Half of Hispanic Adults Not Prepared for Retirement, LIMRA Reports
Financial institutions have an opportunity to design solutions tailored to the needs of a huge potential audience of Latino workers.
Half of Hispanic adults (50%) reported being very worried about having enough money for retirement, six percentage points higher than the response from the general population, according to LIMRA’s 2023 Insurance Barometer Study, but the owner of a Hispanic-run financial wellness platform says focused engagement with the Latino audience can help.
“Talking about retirement money at the dinner table is not something that Hispanic families tend to do,” Carlos Garcia, founder and CEO at Finhabits, created by Latinos to help Latinos build, grow and protect wealth, said in an emailed response. “They also lack access to wealth advisers and are not as likely to build the habit of saving for retirement on their own. So part of their worry can be attributed to just a lack of knowledge about how the system works.”
LIMRA found that 34% of Hispanics believe they have saved enough for retirement, six points lower than the national average. They are also less likely to believe they have done enough planning for retirement. To help Hispanic workers feel more confident and save more, the workplace retirement plan industry can start demystifying the money conversation, Garcia says.
“There needs to be education at the basic and intermediate level in the workplace,” he recommends. “Translating a website to Spanish is not enough to build a relationship with a Hispanic worker. There needs to be a continuous engagement that encourages financial habits.”
Approaching 70 million people, or nearly 20% of the U.S. population, Latinos present a significant opportunity for every sector, according to Finhabits’ 2023 “Power in Numbers” report. Yet efforts to capitalize on the wealth potential of this segment, which by the firm’s estimates will grow to $113 trillion by 2050, have so far fallen short.
“Yes, more Spanish-language businesses are offering retirement plans,” Garcia says. “There are 5 million Hispanic-owned businesses in the U.S. The numbers don’t lie. But the traditional financial institutions need to better understand the needs of this population and design solutions that resonate with Latinos in order to grow their own businesses for the long-term.”
The Finhabits report urged financial institutions to recognize the potential of the Latino wealth opportunity and build new offerings that address the long-term needs of this audience. Responding to this need, the firm has created a 401(k) plan to help Latino business owners provide retirement savings to their workers.
“Hispanics understand how to deal with the day-to-day money questions,” Garcia says, “but they need to understand how to deal with the long-term money questions as well.”
The Power in Numbers report analyzed the aggregated saving and investing approaches of 90,000 Finhabits customers, as of September 2023, who are indicative of the wealth generation of Hispanics.