For Many Boomer Immigrants, Rough Times Ahead
Often, their savings are low and family needs are high
Chris Farrell is senior economics contributor for American Public Media's Marketplace and author of the new book, Unretirement: How Baby Boomers Are Changing the Way We Think About Work, Community, and The Good Life.
The first Latino immigrants and East African refugees moved to Lake Street in the early 1990s, however, looking for cheap storefronts and housing. The urban core is now flourishing with immigrant-owned restaurants, hairdressers and other small businesses and nearby neighborhoods crowded with working families.
The story of Lake Streets is familiar all over the country and the modern wave of immigration is one of the great human dramas in American history. New York, Miami, Los Angeles and other major metros are immigrant capitals; venture anywhere in the heartland and you’ll run into plenty of foreign accents. Some 13 percent of the U.S. population was born abroad, up from nearly 5 percent in 1970.
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Concerns for Boomer Immigrants
But how is the immigrant baby boom generation doing and what does their financial future look like? Their numbers are significant. Immigrant boomers represent a majority of Hispanic and Asian newcomers and the number of immigrants age 65 and over has nearly doubled, to some 5 million since 1990.
Among the immigrant boomers is Ramon Leon, executive director of the Latino Economic Development Center (LEDC), a small nonprofit that advises immigrant entrepreneurs and is housed in a basement complex on Lake Street. Leon, 50, crossed the border from Mexico undocumented, but became a citizen following the Reagan Administration’s 1986 Immigration and Control Reform Act. He’ll qualify for Social Security and has participated in a 401(k) for the past seven years. Of course, he’s managed to accumulate only a modest sum in retirement savings in less than a decade.
“I do want to slow down, but I need to work at least another 20 years,” Leon half-sighs, half-chuckles. “Latinos don’t stop working until we can work no longer.”
Leon knows he’s among the lucky, with retirement savings and future Social Security benefits. The same can’t be said for many of his boomer immigrant peers.
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Low Wages Without Retirement Plans
Many leading-edge boomer immigrants have toiled in low-wage jobs, often two or three at a time. Their employers typically didn’t offer retirement savings plans; sometimes these employees worked off the books. Other older immigrants came to the U.S. to take care of their grandchildren while their adult kids pursued educations and careers.
Either way, English language skills are often limited and financial literacy low — from a lack of understanding of Social Security to little knowledge of the basics of money management.
“This population is very vulnerable,” says Yunju Nam, an associate professor at the University of Buffalo, SUNY. “I am really concerned about their financial future.”
Fewer Assets, Longer Lives
On average, aging immigrant boomers own fewer assets, earn less income and have little savings set aside for their elder years than their native-born peers. They also tend to work longer, well into the traditional retirement years. Foreign-born adults are also among the longest-living adults in the world. Immigrants are also less likely to receive retirement benefits than natives, either through Social Security or private pensions.
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Of course, averages are somewhat misleading, masking a rich tapestry of diverse immigrant experiences.
In New York City, for example, Canadian, European, Japanese and Middle Eastern seniors have lower poverty rates than native-born elders, according to the Center for an Urban Future. Highly educated immigrant computer scientists, engineers, professionals and high-tech entrepreneurs populating creative class meccas like Silicon Valley, Boston’s Route 128 and Austin, Texas are well-compensated and enjoy good corporate retirement and medical benefits. A fifth of older immigrants have a bachelor’s degree or higher, a level similar to native-born Americans, notes the Migration Policy Institute.
Family also remains a big safety net for senior immigrants. In the Asian and Latino communities, family members are deeply engaged in supporting their aged parents.
Investing In Their Children
For some older immigrants, the notion of saving and planning for retirement is an alien concept; Instead, they invest in their children. Professor Bruce Corrie, an economist at Concordia College, moved to the U.S. in the early 1980s from India to get his doctorate at the University of Notre Dame. “My parents never saved for retirement,” he reflects. “The goal was to get us children where we needed to be. They saved money for our education.”
That said, boomer immigrant seniors are, generally speaking, at risk of declining living standards.
Harvard University economist George Borjas looked into U.S. Census data to compare the post-retirement experience of immigrants 65 and older at various stages from 1970 to 2007. He found that in 1970, the average income of elderly immigrants was about 5 percent lower than elderly natives. Yet by 2007, about the time the leading edge of the baby boom generation began confronting retirement, the average income gap had widened to 30 percent.
Borjas believes the gap may be the result of an increase in boomer immigrants from emerging markets in Asia and Latin America. According to calculations by Yunju Nam of the University of Buffalo, 35 percent of older immigrants are from Latin America and 29 percent from Asia.
Helping Asian Immigrants
Case in point: the Vietnamese, who started arriving after the fall of Saigon in 1975. Many of the Vietnamese who came together to build The Vietnamese Social Services of Minnesota (VSSM) nonprofit in 1987 were in their early 30s. Now, they’re in their late 50s and early 60s, typically employed in low-wage work at pork and turkey processing plants, as well as restaurants. Some own businesses, mostly servicing the local Vietnamese community.
“Many of them had excellent skills in Vietnam, but not here,” says a visibly upset Yen Pham, executive director of VSSM. “They were lawyers and doctors in Vietnam, but over here they need to speak English. They lost all the education they had.” Adds Tonhi Shi, the nonprofit’s elders program manager: “They have to work. Retirement means getting by for our elders.”
A program in San Francisco hopes older low-income Chinese immigrants will do better than that.
The nonprofit Self-Help for the Elderly offers a number of services to the aging Chinese community, including an employment agency, vocational training and job placement where fluency in English isn’t a requirement (such as home health care, home cleaning, janitorial services, hospitality work and, more recently, restaurant cooking).
Self-Help has on-staff counselors to act as interpreters with employers when needed. Anni Chung, the organization’s 62-year old president and chief executive, says the idea is to reach low-income Chinese workers between ages 50 and 55 and to help ensure they earn at least 40 quarters of paid, on-the-books employment, the minimum necessary to file for Social Security. Their typical Social Security income: well under $1,000 a month.
“My goal is to create more job opportunities for older immigrants,” she says. “San Francisco is so expensive it will be hard to stay here without work.”
The nonprofit National Asian Pacific Center on Aging (NAPCA), based in Seattle, Wash., runs 10 Senior Community Service Employment Centers (SCSEP) in seven states, primarily serving Asian-Americans and Pacific Islanders — part of the federal SCSEP program for workers 55 and older with incomes below 125 percent of the federal poverty guideline.
Participants get part-time community service work and are paid the federal minimum wage, or the state minimum if it’s higher. They can stay in the program for up to 48 months; the goal is to get them into unsubsidized jobs. The Asian Pacific Center’s SCSEPs encourage worker participation in the mainstream financial system by using direct deposit of wages into bank accounts.
Eun Jeong Lee, national director of senior community service employment program at NAPCA and Yunju Nam looked into the level of financial understanding among older Asian Americans in three locations, Los Angeles, Orange County and New York. Their report concluded that financial literacy is “very low in terms of financial knowledge, understanding of social programs, and financial management.” Put somewhat differently, says Professor Nam: “think of taking care of your parents without Social Security and Medicare.”
The Challenge Ahead
Aging native-born boomers have much to learn from their immigrant peers, including the benefits of nurturing kinship networks and the financial rewards of working longer. And some policies designed to help older low-income immigrants would benefit all seniors. In coming decades, the common challenge will be boosting the living standards and economic security of lower-income Americans, immigrant and native-born.
Chris Farrell wrote this article with support from the MetLife Foundation Journalists in Aging Fellowships, a project of New America Media and the Gerontological Society of America.
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