Esri, a pioneer in geospatial analysis based in Redlands, CA, has applied its “tapestry segmentation” approach (which classifies all U.S. neighborhoods into 65 segments based on their socioeconomic and demographic characteristics) to 401(k) participation and contribution data. The result is a novel look (authored by Pam Phillips at the “SmartBlog on Finance” from the folks at SmartBrief) at where the areas of highest participation and contributions lie, on a specific level and a generalized one.
In this first of a two-part snapshot of Esri’s 401(k) data, we’ll look at areas where participation in a 401(k) plan is most — and least — likely.
Geography
According to the Esri analysis, the ZIP codes of residents with the highest likelihood of having a 401(k) account include 19373 (Thornton, PA), 08535 (Millstone, NJ), 48374 (Novi, MI) and 99516 (Anchorage, AK). Each of these ZIP codes has a “market potential index” number of 173, meaning that a resident in these ZIP codes is at least 1.73 times more likely than the average American to have a 401(k) account.
Most Likely to Have a 401(k)
What type of person is most likely to have a 401(k) account? Based on Esri's “tapestry segmentation” system, the segments with the highest likelihood of having a 401(k) account are what they call:
• Boomburbs. These communities are home to busy, affluent families with young children who live an upscale lifestyle.
• Exurbanites. Open areas define the Exurbanitess affluent neighborhoods of empty nesters and married couples with children.
• Sophisticated Squires. These are educated, married couple families hold good-paying jobs and are willing to commute longer distances to maintain a semi-rural lifestyle.
• Suburban Splendor. These neighborhoods mostly include two-income, married-couple families with or without children. They are well-educated and have good jobs.
Residents of these tapestry neighborhoods are all very wealthy, and are at least 1.5 times more likely than the average American to have a 401(k) account.
Least Likely to Have a 401(k)
The tapestry segments with the least likelihood of having a 401(k) account are, in Esri’s lingo, City Dimensions, The Elders, Home Town, Industrious Urban Fringe, Las Casas, Metro City Edge, Modest Income Homes, NeWest Residents and Rural Bypasses. Residents in these neighborhoods have an index of 50 or less — meaning they are half as likely as the average American to have a 401(k) account.
In tomorrow’s Part 2, we’ll look at Esri’s heat map data on 401(k) contributions.
More information about Esri’s data can be found here; more about Esri in general is here.
