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‘Financial education and coaching must go hand in hand with workplace retirement plans’
Compared to other racial and ethnic groups, Latinos in California are the least likely to work for an employer that offers a retirement plan. So finds a May 2015 report by the Hispanic civil rights and advocacy group National Council of La Raza (NCLR).
The report, Enhancing Latino Retirement Readiness in California, reveals that:
• There are 3.8 million Latinos in California who lack access to a workplace retirement plan.
• Even among Latinos who have access to a plan at work, participation rates and savings are relatively low.
The findings suggest that Latinos will be disproportionately affected by the looming retirement savings shortfall among U.S. workers. Lack of savings could have national implications for workers and businesses across the country, given that California—where more than 39 percent of the population is Latino—is widely considered a harbinger of national demographic changes. By some estimates, Latinos are projected to account for 80 percent of the growth in the U.S. workforce between 2010 and 2050.
"If unaddressed, this lack of retirement savings among such a large segment of the population could eventually cause a drag on the national economy," NCLR warned.
“California’s makeup represents the future of America, making our state the ideal place to seek solutions to growing economic inequality,” added Delia de la Vara, vice president of NCLR California Region.
“Financial education and coaching must go hand in hand with workplace retirement plans,” said Maggie Cervantes, executive director of NEW Economics for Women, a nonprofit community development corporation and NCLR affiliate in Los Angeles. “It is vitally important that Latinos understand the importance of saving for their retirement as studies have shown that Latinos, especially Latinas, in California live longer than any other ethnic group.”
In addition to examining the barriers that prevent Latino workers from saving, the report offers recommendations to help Latinos nationwide better prepare for retirement. One of the recommendations is to support nonprofit community-based organizations that provide financial coaching to help underserved families set goals and build savings and credit.
Stephen Miller, CEBS, is an online editor/manager for SHRM. Follow him on Twitter @SHRMsmiller.
Related SHRM Articles:
Workers of Color Face 'Severe' Retirement Challenges, SHRM Online Diversity, December 2013
Hispanic Americans Face Higher Retirement Hurdles, SHRM Online Benefits, October 2009
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