Asian Americans tend to be more cautious and hands-on when it comes to managing their 401ks or other retirement savings, new research shows.
A recent study from MassMutual uncovers investment trends among the Asian American demographic, including heightened concerns about making bad financial decisions 15 years before or after retirement.
Nearly seven in 10 (69 percent) Asian American retirees or pre-retirees worry about taking too much risk compared to just 44 percent of other Americans.
Similarly, 67 percent of Asian Americans are afraid of making a poor investment decision, while only 54 percent of other retirees or pre-retirees say the same.
“While many Americans focus on being ready to retire, no other ethnic group that we’ve surveyed is as focused on their financial goals as Asian Americans,” Wonhong Lee, head of MassMutual’s Diverse Markets, said in a statement.
“And these findings are actually aligned with other studies we have conducted in the past, as the key driver for this community is to attain financial security in every key milestone in life, such as paying for their children’s education or retiring in comfort without being a burden to their children,” he added.
The fact that only 11 percent of Asian American retirees or pre-retirees say they have made early withdrawals, taken hardship loans or suspended contributions is a case in point. In contrast, a quarter of other Americans say they have engaged in those behaviors.
The survey, MassMutual Asian American Retirement Risk Study, also found:
- More Asian Americans than other Americans think those approaching retirement should reduce investments in equities (64 percent vs. 53 percent)
- More Asian Americans than other Americans are likely to have “conservative investment goals, aiming for their assets to ‘match the market’ (43 percent vs. 32 percent) rather than outperform the market (55 percent vs. 65 percent)”
- More Asian American retirees than other retirees enjoy managing their money (80 percent vs. 59 percent)
The clear desire to be involved in financial decisions lends itself to “room for Asian Americans to obtain more education about investing,” according to Lee, especially considering 53 percent are not confident about how many years they’ll spend in retirement. Meanwhile, only 36 percent of other Americans report as much.
“Moreover, fewer Asian American retirees (63 percent) are confident they know how to claim Social Security at the right time to maximize its benefits, than American retirees overall (75 percent),” according to the study.
Greenwald & Associates compiled the data on behalf of MassMutual in January. For study purposes, Asian Americans were defined as those who are of Chinese, Asian Indian and Korean descent.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
