Less than 10 percent of small business employees in the largest Hispanic metro areas have access to an employer-provided retirement plan.
SmallBizTrends reports that a new study from Finhabits finds that among small businesses located in the top five Hispanic metro areas of the U.S., an average of just 4 percent of small businesses with fewer than 100 employees offered their workers a 401(k).
The 2017 Latino Small Business Workers Lack Retirement Savings study found a significant ethnic gap in retirement savings.
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The states with the largest concentration of Hispanic residents—Arizona, Florida, New Mexico and Texas—come out the worst in the study for small business employee retirement savings.
Small business employees within these states have less access to a retirement plan through their employer.
On the other hand, Connecticut comes out the best in the study, with 41.9 percent of small business employees having a retirement plan in place; that makes the Nutmeg State the best state for small business employee retirement savings.
"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," the report quotes Carlos Garcia, founder and CEO of Finhabits, saying in a statement.
Garcia adds, "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."
The research highlights the importance of small businesses offering a retirement plan to their employees, the report says, adding that small businesses that do provide their employees with an employer-sponsored retirement plan can differentiate themselves from competitors.
This can boost both recruiting and employee retention, since workers in search of security at a company that shows it values its employees could be more inclined to choose a company providing retirement benefits over competitors that do not.
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