16 Feb Why Latinos Aren’t Saving for Retirement
Kerry Hannon – Contributor, Forbes
When it comes to retirement savings, Latinos are failing.
That’s what a new survey rolled out about a week ago by ING Retirement Research Institute reveals. In many ways, it echoes what has been laid out in previous minority retirement studies.
Bear with me now while I bury you with a lot of statistics. There is a method to my madness. I think these reports paint an ominous picture about cultural barriers to saving for retirement and will have far-reaching repercussions down the road. If you think we have a “retirement” crisis now, hold on to your hats.
Here are some of the ING report’s findings:
- While all populations found retirement planning to be an overwhelming task, Hispanics felt the least prepared. A hefty 54 percent say they felt “not very” or “not at all” prepared. This compares with 50 percent of African-Americans, 48 percent of white and 44 percent of Asian respondents who said they did not feel prepared.
- And 18 percent say they’re still on the sidelines and have not started saving for retirement.
- Hispanics reported the lowest average balances–$54,000–in their retirement plans, considerably less than the average balance across all groups –$69,000. In contrast, Asian respondents reported having the highest average plan balances –$81,000.
- A shocking 19 percent are contributing less than $50 of their pay check per pay period to their employer-sponsored retirement plan, compared to 13 percent overall.
- More than half are not currently saving for retirement in a savings vehicle outside of a current employer-sponsored retirement plan such as an IRA, Roth IRA, CD, etc., compared to 42 percent overall.
- The researchers found that 57 percent of Hispanics have never calculated how much money they’ll need to continue their current lifestyle, and 70 percent do not have a formal investment plan to reach their retirement goals.