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 fascinating 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 second of a two-part snapshot of Esri’s 401(k) data, we’ll look at 401(k) contributions. (In Part 1, we looked at data on areas where participation in a 401(k) plan is most — and least — likely.)
Geographic Distribution
The amounts people contribute to their retirement accounts vary tremendously. Obviously it is important for people to contribute as much as they can, but that varies with income level and personal situation. Who contributes the most? Who contributes the least? Where do they live?
People living along the Eastern Seaboard and the coast of California contribute the most to the retirement accounts. Residents in ZIP codes 22066 (Great Falls, VA), 10514 (Chappaqua, NY) and 60043 (Kenilworth, IL) have some of the highest contributors to retirement accounts. Residents of these ZIP codes contribute an average of $5,000 or more per year to retirement accounts.
Areas of Arizona, New Mexico and Kentucky have some of the lowest contribution rates.
Contribution Amounts
Residents of neighborhoods dominated by the “tapestry segment” Esri calls “Top Rung” contribute the most. These residents contribute $2,500 or more annually to their retirement accounts. Residents of tapestry segments dubbed “Boomburbs,” “Connoissuers,” “Exurbanites,” “Suburban Splendor,” “Wealthy Seaboard Suburbs” and “Urban Chic” also contribute a significant amount — residents of most of these neighborhoods, on average, contribute $2,000 or more annually to their retirement accounts.
Residents of “City Commons” and “Social Security Set” neighborhoods are among the lowest contributors to retirement accounts. Most residents, on average, contribute $500 or less annually. Many residents of Social Security Set neighborhoods are already retired, so they probably would not contribute. City Commons neighborhoods are primarily in large Southern and Midwestern metropolitan areas. Primarily in cities of large Southern and Midwestern metropolitan areas, residents of these neighborhoods are young, single or single parents, and most likely, unemployed, or work part-time.
More information about Esri’s data can be found here; more about Esri in general is here.
