Hispanic Households and Financial Services Segment Summary May 2015
Source: 2014–15 MacroMonitor
Hispanic households are the fastest-growing segment of the US population. The Pew Research Center estimates that by 2050, the Hispanic population will have increased to 14% of the US total. Historically, the majority are immigrants. Pew explains that US government estimates "consistently underestimate actual population growth" because the actual numbers of immigrants—and their rate of immigration—assume "constant or even decreasing numbers of immigrants." Illegal immigration adds an additional level of complexity to population-growth estimates because of the issue's political divisiveness; thus far, Congress has been unable to pass legislation that might curb immigration. Along with bringing hope for a brighter future, Hispanic immigrants bring their cultural differences, financial expectations, and attitudes—in particular, attitudes about financial services—with them.
The 2014–15 MacroMonitor contains data representative of just over 20 million households that have Hispanic members.
Young and traditionally male-headed Hispanic households differ from all US households. For example:
- The average age of the household head is 44, in comparison with 51 for all households.
- Household heads are more likely than all US households to be male (73%).
- Household heads are more likely than all US households to work for pay (78%); only one in ten are retired.
- The median Hispanic household income is $42K; it is $48K for all US households.
- Fewer than half have a post-high-school education, in comparison with three in five for all US household heads.
- The households are more likely than all US households to support dependent children (47% versus 33%) and to have adult children return home (16% versus 11%).
Very few financially secure Hispanic households emigrate. Most immigrants are willing to work hard to achieve financial security for their family. Living in the United States can be more expensive than they anticipated and permanent work more difficult to secure. Because many immigrants come from countries where financial institutions are scarce or unreliable and a limited number of financial products and services are available, navigating a robust and complex financial-services landscape in the United States is a challenge.
- Hispanic households' assets are lower than for all US households.
- Mean total liabilities are essentially the same for Hispanic-headed households as for all US households: $87.6K versus $86.9K.
- The mean net worth for Hispanic-headed households is about half that for all US households ($187.6K versus $386.5K).
- Average retirement savings for Hispanic-headed households is less than for all US households ($119K versus $212K).
- Ownership of IRAs and SEPs among Hispanic households is lower than that for all US households; ownership of 401ks is comparable.
- Hispanic households owe somewhat more on their homes than do all households (first mortgages ($152.5K versus $146.5K), but the mean value of their primary home is somewhat less than that of all US households ($229K versus $238K).
- Hispanic households are less likely than all US households to have their legal affairs in order; roughly half (47%) do not have a will, power of attorney, or an executor for their estate, in comparison with one-third of all US households.
Financial Attitudes and Interesting Tidbits
Trust in financial institutions is slightly lower among Hispanics than for all US households. The gap in trust for banks and credit unions is notable; 24% of Hispanic heads trust banks a great deal, in comparison with 33% of all US households; 29% trust credit unions a great deal, in comparison with 38% of all US households.
- Almost half (47%) of all Hispanic household heads report no financial strategy.
- Fewer than one-quarter of Hispanic households received financial advice from a professional in the past two years.
- Hispanic households are more likely than all US households to want to learn more about how to manage debt, budget better, and prepare for retirement. One-third are concerned they are not saving enough for their future needs.
- About one in ten Hispanic households are satisfied with their current financial situation. Hispanic households are less likely than all US households to believe that they:
- Hispanic households are more likely than all US households to be extremely concerned about replacing sufficient income if a wage earner dies or becomes disabled.
- One-quarter of Hispanic heads agree that they don't have as much life-insurance protection as they should; the same proportion would be seriously interested in buying insurance that guarantees an income if they were unable to work.
– Know how to choose the best financial products and services
– Keep their financial affairs in order
– Are disciplined in their savings and investing decisions.
The average Hispanic household is not especially confident about its current financial situation. Many understand the need to learn more about finance and debt management, budget preparation, and retirement savings. Hispanic households in child-rearing life stages will experience an increased need for financial products and services. For example, before saving and investing, many are ideal candidates for financial information and advice. To capture their business, providers must strive to understand these modest customers in order to build trust and form long-term relationships.
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