The Hispanic community is facing a retirement crisis! Did you know approximately two-thirds of the people in this population are not saving for their later years?
Why?
Part is due to lack of resources, part is confusion surrounding retirement, part is misinformation from family and friends and part is lack of parental guidance. Their parents never invested so they didn’t have someone to show them how to invest. They’re simply learning for the first time what this means for the future.
According to a report by Morningstar, Hispanic adults with a college degree have an impressive 1.1 % point advantage over those without one when it comes to saving for retirement, making it a difference of only .3% higher than in white households.
The data shows that despite similarities across racial backgrounds there are still significant differences between certain generations and their financial preparedness levels.
Hispanics have a tendency to focus on low-yield assets, such as homes and vehicles. This trend can be seen in existing research that shows people start off with these types of investments before moving onto higher return ones like investment accounts.
This simply could be based on their direct needs focused.
In addition to the above, the lack of access to retirement plans is a pressing issue for Hispanics. Hispanic households are 17% less likely to have access than among white households.
WHAT CHANGES CAN BE MADE TO HELP FIX THIS?
Employers for one need to step up to the plate to help bridge the gap and help their employees have financial security.
They can offer a way to build an emergency savings fund, provide income equality and offer accessible retirement plans for all employees. Even small businesses need to ban together to offer their employees some type of retirement plan.
An emergency saving fund is particularly beneficial as it helps employees not dip into their savings account in case there is an emergency or in the event of a pandemic. Leaving money for their future retirement. Those who had emergency savings funds in place when the pandemic hit, were less likely to dip into their retirement savings.
In addition to access to retirement funds and saving plans, one needs to reprogram themselves to set aside a percentage of money each week and simply not touch it.
Having it automatically taken out of your paycheck weekly, helps set the precedence and secure your future. It will be a little hard in the beginning, but you will get used to it. Out of sight out of mind mentality. It’s hard I know but in the end it will be worth it.
With the way the economy has been going lately, it is crucial that everyone has or has access to some type of retirement plan to secure their future and that of their family for their golden years.
Still have questions, I am here to assist you in whatever your needs may be. Reach out today!