The Latino Community Needs to Make Some Serious Money Moves to Age Well

Belatina Money Moves

Paraphrasing the words of media mogul Nely Galán, stop spending on shoes and start investing in real estate. A penny saved is a penny earned, but sadly, saving for the future isn’t on most Latinos’ bucket lists, though it should be. It’s urgent that Latinos start investing in their retirement at an early age so that they can enjoy financial stability during their golden years. This is especially important because Latinos tend to live longer than the rest of the population.  

Latinas in the United States, for example, can expect to live a long life. According to the Centers for Disease Control and Prevention, at 84 years of age, a Latina’s life expectancy is second only to an Asian American woman’s at 85.8 years. Hispanic males on the other hand don’t have the longevity of their female counterparts. Their average age of life is 79.2 years of age. Non-Hispanic white males live an average to 76.5 years old, white women to 81.1 years, Non-Hispanic black males to 72 years, and Non-Hispanic black women to 78.1 years.

Latinos Live Long, But They Don’t Save Long

While living a long life can be a great thing, if you’re not healthy, the last 20 years of your life without any money saved can leave you feeling isolated and desperate. There’s a lot that is making the seemingly simple act of saving up for a rainy day nearly impossible for most Latinos. It’s both financial and cultural setbacks that are affecting this large and aging community. According to the Census, Latinos are the nation’s largest minority group at 18 percent. The population of Latinos ages 65 or older is expected to surge by 224 percent, compared to a 65 percent increase for non-Latino whites, according to the Administration on Aging. 

How many of those aging Latinos will have saved for retirement? If the trend continues, it will be a very low percentage. In 2018 UnidosUS reported that only 31 percent of Latino workers participate in an employer-sponsored retirement plan, compared to 48 percent of all other workers between the ages of 21 to 64. To begin to understand these figures, one must take into account that it is common for part-time or low-income workers not to have access to employer-sponsored retirement accounts like 401Ks; it’s simply not an option. On top of that, since 20 percent of Latino workers are earning poverty-level wages, they live for the now and not for their future. 

The Cultural Pros and Cons of Latinos and Saving

As far as Latinas have come in breaking down barriers, from going to university and becoming business owners, a larger number still experience severe disparities in pay equity. While some may point to discrimination as the reason for this, it may also be the fact that many Latinas are more likely to take lower-waged jobs that are flexible so that they can take care of their family, because this deeply matters to them. So, far too many Latinas with strong family values don’t end up saving.

It’s a cultural fact that the majority of Latinas tend to enjoy taking care of others and because of this, may not look out for themselves and their future as much. And this equates to spending on the ones they love as well, not thinking of their own future’s nest egg. It’s not only their children, but the elderly they like to watch over too. PBS reported that Hispanics are more likely to consider caring for an elderly relative or friend to be a positive experience, and less likely to say it creates stress in their families. More than nine in 10 Hispanics over age 40 reflected positively on their personal experiences in providing assistance to loved ones, according to a poll released by NORC Center for Public Affairs Research. While this speaks beautifully to how important intergenerational bonds are for Latino culture, we as Latinas have to start teaching each other that if we don´t take care of ourselves first, financially, health wise, and emotionally, how will we take care of others?

Start a Side Hustle, ‘Cause We Can’t Just Rely on Social Security

According to the League of United American Citizens, Latinas in the United States rely heavily on Social Security for their retirement income. They reported that 25 percent of Latinas over the age of 65 live in poverty, and without Social Security (should it ever become privatized), the number would jump to 60 percent. Social Security is the sole source of income for 40 percent of unmarried Latinas, and 81 percent of unmarried Latinas depend on it for most of their retirement income, LULAC reported.

A crucial step to combat aging without resources is educating Latinas to be financially literate and to know their other options out there from an early age. Whether it’s starting side businesses or buying their homes, being part of the workforce must equate to investing and saving their money in something other than their social security. 

Our politicians should work on expanding worker savings plans so that Latinos with part-time and low-wage work can participate in employer-sponsored retirement plans. CNBC reported that when Latinos enroll in employer-sponsored plans, their participation rate is 95.4 percent. It’s clear then that when Latinos are given the opportunity to save for retirement they jump on it.

In addition, there should be further development of state-sponsored retirement plans for private sector workers that automatically enroll individuals into a plan if they are not covered by an employer-sponsored plan. Programs such Illinois’ Secure Choice, which launched in 2018, is available to anyone who wants to enroll on their own and start saving. 

With My Mind on My Money… and on My Health

Work, create, invest, save, and keep on hustling. But most importantly, take care of your health as well. As Latinos age they tend to have higher rates of diabetes and Alzheimer’s than the rest of the population. Aside from money, aging well requires a commitment to exercising, a healthy diet, and a support system of good amigos and familia. The Latino community is also known for their workaholic tendencies. But we must manage our Superwoman and Superman stress levels better, finding time to slow down and relax so that we get enough sleep and get up the next day and do it all over again. Hopefully with a smile and a little money saved.