The retirement savings of immigrants in America

Retirement savings plans such as 401(k)s and individual retirement accounts (IRAs) are the primary tools Americans use to build wealth for their retirement years. However, the ability to access and contribute to these accounts—which also enjoy tax advantages—is not the same for the U.S.-born and foreign-born populations. The latest data from the Current Population Survey show that among the bottom 80 percent of earners, the share of foreign-born earners who own a defined contribution account is significantly lower than the share of the U.S.-born earners who do (Figure 1). However, these differences largely disappear among the highest-earning workers.

It also appears to matter whether foreign-born workers are U.S. citizens. Among other factors, a higher level of English and civic literacy among naturalized citizens could affect knowledge of more complex financial instruments.

Retirement itself is not a privilege shared equally by all. The census data reveal that in 2023, older U.S.-born workers retired at almost 1.5 times the rate of foreign-born citizens and almost three times the rate of noncitizen workers (Figure 2). Along with lower usage of private retirement accounts, some foreignborn workers might lack the work history or legal eligibility to make use of Social Security to the same extent U.S.-born workers can. The rate of out-migration and the age distribution may also differ among these groups, possibly contributing to retirement age variation.

This article is featured in the Spring 2025 issue of For All, the magazine of the Opportunity & Inclusive Growth Institute