Fostering Poder Económico
Poder económico is Spanish for “economic power,” a growing source of pride for the 55 million Latinos who live and work in the United States.
In 2015, Latinos generated more than $2 trillion or nearly 12 percent of America’s gross domestic product (GDP), according to a study by the Latino Donors Collaborative1, an association of Latino business, political and academic leaders. By 2020, the researchers estimate, Latinos will produce nearly a quarter of all U.S. GDP growth with more on the way as the burgeoning population of young Latinos joins the workforce. Poder de la juventud!
But research from MassMutual shows that many middle-income Latinos continue to face real financial challenges. Many say they could benefit from employer-sponsored retirement and financial educational programs as well as protection benefits as their wealth and financial power expands, according to the MassMutual Hispanic Middle American Financial Security Study2 (MassMutual Hispanic Study).
Latinos with annual household incomes of $35,000 to $150,000 say they feel less financially secure and worry more about money than other Americans, posing higher hurdles to planning for retirement and building wealth, the MassMutual Hispanic Study finds. Latino workers are less likely than others to have at least $5,000 set aside for emergencies and are more likely to struggle if they were out of work for one month or experienced unexpected events. Debt and bills/cost of living tie as the top issues that Latino households face.
When it comes to preparing for retirement, Hispanics feel they are falling behind and, more so than others, wish their employer did more to educate them about saving for retirement, the study shows. A big concern for Latinos is the well-being of their parents and their own personal health.
Advisors who support retirement plans can become a real source of assistance for Latinos and other Americans who face financial struggles in part by conducting workplace educational sessions about key financial challenges. Sessions about financial planning, budgeting, debt counseling and automatic bill paying are especially welcome, the study shows.
There is considerable interest among Latinos about tuition reimbursement and repaying college loans. And seven in 10 would welcome counseling about how to make the most of Social Security.
Many retirement plan and employee benefits providers also offer assistance in the form of educational specialists who can conduct workplace seminars and offer tools on a variety of financial topics, from retirement planning and saving to prioritizing benefits based on family needs and budget. At MassMutual, a growing number of our educational specialists speak Spanish, are Hispanic or both. It’s an important cultural consideration for Latino workers who were born outside of the U.S. and may not have the same level of trust in financial institutions as their American-born colleagues.
Helping Latino workers feel more comfortable about money is an important stepping stone along the path towards greater financial security or seguridad financier. As their financial power and influence expands, Latinos are sure to appreciate the help they’ve received from a financial advisor at the workplace.
Financial knowledge ultimately translates into financial power. For advisors and their Latino clients, it’s putting poder económico into practice.
E. Thomas Foster Jr. is head of strategic relationships for retirement plans for Massachusetts Mutual Life Insurance Co. (MassMutual).
1Latinos key to U.S. economic growth, study finds, CNN Money, http://money.cnn.com/2017/07/01/news/economy/latinos-u-s-economy/index.html
2MassMutual Hispanic Middle America Financial Security Study, https://www.massmutual.com/-/media/files/mm-hispanic-finances-study