Hispanics in the United States face an especially difficult challenge in maintaining their standard of living throughout their retirement. This is due to several factors. On average, Hispanics in the U.S. today have lower levels of educational attainment, less earning power, and a lower level of savings than non-Hispanics. Hispanics in the United States are less likely than non-Hispanics to have an employer-sponsored retirement plan, which puts them at a disadvantage for accumulating retirement income.
In addition, many Hispanics work in service jobs or small businesses that do not provide retirement plan options to their employees. Compounding these trends is the fact that many Hispanics in America today lack the financial literacy necessary for sound retirement planning; less than one-quarter of Hispanic workers have calculated how much money they will need to save for a comfortable retirement, compared to 42 percent of non-Hispanics.
Statistics indicate that Hispanics are likely to have a longer life expectancy than non-Hispanics therefore their retirement savings will need to last longer than many have predicted and thus may have a greater need for varied options to manage retirement assets. Social Security, employer-based retirement plans, and personal savings, represent the traditional three-legged stool of retirement savings for Americans. Given that Hispanics are less likely to participate in employer-based retirement plans, and given the lower income they can expect from Social Security, Hispanics must take an active role in developing their personal savings and investments in order to have a financially secure retirement. Yet, savings levels indicate that Hispanics are less prepared than their non-Hispanic counterparts, and that personal savings have actually decreased over the past few years.
View the Hispanic Institute study at the HS News Library on the challenges facing Hispanics as they prepare for their retirement and the opportunities for finding sound solutions to retirement planning.