Allianz Life Study Sheds Light on “One-Size-Fits-All” Retirement Planning Problem for BIPOC Communities

2021 Retirement Risk Readiness Study identifies distinct differences among ethnicities regarding retirement risks as well as interest in getting help from a financial professional

Key findings snapshot:

  • Majority of BIPOC respondents worry they won’t have enough saved for retirement (52% Black/African American; 56% Hispanic; 62% Asian/Asian American)
  • 54% of Black/African American respondents feel the rising cost of living will prevent them from enjoying their retirement, versus 67% of Hispanic respondents and 74% of Asian/Asian American respondents
  • Fewer BIPOC respondents are working with a financial professional than white Americans, with perceived barriers to getting help varied among ethnicities

MINNEAPOLIS – Sept. 20, 2021 – The majority of Americans who identify as BIPOC (Black, Indigenous, and People of Color, including Hispanic and Asian/Asian Americans) believe they won’t have enough saved for retirement (52% Black/African American; 56% Hispanic; 62% Asian/Asian American), according to the 2021 Retirement Risk Readiness Study* from Allianz Life Insurance Company of North America (Allianz Life). While this level of concern compares to that of white respondents (56%), the level of worry from each BIPOC community varies significantly among different ethnicities. These findings, along with perceived barriers to working with financial professionals, confirm the complexity of retirement planning for BIPOC communities and the nuanced approach necessary to help each ethnic group achieve their financial goals.

 

In terms of the various risks that can derail a retirement strategy for BIPOC individuals, top concerns are consistent, yet Black/African American respondents tend to be less worried across the board, with Asian/Asian Americans the most worried and Hispanic respondents falling somewhere in the middle. The top retirement risks each BIOPC community is most worried about include (% worried):

 

 

Black/African American

Hispanic

Asian/Asian American

Healthcare costs will be so high you can’t afford the care you need

55%

66%

76%

The rising cost of living will prevent you from enjoying your retirement

54%

67%

74%

The cost of living will increase and you won’t be able to afford necessities

55%

63%

70%

That you won’t be able to take care of yourself

47%

60%

69%

Running out of money before your die

50%

64%

65%

The market will take a downturn and hurt your nest egg

52%

60%

66%

You’ll become a financial burden to your loved ones

37%

52%

55%

 

“While it’s logical to assume that different ethnic groups have different priorities when planning for retirement, it’s eye-opening to see just how varied the level of their concerns are and how that perspective likely affects their approach to spending and saving,” said Travis Walker, Advisor Specialist, Allianz Life. “It’s important for the financial services industry to recognize these unique differences, because they illustrate why financial professionals should consider cultural dynamics when helping BIPOC communities plan for their financial future.”

Perceived barriers to professional help

Fewer BIPOC respondents are getting professional help with their finances than white Americans (38% Black/African American; 44% Hispanic; 36% Asian/Asian American; versus 46% white), which indicates there is still ample opportunity for financial professionals to assist BIPOC clients. However, much like their worries about different retirement risks, a closer look at why each ethnic group may or may not get professional assistance is revealing.

 

When asked why they are not currently working with a financial professional, more than one-third (37%) of Black/African American respondents said it was because they “don’t have enough money,” versus only 30% of Hispanic and Asian/Asian American respondents. For Asian/Asian Americans, the biggest barrier was cost, with 45% indicating it “costs too much” to work with a financial professional versus 27% of Black/African American and 26% of Hispanic respondents.

 

Hispanic respondents report being most active in the financial planning process, with four in 10 indicating they have made a formal financial plan with a financial professional, versus less than one-third (32%) of Black/African Americans and only about a quarter (26%) of Asian/Asian American respondents.

“If financial professionals want to help more BIPOC communities prepare for a successful financial future, we must place more focus on understanding their unique concerns, not treating them as one homogenous group, and tailoring approaches to address how each BIPOC community thinks about retirement,” said Aimee Johnson, vice president of Advanced Markets and Solutions, Allianz Life. “In this way, our industry can be more effective in helping mitigate the specific risks that are causing each BIPOC community the most concern.”


*Allianz Life conducted an online survey, the 2021 Retirement Risk Readiness Study, in December 2020 with a nationally representative sample of 1,000 individuals age 25+ in the contiguous U.S. with an annual household income of $50k+ (single) / $75k+ (married/partnered) OR investable assets of $150k.

The study included an oversample of the following BIPOC ethnicities: Black/African American: 396 responses; Hispanic: 386 responses; Asian/Asian American: 370 responses.

About Allianz Life Insurance Company of North America

Allianz Life Insurance Company of North America, one of the FORTUNE 100 Best Companies to Work For® and one of the Ethisphere World’s Most Ethical Companies®, has been keeping its promises since 1896 by helping Americans achieve their retirement income and protection goals with a variety of annuity and life insurance products. In 2020, Allianz Life provided additional value to its policyholders via distributions of more than $10.1 billion. As a leading provider of fixed index annuities, Allianz Life is part of Allianz SE, a global leader in the financial services industry with approximately 150,000 employees in more than 70 countries. Allianz Life is a proud sponsor of Allianz Field® in St. Paul, Minnesota, home of Major League Soccer’s Minnesota United.