A majority of Latinos have no retirement savings, according to a study by the National Institute on Retirement Security, a nonprofit research group based in Washington.
Nearly 70 percent of Latino working-age households have no assets in a retirement account, and 62 percent of Latinos between the ages of 25 and 64 do not have employer-sponsored retirement plans.
That is higher than the percentage of people in other major ethnic/racial groups – black, Asian and white – appearing to be woefully unprepared financially for retirement.
The percentage for whites was 37 percent.
About 38 percent of Latino employees ages 25-74 had a retirement plan through work, compared with 54 percent of blacks and Asian-Americans, and 62 percent of whites, the report said
The study found that 62 percent of black working age households and 69 percent of Latino ones had no assets in any type of account for retirement.
The findings bode ill for a nation in which Latinos are the largest minority group – numbering more than 50 million, including 23 million in the labor force, according to the U.S. Dept. of Labor. They make up 15 percent of the U.S. labor force, expected to rise to nearly 20 percent by 2020.
The dearth of retirement savings is rooted in myriad factors.
“Labor market and socioeconomic characteristics like education, skill, wage level, occupation, and industry clearly contribute to the overall racial gap in workplace retirement plan coverage,” the report said.
“That is, blacks, Asians, and in particular Latinos are less likely than whites to be employed in industries and occupations that provide high wages and workplace benefits, including retirement benefits.”
The mean savings rate of minorities who do have assets for retirement is far below that of whites, the report said.
For Latino heads of household ages 25-64, the mean was $17,600. For blacks it was $20,132. For whites it was $111,749.
“Ultimately, the fact that the labor market is segmented by race, combined with the fact that some employers and jobs offer access to this critical benefit and others do not, puts workers of color at a significant disadvantage in accumulate resources for retirement.”
But even while whites fare better than minorities, their savings for retirement still are inadequate for what they are expected to need in their golden years, the report said.
“The median account balance of $29,000 for [white] near-retirees represents a tiny fraction of the 8-11 times annual income that some financial experts recommend in order to maintain their standard of living,” it said.
People who work in the private sector are less likely to have a retirement plan than those in the public sector, the report said.
This may be another factor in why Latinos lag behind other groups in terms of having retirement assets.
The U.S. Dept. of Labor says that more than 8 in 10 employed Latinos work in the private sector, not including the unincorporated self-employed.
They are far less likely to work for government than are either whites or African Americans.
“With little to else to depend on besides Social Security when they eventually retire, people of color are especially vulnerable to economic hardship and reliance on public assistance in old age," the study found. "Addressing the lack of readiness among people of color is critical to solving the national retirement crisis.”
For Republicans, the cause of the Electoral College map's increasing hostility can be traced to the party's inability to seriously compete for the country's now-large Latino population. Battleground states like Nevada and New Mexico have moved out of range while states with large urban and immigrant populations like New York, California and Illinois have only become more hostile.
During my four years as state Republican Chairman in California, not once did a Republican legislator or Congressman ask me about what the party was doing to improve the performance of its candidates among Latino, Asian, and African-American voters. Our statewide candidates, by contrast, were intensely interested.
Why the difference? Eventually it became clear that many Republican lawmakers didn't consider earning Latino support to be an urgent priority because for them, in their districts, there wasn't a "Latino problem." Indeed, in the lopsided districts from which most of our legislators were elected, they could lose every single Latino vote and still win by a healthy margin.
Republican statewide candidates in California, by contrast, have to compete in a "district" that is over 38-percent Latino. This creates the Republican Party's structural problem when it comes to getting serious about building a wining majority: Legislators elected from safe, lopsided districts have a different set of priorities than national or statewide candidates in states like California in New York, who need a broader coalition in order to win.
GOP lawmakers who would like the opportunity to actually have their bills signed by a Republican president need to take seriously the job of expanding the party beyond just a majority of their own district to a majority of the nation. And President Obama has just given them their opportunity, although not by design.
Gallup last week released a shocking statistic: President Obama's support among Latinos has plummeted by 23 percentage points in the last 11 months, from 75 percent in December 2012 to 52 percent today. For every three Latinos who supported the president last year, only two support him today.
Indeed, Latinos have left the president in larger numbers than any other demographic group.
There is no way to spin this into anything other than a big problem for the president and his 2014 Democratic candidates, and an equally large opportunity for Republicans.
According to Gallup, "Hispanics' approval ratings of Obama have shown the most variation of any group's ratings throughout his presidency. That means their views of him are less firmly anchored than those of other groups...." In other words, Latinos were never totally sold on President Obama in the first place, and they're more likely to sour on him. Given the universal embarrassment of Obamacare, it's not difficult to see how voters not firmly committed to the president would turn against him.
The reverse should also be true: If the president is seen as delivering on something of value, his support among Latinos should improve, with benefits for his fellow Democrats as well. Passage of immigration reform for which Democrats can take the bulk of the credit holds such a possibility.
