The challenges of retirement for Latinas in the United States

Lupita Uribe at her home in San Francisco. At 29, she is planning for her mother to one day move in with her and her husband. (Photo: Jason Henry for The New York Times)

Before Lupita Uribe tied the knot in 2020, she told her husband-to-be that a wedding was not in his future unless he agreed to two promises she had made to himself. The first is that she wanted to continue living in San Francisco, the city where she grew up and where she works in internal communications for Twilio, a software development company. And the second is that her mother would eventually move in with her.

“I always say that I am my parents retirement plansaid Uribe, 29. As a Latina, she says that she knows that caring for older family members is part of her culture and is not a negotiable thing. But making that financially viable, something she’s working on, can present challenges.

Last year, the Institute for Women’s Policy Research found that, compared to all other racial, ethnic, and gender groups, Latinas won less. It is also more likely that are not bankedor who do not have a bank account, and who work in lower-paying jobs with no pensions or retirement savings plans, explained Judy Chapa, a financial educator who collaborated on the Latina Savings Project, a two-year study. That research was conducted with Mana, a Latina advocacy organization, and the Women’s Institute for a Secure Retirement, a nonprofit group.

Because Latinas are one of the longest-living demographic groups (Hispanic-American women can live to be 84, second only to Asian-American women who live to 87, according to the Centers for Disease Control and Prevention), the consequences of low wages and lack of access to savings opportunities in the workplace are multiple. The increased life expectancy becomes a challenge that translates into more financial burdens in old age, according to the Social Security Administration. Overall, 42 percent of women who receive Social Security benefits depend on it for more than half of their income, according to the administration.

Several issues contribute to the low collective wealth of Hispanic women, experts said. there is a significant pay gap between them and other demographic groups: They earn 57 cents on the dollar compared to white men, a larger gap than that faced by black and white women. Over a 40-year career, that breach costs them more than $1.2 million, said Jasmine Tucker, director of research at the National Women’s Law Center. Tucker says that gap is exacerbated by work breaks taken to care for children or elderly relatives.

In some households, traditional gender roles can make Latinas dependents of their spouses and that lessens their financial security, said Fernando Torres-Gil, director of the Center for Policy Research on Aging at the Luskin School of Public Policy at UCLA and a fellow at the Latino Policy & Politics Institute. “For many of them, the hope remains that the husband will give them a long and happy life,” he said.

Uribe’s parents immigrated from the western Mexican state of Jalisco when she was 6 years old. They divorced the year they arrived in California. Both had gone to university before emigrating, but did not revalidate their degrees, Uribe said, and ended up working in the service sector. Uribe’s mother worked as a private housekeeper, while her father worked for AAA for years and now owns and operates his own roadside assistance service in Sacramento. Although they remained debt free, neither has been able to accumulate much funds for retirement.

Uribe said that he understood why this had happened. “What my parents did was save money in their bank accounts, but that’s not what makes you wealthier,” he said. His mother, for example, “have no idea how a 401(k) plan works or a Roth IRA account, because he has never had the opportunity to meet him,” Uribe explained.

Uribe and her husband have an altar dedicated to their deceased relatives. She said that she would like, in time, to have a house big enough for her children and their mother.

Uribe said he didn’t know much about those investments until he started working at Twilio. “When I got a better paying job, I was able to think about my future instead of focusing on my immediate needs,” he said. “I felt that I had to be smart to generate wealth in the future”.

That experience led me last year to contact Valerie Rivera, a certified financial planner and founder of FirstGen Wealth in Chicago. Rivera knew immediately that she wanted to work with Uribe. “Often my clients are the first members of their families to be born in this country,” she said. “Many times they are the first to go to college or the first to earn more money than their parents.”

Torres-Gil said she was noticing that trend in her own work. “We’re seeing an increase in the proportion of Hispanics entering higher education“, said. “Most are women. And it doesn’t matter if they are first or second generation. They are acknowledging that they have to fend for themselves first, and they are much more likely to invest in or have access to 401(k) plans than previous generations”.

Most of Rivera’s clients are in their 30s and 40s and are college professionals. Some send money regularly to relatives in the countries where their parents come from. Many are like Uribe, who is planning how to start a family and save money for his own retirement while taking care of his parents.

Uribe said his goal is to buy a house big enough to raise children with his mother, a wish Rivera often hears. For Latinas, “our retirement is not just our retirement,” he said. “Culturally speaking, for the most part we don’t send our relatives to retirement homes. family stays with family”.

The commitment to care for elderly relatives it is a particular challenge for Latinas who are closer to retirement and have fewer resources. Azucena Guzmán, 46, owns Miriam’s Flower Shop in Brooklyn. She and her brother, who lives near her, share responsibility for housing and financial support for her 70-year-old mother. Guzmán’s mother has some health problems, such as diabetes and arthritis. She and she does not receive Social Security benefits because, until a few years ago, she was undocumented. But she still works for extra income. “She collects plastic bottles to get money,” Guzmán said. “Sometimes she calls her family in Mexico to have them send her something that she can sell here, like handmade bags.”

Guzman has no savings and he doesn’t expect to be able to start saving money for his own retirement anytime soon. Instead, his financial focus is paying off a $28,000 government loan that kept his business from closing permanently during the worst of the pandemic. The interest rate is low, he said, but with that obligation you have trouble thinking about retirement. She worries about paying for health care emergencies. “I don’t feel as good as when I was 20 years old,” she said. “But I need to do something for my mother and myself. That is my concern”.

Inspired by situations like Guzmán’s, Cindy Hounsell, president of the Women’s Institute for a Secure Retirement, initiated the Savings Project for Latinas in 2017. AARP helped fund the program, which offers financial literacy workshops and encourages low- and moderate-income Latinas to save and invest with as little as $20. According to Hounsell, the first few years of the workshops showed positive results: three quarters of the participants had the opportunity to open a savings account at a registered local credit union. Most successfully saved during the six-month period after enrollment.

Uribe works with a financial planner who specializes in serving clients who are first-generation Americans or the first in their families to attend college, and often both.

Despite the advances, Latinas can feel a bit lonely in the financial space. In his 15-year career in financial services, Rivera said he has met very few certified financial planners who are Latina. Before she started FirstGen Wealth, “in the big wealth management firms that she worked at, she was always the only one,” she said. “That’s a terrible thing.”

Because Latinas are still overrepresented in low-paying jobs, Torres-Gil is trying to impress on her 20-something students the importance of social programs aimed at lifting women out of poverty. “We have to reinforce to them the importance of keeping Social Security,” she said. “Because many know that it is important for the elderly, but they do not understand that they will also receive those checks in the future.”

The academic says it is encouraging to see the growing number of national groups working to improve the prospects of Hispanic women of all ages. Awareness movements aimed at exposing discrimination also give her hope: for example, Equal Pay Day for Latinas, sponsored by a consortium of advocacy groups to close the racial and gender pay gap, celebrate Thursday.

Uribe, for his part, said that he feels well rewarded for his work. Earlier this year, she received a bonus that made her think about investing the money or spending it to expand a family property in Mexico that her relatives use. She then went to Rivera for advice.

“We decided to invest it in the market,” said Uribe. “Since it’s so low, it made more sense to do it right now for long-term gain.”

© The New York Times 2022