Data and Research

Policy Proposals Could Help Hispanic Workers’ Retirement Outcomes

A report from the Urban Institute shows Hispanics face steeper retirement income challenges than other ethnic groups.

By Rebecca Moore | December 19, 2016
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Hispanics are among the fastest-growing population groups in the nation, nearly quadrupling between 1980 and 2014. Although the Hispanic population is relatively young, the number of Hispanics ages 65 and older will also surge in coming decades. Census Bureau projections indicate that the number of older Hispanics will more than triple over the next 25 years and will account for 15 percent of the older U.S. population by 2040.

A report from the Urban Institute finds many older Hispanics face steep financial challenges because of employment histories marked by low-earning jobs that do not generally offer retirement benefits.

Shortfalls in earnings and workplace retirement plans earlier in life likely account for much of the financial hardship that many older Hispanics face in retirement, especially those born outside the United States. In 2013, median earnings for men ages 25 to 64 employed full-time were 26% lower for U.S.-born Hispanics than non-Hispanic whites, and 47% lower for foreign-born Hispanics. The earnings shortfall for U.S.-born Hispanic women ages 25 to 64 working full-time, relative to non-Hispanic whites, was much smaller at 15%, but still substantial.

In addition, working Hispanics are much less likely than non-Hispanic whites and non-Hispanic blacks to be offered retirement plan coverage by an employer or to be enrolled in a plan. In 2014, only 32% of Hispanic men ages 25 to 64 employed full-time participated in an employer-sponsored retirement plan, compared with 54% of non-Hispanic white men and 47% of non-Hispanic black men. The comparable rates for women employed full-time were 38% for Hispanics, 57% for non-Hispanic whites, and 50% for non-Hispanic blacks.

However, the fact that Hispanics tend to work longer than other groups promotes their retirement security.

NEXT: Various policy options may improve Hispanics’ retirement security