The 50.5 million Hispanics living in the United States are becoming a target for banks. Only 10 percent have individual retirement accounts (IRAs); 24 percent have 401 (k) or thrift accounts.
By comparison, 35 percent of non-Hispanic whites have IRAs or Keoghs, and 45 percent have 401(k)s.
Experts say there are several reasons:
- immigration status
- lack of access to retirement plans
- reliance on families for support in retirement
- savings for family events such as weddings rather than retirement
- traditional savings programs such as “tandas.”
The also point out that lower income families with retirement funds borrow from those funds. Tax penalties for doing so are not great. Nearly one-third of Hispanics had outstanding loans against retirement accounts in 2007, compared to 20 percent of whites.
Even higher income Latino families had the least amount saved for retirement compared with black, whites and Asians.
Banks are educating Hispanics at the workplace about the value of savings. They are hiring more Latino staff and working with Hispanic community groups. This is good business for banks.