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Press Release: New Study Reveals Significant Challenges Hispanic Americans Face in Preparing for Retirement.
October 8, 2009
Contact: Ana Williams: (202) 777-3518, awilliams@clsdc.com
Elliott Bundy: (202) 777-3562, ebundy@clsdc.com
WASHINGTON, DC – A new report released today demonstrates that Hispanic
Americans face greater challenges in obtaining a secure retirement than the
average population. The paper, prepared by the Hispanic Institute think-tank
and the Americans for Secure Retirement (ASR) coalition, finds that the
unique challenges include a general lack of retirement preparation, less
access to employer-sponsored retirement plans, lower levels of personal
savings and inadequate financial literacy.
The report concludes that Hispanic Americans need to consider multiple
retirement vehicles to supplement Social Security and to bridge the gap in
access to employer plans. Options such as lifetime annuities can minimize
financial risks and provide the means to both build retirement savings and
secure guaranteed income that will last as long as they live. Access to such
a source of guaranteed lifetime income to supplement Social Security is a
critical part of planning for a secure retirement.
“While our research found that Hispanics face greater challenges in
preparing for retirement than the average population, with the right tools
to properly prepare for retirement, these obstacles can be overcome,” said
Gus West, Board of Directors Chair for Hispanic Institute.
Significant findings of the study include:
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Only 41 percent of Hispanic workers say they have saved money for
retirement.
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Only 25.6 percent of Hispanics are covered by employer-sponsored retirement
plans, compared to 42.5 percent of whites and 40 percent of
African-Americans.
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Of the Hispanics receiving Social Security benefits, almost 80 percent rely
on these benefits for at least 50 percent of their retirement earnings.
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Among people 65 and older receiving Social Security, on average Hispanics
receive about $2,124 less in earnings than non-Hispanics.
Between 1979 and
1999, middle-class Hispanics households increased nearly 80 percent. In the
same period, the group of Hispanic households earnings between $40,000 to
$140,000 grew to include about one-third of the total Hispanic households
nationwide.
Today, the U.S. Hispanic population makes up about 48 million people; by
2050 that number will increase to 132 million, accounting for nearly 30
percent of the total U.S. population. Due to the growing Hispanic
population, an average longer life expectancy, and because only 16 percent
of the population is in their pre-retirement years, Hispanics will make up a
significant number of those entering retirement in the future.
“Since two-thirds of Hispanics are employed in the service-related field,
which generally does not offer employer-sponsored retirement plans, many
hard working Hispanic Americans may not have the proper nest egg to retire.
It is imperative that their savings are managed and invested in a secure
plan that assures income for life,” said Brent Wilkes, Executive Director of
League of United Latin American Citizens.
Legislation currently being considered in Congress would create tax
advantages for the purchase of an annuity and the conversion of a portion of
an individual’s savings into a lifetime retirement income stream. The
Retirement Security Needs Lifetime Pay Act, H.R. 2748, in the U.S. House and
the Retirement Security for Life Act, S. 1297, in the U.S. Senate, would
create a tax exclude from taxes a portion of the annual income received
through an annuity, increasing accessibility to lifetime annuities as a
retirement option and creating significant tax savings for middle-income
Americans.
“Congress needs to pass this legislation to encourage the greatest
accessibility possibility to multiple retirement savings vehicles that
tackle the income side of the retirement problem,” said Bill Waldie,
Chairman of ASR.
The Hispanic Institute nonprofit organization formed in 2005 to provide an
effective education forum for an informed and empowered Hispanic America.
Americans for Secure Retirement is a broad-based coalition of more than 50
organizations who are united in their commitment to raise awareness of the
retirement challenge facing all Americans.
To view the complete Hispanic and Retirement: Challenges and Opportunities
report, please visit
www.paycheckforlife.org.
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