Gallup provides an important lesson for Republicans: Latinos are "more volatile" and therefore less reliable for Democrats than other groups. It is what Gallup describes as "a troubling sign for the Democratic Party."
The Electoral College map will not improve for Republicans until this problem is solved It's a question not of politics or ideology but of mathematics. Fortunately for Republicans, there are positive examples in leaders like Republican Gov. Susana Martinez of New Mexico, who was elected in the most heavily Latino state in the nation, and one where the Democrat advantage in registration is 4 percentage points larger than in California. Gov. Rick Perry in Texas, another heavily Latino state, won reelection with at least 37 percent of the Latino vote. Gov. Chris Christie in New Jersey won nearly half of Latinos in his reelection last month.
Taking advantage of the door that President Obama has opened among Latinos will require more Republican lawmakers to make it a priority, even if their own reelection doesn't depend on winning Latino votes.
Political parties are defined nationally. What Republican elected officials in Washington do defines the party for everyone wearing the jersey, not just for themselves. Republicans have an opportunity to begin earning Latino support again. The Gallup numbers show that Latinos are listening. The question now is what Republicans will say.
The Obama administration moved Thursday to protect some of the sickest patients in the country from the possibility that they would lose health insurance on New Year’s Day.
Medically needy patients enrolled in temporary high-risk pools now have an extra month to sign up for new coverage because of early enrollment struggles in Obamacare nationwide, the Centers for Medicare & Medicaid Services announced. The extension seems to be the Obama administration’s first tacit acknowledgement that it can’t guarantee that everybody who wants to obtain coverage starting Jan. 1 will be able to do so.
The federal Pre-Existing Condition Insurance Plan, or PCIP, which has provided coverage to about 135,000 people previously shut out of coverage, was to sunset at the end of the year, but it instead has been extended through January for those in the program who haven’t yet gotten new coverage.
“Today, as part of our efforts to smooth the transition to the Marketplaces for those seeking coverage that begins in January, we are taking steps to ensure that Americans enrolled in the federal PCIP insurance plan will not face a lapse when the new year begins,” CMS spokesman Aaron Albright said in a statement. “We are committed to providing consumers additional flexibilities while they evaluate and select a quality, affordable, health plan that meets their needs.”
Senate Minority Leader Mitch McConnell quickly blasted the announcement as a “clear admission” that the health care law is failing people with pre-existing conditions.
“Millions of people were tossed off of the plans they already had, but only a fraction of that number have been able to sign up on the Obamacare exchanges,” McConnell said in a statement to POLITICO. “How many extensions and waivers is it going to take for the administration to admit the consequences of Obamacare that are hitting millions of Americans they promised it would help?”
The PCIP program was included in the Affordable Care Act as a temporary bridge to 2014, when insurers can no longer deny coverage to patients with pre-existing conditions or charge them more based on health status. The individuals at risk here may be fighting cancer or dealing with chronic diseases like diabetes or asthma.
A number of states running high-risk pools that predate the Affordable Care Act are also slated to close them at the end of December. Others, including Indiana and Texas, have already extended their high-risk pools, which are separate from the federal program.
The national association representing state high-risk pools had recently called for a three-month PCIP extension, but it labeled Thursday’s announcement “acceptable” and cautioned the administration to be flexible if enrollment problems continue.
The administration “must constantly assess the situation, and if problems persist, a longer extension should be considered,” said Tanya Case, chairwoman of the National Association of State Comprehensive Health Insurance Plans.
Enrollment in PCIP was shut off months ago to stretch the Affordable Care Act’s $5 billion appropriation for the program until the end of the year. CMS said Thursday that it has enough funding to cover expected costs in January. It didn’t specify how many PCIP participants have found new coverage since the Oct. 1 start of Obamacare enrollment.
Kirsten Sloan, a senior policy director for the American Cancer Society’s advocacy arm, said cancer advocates are “pleased” with the extension. “It gives a person with cancer a little more time to select a plan and more important, it makes sure there is no interruption in their coverage for someone going through treatment,” Sloan said.
Asked if she’s confident that everyone who wants coverage by New Year’s Day can have it, Sloan said: “We’re watching that, along with everyone else. But we’re hopeful.”
Read more: http://www.politico.com/story/2013/12/obamacare-extension-101096.html#ixzz2nIcpOSKP
For many people who try to buy a home, especially first time homebuyers, getting a loan can prove difficult. Buyers need to be able to provide a sizable down payment and have a good credit score to qualify for most conventional loans. Not all hopeful homebuyers meet these qualifications, and that’s where FHA loans come in to save the day. However some critics are calling this type of loan abusive.
FHA loans are mortgage loans that are approved by the Federal Housing Administration (FHA) and because of their lax qualifications (low down payments and easy-to-meet credit score requirements). They are some of the easiest loans to qualify for.
Compared to most loans that require a 20% down payment, the FHA’s requirement of a 3.5% down payment seems like nothing, and makes FHA loans attractive for those with lower incomes and, in particular, first-time home buyers.
