Hispanic Americans face greater challenges in obtaining a secure retirement than the U.S. population at large, according to a new report, Hispanics and Retirement: Challenges and Opportunities. Compared to other Americans, Hispanics are more likely to confront a low level of retirement preparation, low access to employer-sponsored retirement plans, low levels of personal savings and inadequate financial literacy, according to the not-for-profit Hispanic Institute and the Americans for Secure Retirement (ASR) coalition.
The report concludes that Hispanic Americans need to consider multiple retirement vehicles to supplement Social Security and to bridge the gap in access to employer plans. "While our research found that Hispanics face greater challenges in preparing for retirement than the average population, with the right tools to properly prepare for retirement, these obstacles can be overcome," says Gus West, board of directors’ chair for the Hispanic Institute.
Significant findings of the study include:
• Only 41 percent of U.S. Hispanic workers say they have saved money for retirement.
• Only 25.6 percent of Hispanics are covered by employer-sponsored retirement plans, compared to 42.5 percent of whites and 40 percent of African-Americans.
• Of the Hispanics receiving Social Security benefits, almost 80 percent rely on these benefits for at least 50 percent of their retirement earnings.
• Among Americans 65 and older receiving Social Security, on average Hispanics receive about $2,124 less in earnings than non-Hispanics.
The U.S. Hispanic population makes up about 48 million people; by 2050 that number will increase to 132 million, accounting for nearly 30 percent of the total U.S. population, according to the Hispanic Institute. Between 1979 and 1999, Hispanic households earning between $40,000 and $140,000 grew to include about one-third of the total Hispanic households nationwide.
"Since two-thirds of Hispanics are employed in the service-related field, which generally does not offer employer-sponsored retirement plans, many hard-working Hispanic Americans may not have the proper nest egg to retire. It is imperative that their savings are managed and invested in a secure plan that assures income for life," says Brent Wilkes, executive director of the League of United Latin American Citizens.
Employers can help Hispanic workers save for retirement by taking steps such as:
• Translating retirement and financial planning materials into Spanish.
• Conducting financial planning workshops and offering one-on-one counseling with bilingual advisers.
• Educating employees' family members and bringing them into the discussion.
• Showcasing success stories featuring Hispanic workers who saved for a comfortable retirement.
Health Care, Financial Challenges Remain Larger for Hispanic Workers, SHRM Online Benefits Discipline, August 2008
SHRM Online Benefits Discipline