During this Hispanic Heritage Month, how can you integrate cultural and social awareness into your practice to attract, retain, and effectively help Hispanic Americans as they navigate their retirement-savings plans?
During Hispanic Heritage Month, we celebrate the rich cultural contributions of Hispanic Americans, but it also presents a valuable opportunity to address critical financial-planning needs within this vibrant community. With Hispanic Americans representing a growing segment of the U.S. population and workforce, retirement planning tailored to their unique circumstances is more important than ever.
Data from the 2023 Latino Door Collaborative U.S. Latino GDP Report highlights the economic power of Hispanic Americans, who contribute $3.2 trillion to the nation’s GDP.1 But disparities in wealth and retirement readiness persist, underscoring the need for targeted financial strategies. Financial literacy and confidence for Hispanic Americans can start with your practice—and illuminate new opportunities for your book of business. Here are three ways to begin.
1. Address the Disparity Surrounding EmployerSponsored Retirement Plans
Despite increasing workforce participation, Hispanic workers are less likely to have access to employer-sponsored retirement plans.2 Data from the Center for Retirement Research at Boston College indicates that roughly only 30% of Hispanic workers are currently enrolled in an employersponsored plan, but it’s not for lack of interest. Of those who have access to these plans, three quarters of Hispanic workers take advantage of them.
Self-employment is a significant factor. Many Hispanic workers run their own businesses or do contract work, and data suggests that they are often more comfortable using alternative savings vehicles such as real estate. However, homeownership as a substitute for retirement planning can be risky; older Hispanic homeowners often struggle to leverage home equity due to limited nonhousing wealth or high housing costs.3
You can help those clients hedge these risks by educating them on plan options outside employer-sponsored plans and encouraging consistent contributions to savings vehicles such as IRAs or annuities.
2. Promote Protected Lifetime Income as a Retirement Asset
When it comes to protected lifetime income, many Hispanic Americans rely heavily on Social Security retirement benefits.2 The Social Security Administration estimates that these benefits account for the vast majority of retirement assets for about 40% of married Latino couples—nearly double the rate for non-Latino white couples.
For clients who have secured low costs of living, this may be sufficient, but it comes with considerable risk. There is little room for error, especially in the case of an emergency, and questions about the longevity of the Social Security retirement program could cause anxiety if a client doesn’t have an additional financial cushion. For those worried about having sufficient funds in retirement, protected income through an annuity could bridge any potential gaps, allow for tax control through deferred withdrawals, and provide longevity-risk protection through lifetime payments.
3. Enhance Financial Literacy and Education
Systemic barriers and misconceptions about financial planning can hinder retirement readiness. Recent immigrants especially tend to harbor mistrust toward traditional financial institutions, but this can create and exacerbate significant financial-education gaps.2 Additionally, the industry and legislative responses to Hispanic wealth disparities often center around adjusting individual behaviors within populations. These tactics rarely come with actionable policy changes that resolve the systemic barriers to wealth accumulation for Latinos.4
While tailored financial education programs that respect cultural values and language preferences are essential, it’s important for Hispanic clients to feel that you understand the issues that contribute to educational and savings gaps. With this in mind, your practice may find greater success in attracting and retaining Hispanic clients by providing a broader scope of context for potential challenges.
Conclusion
Retirement planning for Hispanic clients requires a thoughtful, culturally aware approach that addresses both systemic challenges and individual goals. A sensitive, nuanced approach is vital to making Hispanic clients feel heard, valued, and confident. During this Hispanic Heritage Month, you can enhance your business by integrating inclusive financial practices that honor and uplift this dynamic community. By leveraging these three opportunities, you can help empower Hispanic Americans to make educated choices and build secure and fulfilling retirements.
ACTIONS YOU CAN TAKE RIGHT NOW
- Identify Hispanic clients who may not be participating in employer-sponsored plans.
- Discuss potential savings vehicles to address these clients’ priorities.
- Start the conversation about protected lifetime income.
- Provide educational resources that address both individual and systemic perspectives.
For more information about retirement-planning, please contact our Retirement Strategies Group at RSG@PacificLife.com or (800) 722-2333, ext. 3939. PacificLife.com
This material is educational and intended for an audience with financial services knowledge.
No bank guarantee • Not a deposit • May lose value
Not FDIC/NCUA insured • Not insured by any federal government agency
Pacific Life, its affiliates, distributors, and respective representatives do not provide tax, accounting or legal advice. Any taxpayer should seek advice based on the taxpayer’s particular circumstances from an independent tax advisor or attorney
Pacific Life is a product provider. It is not a fiduciary and therefore does not give advice or make recommendations regarding insurance or investment products.
Unless otherwise noted, all aforementioned money managers, their distributors, and affiliates are unaffiliated with Pacific Life and Pacific Select Distributors, LLC.
Pacific Life refers to Pacific Life Insurance Company and its subsidiary Pacific Life & Annuity Company. Insurance products can be issued in all states, except New York, by Pacific Life Insurance Company and in all states by Pacific Life & Annuity Company. Product/material availability and features may vary by state. Each insurance company is solely responsible for the financial obligations accruing under the products it issues.
Variable insurance products are distributed by Pacific Select Distributors, LLC (member FINRA & SIPC), a subsidiary of Pacific Life Insurance Company and an affiliate of Pacific Life & Annuity Company.
The home office for Pacific Life & Annuity Company is located in Phoenix, Arizona. The home office for Pacific Life Insurance Company is located in Omaha, Nebraska.
No bank guarantee • Not a deposit • Not FDIC/NCUA insured • May lose value • Not insured by any federal government agency
For financial professional use only. Not for use with the public.