The U.S. Census Bureau has released a report on the country’s foreign-born population, showing a 15% increase between 2010 and 2022. With over 46 million foreign-born Americans now making up nearly 14% of the total population, it is clear that many of them will become part of the middle market of workers, consumers, and retirees in the future. However, it is also clear that they do not share a common retirement heritage.
Retirement heritage is different from financial literacy as it encompasses the stories, goals, attitudes, and behaviors learned from previous generations, particularly parents. This heritage informs individuals on what to trust, how to prepare for retirement, and what constitutes a successful retirement. The issue arises when individuals do not have a retirement heritage to guide them, leaving them unsure of how to navigate life after work.
Even native-born Americans may lack a robust retirement heritage, relying on imagery and information from brochures, media, and employer seminars to inform their retirement planning. The growing foreign-born population in the U.S. has diverse ideas about retirement, with many lacking or having different retirement heritage than what is offered by the retirement industry. This presents a challenge for financial services companies and employers to provide tailored financial planning that respects and integrates diverse perspectives.
The changing demographics in the U.S., particularly the growing Hispanic and Asian populations, present new opportunities for the financial services industry. However, these populations come from a variety of countries with different cultures, traditions, and experiences. This new generation of employees, clients, and future retirees will have varying levels of trust in financial institutions, government, employers, and markets, making it crucial for the industry to develop culturally competent retirement education and solutions.
The concept of retirement heritage introduces a critical lens through which to view the challenges and opportunities in retirement planning today. As the U.S. becomes increasingly diverse, the financial services industry must adapt by developing more culturally competent retirement education and solutions that cater to a broad spectrum of retirement traditions and expectations. This new market of foreign-born individuals presents an opportunity for financial services companies, employers, and financial professionals to engage, educate, and prepare a new generation of Americans for financially secure lives across the lifespan.
The number of foreign-born people in the U.S. today is greater than the entire population of Canada, highlighting the vast new market opportunities for financial services companies, employers, and financial professionals. By understanding and addressing the diverse retirement heritage of this population, these entities can help prepare a new generation of Americans for a financially secure future across different stages of life.
