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

Rhea-AI Summary

The 2021 Retirement Risk Readiness Study by Allianz Life reveals that a majority of BIPOC (Black, Indigenous, and People of Color) respondents express significant concerns about retirement savings. Key findings indicate that 62% of Asian/Asian American, 56% of Hispanic, and 52% of Black respondents fear insufficient retirement funds. Additionally, higher percentages of Hispanic (67%) and Asian (74%) groups feel the rising cost of living will hinder retirement enjoyment. The study highlights barriers to financial professional assistance among BIPOC communities, which differ by ethnicity.

Positive

• Study highlights unique financial concerns among BIPOC communities, presenting opportunities for financial professionals.
• Hispanic respondents show increased activity in financial planning compared to other BIPOC groups.

Negative

• Fewer BIPOC individuals currently work with financial professionals compared to white Americans.
• Significant percentage of BIPOC respondents cite cost and insufficient funds as barriers to seeking professional help.

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--(BUSINESS WIRE)--

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 BIPOC 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210920005085/en/

Jeff Faust

jeff.faust@allianzlife.com

(612) 670-8971

@AllianzLife

Source: Allianz Life Insurance Company of North America

FAQ

What were the main findings of the 2021 Retirement Risk Readiness Study regarding BIPOC communities?

The study found that 62% of Asian/Asian American, 56% of Hispanic, and 52% of Black respondents are worried about their retirement savings.

How do BIPOC respondents perceive the rising cost of living in relation to retirement?

The study revealed that 67% of Hispanic and 74% of Asian/Asian American respondents feel that rising living costs will impact their retirement enjoyment.

What barriers do BIPOC individuals face in seeking help from financial professionals?

Barriers include perceived high costs and feelings of not having enough money, with 37% of Black respondents citing financial constraints.

How does financial planning involvement differ among BIPOC groups?

The study indicates that 40% of Hispanic respondents have formal financial plans, compared to 32% of Black and 26% of Asian respondents.