Although Americans of all backgrounds encounter similar barriers to saving and planning, cultural differences account for disparate experiences among groups, according to a study released Thursday by ING Retirement Research Institute.
The study reported that all populations found retirement planning to be a daunting task. However, Hispanics felt the least prepared, with 54% saying they felt "not very" or "not at all" prepared. This compares with 50% of African-Americans, 48% of white and 44% of Asian respondents who said they did not feel prepared.
These results correspond with the amount saved in employer-sponsored retirement plans, with Hispanic respondents reporting the lowest average balances ($54,000) in their retirement plans, considerably less than the average balance across all groups ($69,000). In contrast, Asian respondents reported having the highest average plan balances ($81,000).
Findings for the "Retirement Revealed" study came from an online survey conducted last October by ORC International. Respondents were 4,050 adults (including 500 African-Americans, 500 Hispanics and 350 Asians) between the ages of 25 and 69 who were employed full-time with annual household income of $40,000 or more.
Other key findings:
Financial Information
- Nonwhites were more likely than whites to get their investment information and guidance from the Internet and media: 54% of African-Americans, 53% of Asians and 50% of Hispanics vs. 45% of white respondents.
- Whites were more likely to use a financial professional.
- While 28% of overall respondents were currently working with a financial professional, only 75% of this group said their advisor looked at their complete financial picture.
- Face-to-face communication with a financial professional ranked highest in terms of value provided in getting information about their retirement plan and other employee benefits.
Planning Goals
- Fifty-seven percent of Hispanic respondents said they had never calculated how much money they would need to continue their current lifestyle upon retirement.
- Seventy percent of Hispanics did not have a formal investment plan to reach those goals.
- Twenty-nine percent of respondents overall had a formal investment plan, with African-Americans most likely to have one (32%) and whites least likely (28%).
Barriers to Saving
Seventy-three percent of respondents admitted to having barriers to saving. African-Americans said debt was their biggest barrier. Needing to know more about their savings options was a greater barrier to savings for Hispanics than for any other group.
