No matter where you are in your career, a secure retirement should be one of the financial goals you are working toward. Unfortunately, many of America’s workers face barriers when trying to save — with minority groups and women facing the greatest barriers when it comes to retirement planning.
Here are seven facts about financial planning and saving for retirement, with some tips and tools everyone can use to achieve a financially secure future:
1. Black and Hispanic workers, and women, are more likely to experience financial insecurity during retirement
Research shows some of America’s workers are more likely to experience financial insecurity during retirement. Women age 65 or older are about 43% more likely than men to live on an income below the poverty level. And 17% of both Hispanics and Black Americans 65 or older live below the poverty line, compared with only 7% of whites and 11% of Asian Americans of the same age. Additionally, our analysis of Current Population Survey data shows older Black and Hispanic Americans rely on Social Security benefits to a greater degree than white and Asian Americans.
One recent study showed only about half of Hispanics have an employer that provides a retirement plan, compared with 75% percent of white workers. And when it comes to plan participation, Hispanic and Black Americans are both less likely to participate in retirement plans ‒ only 34% of Hispanic families and 44% of Black families participate in a plan, compared with 60% of white families. We also know only about 47% of working women participate in a retirement plan, for a variety of factors.
3. If your employer does offer a plan, take advantage of it
Employer-based plans are the easiest way to save for retirement. If your employer offers a plan, join as soon as you can and put in the maximum amount allowed. If you can’t afford the maximum, contribute as much as you can – try to contribute enough to maximize any employer matching funds. That’s free money! For more tips, check out our publication “What You Should Know About Your Retirement Plan,” also available in Spanish.
4. There are many ways to save for retirement
If your employer doesn’t offer a plan, there are other ways to save. For example, you can open an IRA account, or even start your own savings plan if you’re self-employed. Explore your options in our Savings Fitness guide (also available in Spanish).
5. Financial planning can help you figure how much you can save
Setting up a budget can help you see what money you have coming in, and where it is going. Our Savings Fitness guide also offers helpful tips for setting up a budget, managing debt, determining a saving rate for retirement, and more.
6. If you’re close to retirement, you can catch-up on your contributions
Workers age 55 and older can make extra contributions to their employer-based plan or IRA account. If you’re about 10 years from retirement, take a look at “Taking the Mystery Out of Retirement Planning” for how to maximize this time (also available in Spanish).
7. It’s never too late to start saving for retirement
Whether you are 18 or 58, you can take steps toward a better, more secure future. Check out all our resources on planning for retirement and meeting your savings goals to get started today. And if you have questions about your workplace benefits, our benefits advisors are ready to help! Call 1-866-444-3272 or contact us online.
Ali Khawar is the acting assistant secretary for the Employee Benefits Security Administration.