Black and Hispanic Americans Face Extra Retirement Planning Challenges

Family and Friends First

Hispanic Americans, regardless of income, were more likely to agree that it is more important to help friends and family now than to save for their own retirement. Nearly one-half of Hispanic Americans in the upper income group agreed, compared with only one-third of white Americans. Upper income Black Americans were also more likely to agree that family is more important. 

In addition, Hispanic Americans in each income group and Black Americans in the lower and upper income groups were likelier than white Americans to indicate that saving for a child's education or paying off a child's education reduces how much they can save for retirement. 

"Many Americans, but perhaps especially Black and Hispanic Americans, would benefit from increased assistance in balancing competing financial priorities, such as debt reduction, supporting family, and their own long-term savings," Lisa Greenwald, chief executive of Greenwald Research and co-author of the report, said in a statement.

Financial Advisors With Shared Experiences

Survey respondents across each income and racial or ethnic group cited two main criteria in considering or selecting a financial advisor to work with: an advisor's expertise with their specific financial goals and specialization in households with a similar amount of assets as most important. 

After that, significant differences across races or ethnicities on important criteria appeared. 

"Hispanic and Black Americans are more likely to say that criteria where some connection or commonality between them and the advisor exists is important," Craig Copeland, EBRI's senior research associate and co-author of the report, said in the statement. 

"This includes working with an advisor who has had a similar upbringing or life experiences as them, using an advisor who is affiliated with their employer in some way, accessing an advisor that has a similar racial/ethnic background to them, and collaborating with an advisor who is the same gender as them." 

Copeland said financial services firms could strengthen advisor-client relationships by developing a candidate pipeline to aid in hiring more Black and Hispanic workers in the industry.

Other Findings

Most Black and Hispanic workers in the survey expressed satisfaction with workplace plans. However, both group were likelier than white workers to say they would find one-on-one, personalized education a valuable improvement.

The report noted that many Americans are retiring earlier than expected, but the survey found that the reasons differ across ethnicities. White retirees said they could afford to retire earlier than planned most often, while Black and Hispanic retirees most often cited a health problem or disability as the main reason for leaving the workforce early.

Workers universally overestimate the likelihood of working for pay in retirement, according to the report. Indeed, the survey found that about three-quarters of workers across races/ethnicities expected to work in retirement, whereas only about 30% of retirees were doing so.