You may be focused on retiring in Florida, but that doesn’t mean that if you work there, you’ll be ready to.
A report from the Pew Charitable Trusts, “Who’s In, Who’s Out: A Look at Access to Employer-Based Retirement Plans and Participation in the States,” analyzed how well employers in each state — and in different regions of the country — do at providing retirement plans for their employees, and how well employees do at participating in them.
You might be surprised at what they found.
In Florida, for instance, long regarded as the retirement haven, both employers and employees do poorly; in fact, the state finished at the absolute bottom of the country, both in the percentage of its employers providing retirement plans to their employees and the percentage of employees who participate in plans.
Pew found that a major factor in how well employees are prepared for retirement isn’t just how much people save, or where they choose to retire.
It’s whether they have access to an employer-sponsored retirement plan in the first place.
Last week we looked at the 10 states where employers did the best at providing retirement plans, and employees participated at the highest rates.
If you don’t mind some gloom, here’s a look at the 10 states with the worst percentage of employer-provided plans and the lowest rate of participation.
As mentioned above, Florida has the worst record of employers providing retirement plans — at just 46 percent — and it does even worse at employee participation, at 38 percent.
As they say in all the lottery commercials, you’ve got to be in it to win it — and most of Florida’s employees aren’t even in the game.
Of course, a lot can depend on how much people make; Pew also found that, across the country, only 32 percent of workers with wage and salary incomes of less than $25,000 have access to a retirement plan at the workplace.
It’s not altogether surprising that people trying to get by on so little find it hard to sock any of it away; just 20 percent of those in the lower-income group, according to Pew, participate in a plan, compared with 72 percent of more affluent workers.
While 51 percent of Nevada’s employers provide retirement plans, only 39 percent of employees manage to take advantage of such a plan.
The low participation rate is made more interesting, if more depressing, by the fact that it has the lowest take-up rate in the country.
The take-up rate, said Pew, is “the percentage of workers who reported having access to a workplace retirement plan and were participating in that plan.”
Nevada’s is just 76 percent; compare that with Indiana, where 90 percent of those offered a plan manage to participate in that plan.
Not surprisingly, Indiana finished in the top 10, not the bottom.
3. New Mexico
Only 49 percent of New Mexico’s employers provide a plan, and just 41 percent of employees participate in one.
Part of the low rate could be due to the fact that the state has the third largest number of employees working for small companies (those with fewer than 50 employees).
Smaller firms are less likely to offer retirement plans to their employees — and employees in Western states are more likely to work in small firms.
New Mexico also has the largest number of Hispanic workers, whose access to a retirement plan runs 25 percentage points behind that of white non-Hispanic workers.
Another state with low plan offerings — just 52 percent of employers provide plans, and only 41 percent of employees participate in a plan — Arizona has the fourth largest concentration of Hispanic workers in the country.
In addition, it — along with New Mexico — is in the top 10 states with the highest percentage of employees in the leisure and hospitality industry, which does a pretty poor job of providing its employees with retirement benefits.
An even 50 percent of Texas employers offer a retirement plan, but that leaves half Texas’s employees without one.
And only 42 percent of Texas workers participate in a plan.
Then there’s the issue of poor access to plans for Hispanics.