Good News and Bad News: Latinos are Living Longer than Other Groups, But Latinos are Not Prepared for Retirement
Latinos, the fastest-growing multi-racial ethnic lot, are the least financially prepared of all groups when it comes to retirement, even though they have a longer life expectancy than Blacks and Whites; living until they're about 81 years old.
Four of five Hispanic households have less than $10,000 reserved for retirement savings, according to a report published by the National Institute on Retirement Security. That's compared to three-of-four households for Blacks, and one-of-two households for whites, who have more set aside for their futures.
Nari Rhee, manager of research at the National Institute on Retirement Security, has called this a national crisis, and believes "there are serious racial dimensions to this." Rhee has found that Latino workers tend to face two main obstacles when it comes to saving for retirement. For one, many Latinos are in low-wage jobs in the private sector, and the group is least likely to have access to retirement plans at work.
White employees lead with 62 percent having access to employers that sponsor retirement plans; and Black and Asian employees follow with 54 percent; while Latinos fall behind, only 38 percent having work-offered retirement plans.
"Without access to workplace retirement savings and with not a lot of other kinds of wealth, what's left really for most people is Social Security," Rhee says.
The reality of Latino lives is that a great number are living paycheck-to-paycheck. Saving for retirement is one of the most important financial goals, according to Capital Area Asset Builders' Joseph Leitmann-Santa Cruz; yet, many Latinos are unable to pursue this goal. Many families consist of single mothers who worry if that fraction of money could be put to better use, used to feed their children or help to pay a bill, rather than potentially support them in their older age. Leitmann-Santa Cruz suggested that Latinos learn to accept government handouts when needed, but more than that learn to specifically reserve funds for retirement.
"We need to get into the mentality of relying less on what can be provided by others and fully relying on what I can provide for myself," says Leitmann-Santa Cruz, who emigrated from Guatemala as a teenager.
Low-income, older individuals are becoming growingly aware of the necessity of retirement funds, and don't want to solely depend on their children when it's time for them to retire, even though they not may not have the resources to support themselves. For that reason, conversations between children and their aging parents about retirement can be difficult, according to Edna Becerra, who coordinates marketing and communications at the Mexican American Opportunity Foundation.
"It's a source of tension and a source of friction," says Becerra, 34, the eldest daughter of immigrants from Mexico. "My father, especially, is still very proud and says that he doesn't want to be a burden on anybody and refuses to toy with the idea of moving in with either my sister or myself."
Younger Latinos, like Becerra, are forced to not only prepare for their own retirements, but for their parents' retirements -- particularly because immigrant elders don't want to listen to financial advice.
"Not everybody tends to listen, but you hope that they do," she says. "And you do it with the understanding that if they don't prepare, you, at the end of the day, don't leave anybody behind."
The League of United Latin American Citizens has designed a plan for helping elder Latinos protect their children and families when it comes to retirement and social security. The site offers information about social security, including details regarding social security being fully funded through 2037, and the fact that they will still be able to pay out about 76 percent of promised benefits after this date, even if no changes to the program are made.