Latinos are facing a deeper retirement crisis than other ethnic groups because of lower access to workplace savings plans and other job-related disadvantages in accumulating nest eggs, reports the National Institute on Retirement Security and UnidosUS in a new study.
“Retirement plan participation rate for Latino workers (30.9 percent) is about 22.1 percentage points lower than participation rate of White workers (53% percent), because Latinos face higher access and eligibility hurdles,” the researchers from NIRS and UnidosUS find. Unidos was formerly known as the National Council of La Raza.
In 2014, 53.7 percent of Latinos 21 to 65 who worked for an employer that sponsored a retirement plan compared to 69.8 percent of all workers.
Even when they are working for an employer with a workplace retirement savings plan, Latinos are hurt because they frequently don't meet the eligibility requirements.
Among Latinos with access to a retirement plan, only 60.3 percent satisfy the eligibility requirements versus 72.9 percent for all workers with access.
At the same time, Latino employees who are in workplace retirement plans have about one-third less savings on average than their White workers.
The study warns Latino women are particularly hard hit economically when they reach age 65.
“Without income from work, Latinas age 65 and older would not be able to afford basic expenses. Older Latinas also face poverty rates three times higher than older White women,” the study says.
Smaller than national average incomes also harm Latinos in preparing for their post-workforce future.
“Workers earning low wages and struggling to make ends meet may very well find it difficult to set aside a portion of their income to save for retirement,” the report warns.
The study points out Latinos typically get a late start in saving for retirement.
The majority of Latinos who have access to a workplace retirement plan don't achieve the benefit until age 45.
By 2060, the number of Latinos 65 and over in the U.S. is expected to reach 21.5 million.
Currently, at 57.5 people, Latinos make up 17.8 percent of the nation's population.
Source: Published originally on forbes.com, Latinos Facing Deeper Retirement Security Crisis Than Other Ethnic Groups, by Ted Knutson, December 3rd, 2018.