I grew up in West Virginia in a family where "waste not, want not" was practically a religious tenet. It has taken me at least 50 years to get over the notion that leaving food on my plate isn't a sin. So I found the study that retirement services provider ING US released last week about differing multicultural financial concerns, especially as they relate to retirement, to be particularly interesting. Maybe I can learn something that isn't part of my admittedly narrow cultural experience.
ING discovered that regardless of their racial or cultural roots, people are likely to have some similar basic views on financial management and retirement planning. But they also have distinct differences. Fred Makonnen, vice president of multicultural sales for ING US, says those differences are likely to be of greater importance as the multicultural balance in the U.S. population shifts over the next 30 or 40 years. Currently, minorities represent 35 percent of the U.S. population, but by 2050, minorities will be the majority, encompassing 55 percent of the population.
ING surveyed 4,500 people with household incomes greater than $40,000, asking them about personal financial management and how they were preparing for retirement. Some 54 percent of Hispanics, 50 percent of African-Americans, 48 percent of whites and 44 percent of Asian respondents indicated that they don't feel prepared to retire. These feelings correlate with the amount each cultural group had on average saved in employer-sponsored retirement plans. Hispanic respondents reported having the lowest average balances -- $54,000 in their retirement plans. Asian respondents say they have the highest average plan balances -- $81,000. Whites and African-Americans were in the middle with $72,000 and $55,000 respectively.
African-Americans are saving in other ways -- 85 percent of African-American savers have life insurance, compared to 82 percent of whites, 81 percent of Hispanics and 76 percent of Asians. Of the 85 percent of African-Americans with life insurance, 71 percent see their policies as legacies to leave their children. That's in comparison to 51 percent of whites, 55 percent of Hispanics and 44 percent of Asians with life insurance who bought policies specifically as a way to leave an inheritance for their offspring.
On a long list of things other than retirement that people can be saving for, Hispanics were more likely than other ethnic groups to be saving to buy a house -- 14 percent -- or to send their children to college -- 11 percent. All other ethnic groups were significantly less focused on these two important priorities.
Makonnen says his company has launched a program to help small companies, those that are the most likely to be minority owned, help their employees prepare for retirement. ING has also made an effort to make its own workforce more ethnically diverse, including adding more people who speak Spanish. "These days, it's all about knowing your audience," Makonnen says.