NORTHBROOK, Ill.,–(HISPANIC PR WIRE – BUSINESS WIRE)–October 7, 2003–Hispanic Americans are looking forward to retirement, but they harbor no illusions that these years will be carefree.
According to the third annual Allstate “Retirement Reality Check” survey, Hispanics cited many of the concerns about retirement that were expressed by the general population surveyed — worry about illness, money and boredom. And they think they’ll have to work in retirement at some point, not just for the mental stimulation, but because they’ll need the money and health benefits.
Despite financial fears, Hispanics surveyed said they hope to retire at a relatively young age. Specifically, the Allstate survey showed that Hispanics, on average, plan to retire at age 60.1, compared with 61.9 for Caucasians and 58.6 for African Americans.
While 66 percent of Hispanics surveyed said they look forward to retirement, only 48 percent responded that they expect these to be the best years of their lives. That compares with 50 percent of Caucasians and 62 percent of African Americans surveyed.
“Retirement can be daunting for people regardless of ethnicity, especially if they have not planned adequately,” said Casey Sylla, president, Allstate Financial, a business unit of The Allstate Corporation. “If people take the time to plan what they want to do in retirement, it’s easier to understand how much they need to save to make it happen.”
Allstate’s annual “Retirement Reality Check” surveys Americans’ expectations and savings for retirement. For Hispanics, retirement means time for family (cited by 17 percent of respondents) and oneself (16 percent). For Caucasians, retirement is simply entering a new phase of life (21 percent), and for African Americans it signals rest and relaxation (25 percent).
The number one fear of Hispanics surveyed is getting sick, cited by 26 percent. Other concerns that Hispanics noted in the survey included:
— Rising health care costs, cited by 18 percent of respondents
— Not having enough money, 16 percent
— Being bored, 15 percent
— Not being able to live in my present home, 15 percent
Significantly, 16 percent of the Hispanics surveyed said they fear “feeling the world is passing you by.” Only five percent of Caucasians and 10 percent of African Americans said that.
On average, Hispanics surveyed expect they’ll need $3,104 a month for basic expenses. That puts them between Caucasians ($4,726) and African Americans ($2,787). That dovetails with U.S. Census figures that put the median household income for Hispanics at $33,565 in 2001, compared with $44,517 for Caucasians and $29,470 for African
Where retirement money will come from is a major issue to many Hispanic Americans.
A major source of post-retirement income will likely come from continuing to work in retirement. The majority of those surveyed said they expect they’ll work at some point after retirement–56 percent of Hispanics, 53 percent of African Americans and 61 percent of Caucasians.
All three groups agreed that non-financial issues, such as staying mentally active and enjoying social interaction, will be the main reasons they continue to work during retirement.
But Hispanics surveyed were more likely than other groups to say they’ll work for the health insurance benefits (41 percent, compared with 25 percent of African-Americans and 27 percent of Caucasians) and because they will need the income (30 percent, compared with 29 percent of African Americans and 23 percent of Caucasians).
The Allstate survey also showed some inconsistencies in how Hispanics approached retirement savings. While 25 percent of Hispanics surveyed said they are “on track” to meet their savings goal, 17 percent admitted they’ve never saved for retirement at all (compared with four percent of Caucasians and 10 percent of African Americans).
And while 64 percent of Hispanics responded that they feel confident making investment decisions, 65 percent also said choosing the right investments is challenging (compared with 50 percent of Caucasians and 60 percent of African Americans).
Perhaps not surprisingly, 32 percent responded that the very thought of retirement is overwhelming, compared with 36 percent of Caucasians and 43 percent of African Americans. And 39 percent said retirement is so far off they haven’t even thought about it, compared with 32 percent of Caucasians and 43 percent of African Americans.
Seeking professional financial help doesn’t appear to be common. Fully half of the Hispanics surveyed said they believe “financial institutions aren’t interested in having someone like me as a client.” Among African Americans surveyed, 49 percent felt that way, compared with 37 percent of Caucasians.
“Middle-income people too often feel—wrongly—that they’re on their own to learn about financial strategies,” Sylla said. “We believe a financial specialist can be particularly helpful for middle-income Americans to gain the confidence to act on their goals.”
Allstate created the third annual Allstate “Retirement Reality Check” survey in conjunction with Harris Interactive. Using a random digit dialing methodology, Harris Interactive polled 1,474 people born between 1946 and 1979, with household incomes of $35,000 and more. A sample of 190 African-Americans and 224 Hispanics were interviewed as part of the total sample surveyed. The margin of error is ±2.6 percent for the general population, ±7.1 percent for information specific to African-Americans and ±6.5 for information specific to Hispanics.
The Allstate Corporation (NYSE: ALL) is the nation’s largest publicly held personal lines insurer. Widely known through the “You’re In Good Hands With Allstate(R)” slogan, Allstate provides insurance products to more than 16 million households and has approximately 12,300 exclusive agents and financial specialists in the U.S. and Canada. Customers can access Allstate products and services through Allstate agents, or in select states at allstate.com and 1-800 Allstate(R). Encompass(SM) and Deerbrook(R) Insurance brand property and casualty products are sold exclusively through independent agents. Allstate Financial Group includes the businesses that provide life and supplemental insurance, retirement, banking and investment products through distribution channels that include Allstate agents, independent agents, financial institutions and broker-dealers.