behind other groups in terms of having retirement assets. The U.S. Dept. of Labor says that more than 8 in 10 employed Latinos work in the private sector, not including the unincorporated self-employed. They are far less likely to work for government than are either whites or African Americans.

“With little to else to depend on besides Social Security when they eventually retire, people of color are especially vulnerable to economic hardship and reliance on public assistance in old age," the study found. "Addressing the lack of readiness among people of color is critical to solving the national retirement crisis.”

Source: Published originally on Fox News Latino as Seven Out Of Every 10 Latinos Lack Retirement Savings Plans In The U.S., Study Says by Elizabeth Llorente, December 12, 2013