Most Texans Don't Save Enough For Retirement Because They Don't Have Access To Plans
Most Texans don’t save enough money for retirement, according to a new study from the Austin-based Center for Public Policy Priorities.
The report focuses on full-time private-sector workers in Texas; only half are covered by a workplace retirement savings plan. Laura Rosen, the senior policy analyst for CPPP, says there are many reasons for the shortfall. A big one: Employers find it too "costly to provide workers with a retirement plan and face barriers to offering employees retirement at work," she said.
On why the numbers differ between regions: In the Dallas-Fort Worth area, 54 percent of workers have access to retirement plans at work, but in McAllen, it's only 23 percent. "Metro areas with lower access than the national average tend to have higher rates of workers that are least likely to have access to a plan, and those workers include workers working for small businesses, low-wage workers, and so the McAllen area has lower wages than the national average," Rosen said.
On those who have trouble setting up retirement plans: Along with low-wage workers, younger workers (under 45), workers with less education as well as Hispanic, black and Asian workers have lower rates of access to retirement plans. Rosen explains says the reasons vary for each group.
"For example, Hispanics, overall there is a younger age of Hispanic workers in the workforce, and the fact that Hispanics are disproportionately represented in low-wage jobs, which generally tend to have fewer benefits. In terms of younger workers, [they] tend to also when they're starting their careers; not be in jobs that are providing as many benefits."
On how much people should be saving for retirement: According to the report, the average private sector worker in Texas has just $32,000 saved in a retirement account. Rosen says many financial advisers recommend workers have 10 times they're desired yearly income.