Fully half of Hispanic adults say they are “very worried” about having enough money for retirement, which is six points higher than the response from the general population, according to the 2023 Insurance Barometer Study conducted by LIMRA and Life Happens.
Hispanics are less likely than the general population to contribute to employer-sponsored defined contribution and defined benefit plan accounts and less likely to have individual retirement accounts (IRAs)—the three financial vehicles workers today typically use to save and fund their future retirement.
Just 34% of Hispanics reported they believe they are saving enough or have saved enough for retirement, which is also six points lower than the national average.
Hispanics are also less likely to believe they have done enough planning for retirement. Lack of saving and planning has a definite impact on people’s retirement confidence. Other LIMRA research shows people who save and plan for retirement are more likely (by at least 10 points) to feel confident in their retirement financial security than those who don’t.
To make up the difference, it appears many Hispanics plan to rely on their permanent life insurance. The study found Hispanics are more likely than any other group to say they plan to use life insurance to supplement their retirement income.
Research shows 42% of Hispanics who own permanent life insurance say the cash value will fund at least half of their retirement. This is 12 points higher than other market segments.
The study also revealed Hispanic adults generally seem to be more financially stressed in their day-to-day lives. Hispanics are more likely to worry than other market segments about their job security, paying their monthly bills (including rent/mortgage and credit card debt), managing financially should they become disabled and unable to work, or paying medical bills should they become sick. The research concluded that these heightened financial concerns seem to undermine their likelihood to take the steps to protect their loved ones’ and their own financial future.
The LIMRA research was released during National Hispanic Heritage Month, which runs through Oct. 15, and the financial services industry is taking the opportunity to shine a spotlight on retirement challenges facing Hispanics. A 2023 TIAA Institute report found that while 12% of workers halted retirement savings in 2022 due to inflation, this figure was 24% among Hispanic workers.
Another study by AARP showed that two-thirds of Hispanic American private-sector workers lack access to an employer-sponsored retirement plan, and research by the Economic Policy Institute estimates that only four out of 10 Latino workers have a retirement plan in their current roles.
SEE ALSO:
• Providing Financial Guidance During and After Hispanic Heritage Month
• Diverse Investors Lean on Financial Advice
• In-Plan Annuity Market Will Grow Exponentially Over Next 2 Years: LIMRA