So FHA loans sound like a good deal, right? The answer, according to Edward J. Pinto, a resident fellow of the American Enterprise Institute (AEI), is a resounding no. Pinto claims that FHA loans are “predatory” and “abusive”.
In order to decide if Pinto is correct in his claims about FHA loans, first we must look at the definition of a “predatory” loan.
According to the Federal Deposit Insurance Corporation’s (FDIC) Inspector General: “Predatory lending typically involves imposing unfair and abusive loan terms on borrowers, often through aggressive sales tactics; taking advantage of borrowers’ lack of understanding of complicated transactions; and outright deception.”
Based on this definition, FHA loans may qualify as predatory.
For one, lower-risk borrowers are severely overcharged by FHA mortgage insurance pricing. According to AEI, in 2013, homebuyers that purchased homes with FHA loans lost $4,000 individually, and $710 million between the combined 200,000 homebuyers receiving FHA loans.
Pinto further explained, “The consumer who has the very-low-risk loan doesn’t even know he might be better off going through the private sector. They may assume that the government is protecting their interests.”
In addition, Pinto believes that FHA relies on a borrower’s lack of understanding of how the insurance process works. Most borrowers believe that the FHA wouldn’t encourage them to partake in financially unfavorable situations, but unfortunately, are still being charged excessively for the mortgage insurance. The FHA’s mortgage insurance rate is 1.35% per year, which is significantly higher than traditional rates, and therefore ends up costing homeowners thousands of dollars more than other loan options.
David Stevens, the president of the Mortgage Bankers Association who also served as FHA commissioner from 2009-2001, disagrees with Pinto’s accusations of FHA being predatory. He does not believe that FHA preys on the poor, and believes that the recent restructuring of the agency’s standards has improved the fairness of the loans and their overall lending system.
Stevens said, “The data clearly shows that the loans being made today by FHA are the highest-quality loans in its history, with extremely low default rates.”
However, Stevens does agree with Pinto in that borrowers are better off choosing a Fannie Mae-backed loan if they can meet the qualifications: 5% down and a minimum FICO score of 740.
Mark Clayton Hand, Oxford SBS Seed Fund co-founder, recently concluded a three-piece series on Latino startups, tracking some hurdles and high points that startups face as they move toward success. The firstpost questioned where Latino startups were; referring to both Latino-owned and Latino-focused endeavors. Thesecond post explored challenges that Latino startups face, such as failing to find proper funding; and, the third and finalpost on the subject regards Latino startups that consumers and proprietors should keep their eyes on in the new year.
Startup companies come in all forms, and are generally businesses that deal in intellectual property, as opposed to material property. Successful startups tend to be more scalable than established businesses, therefore attractive to many investors; they tend to utilize internal cash flow and keep overhead costs low. In addition, they are high risk and high reward. Latino startups (Latino-owned, Latino-focused; high growth, small business) tend to face difficulties when it comes to finding funders, networking with venture capital investors, and securing high-risk capital.
The $1.3 trillion dollar U.S. Hispanic consumer market has been tapped by major corporations such as Best Buy, Yahoo, and The Home Depot, but Latino startups have still been able to capture a piece of the mounting market, despite challenges. New Futuro's Peter Wilkins found very few investors when he looked to raise venture capital earlier this year, targeting the U.S. Hispanic community, feeling that there weren't many doing the same. Capitol investors looked elsewhere, as tend they to seek vetted startups with wealthy backdrops, and they rarely seek out-of-network ventures and ideas. That, however, didn't slow down New Futuro. New Futuro continued to offer its client base -college hopefuls- educational advice, materials, events, resources and an online community in English and Spanish. Their resources reach millions of Hispanics annually.
HolaDoctor, Xoom, Progreso Financiero, New Futuro and Consorte Media lead the Latino market startup brigade, becoming some of the few startups to build teams, raise funds, and capitalize in the Latino market. Latino startups with a focus on financial services, education, and immigration usually lead in this sphere, financial services being the most active sector. There are a number growing startups that are Latino-owned and/or focused, that have will be of great assistance to Latino families:
Edrizio de la Cruz, Wharton MBA and Echoing Green Fellow, heads Regalii, which is a startup that allows for families to spend remittances in any way that they deem necessary. Bucks Bill Pay is an enterprise which allows customers to pay their bills in cash at designated stations, use for those who don't have checking accounts or credit. And, a product that motivates Latinos to be more fiscally responsible and will help them track their own expenditures via SMS, Juntos Finanzas, is product that was born at Stanford University.
Education-focused startups are on the rise as education becomes increasingly important in Latino American homes. 500 Mexico City, the Mexico City extension of 500 Startups funds YogoMe, an educational application that will soon branch into language learning. This business draws in resources from both sides of the border in order to ensure its success. Last month, 500 Mexico City selected its latest batch of startups to support, 17 were chosen. Plaza Familia is a bilingual math and language skill tutoring site that's aimed at assisting educators and parents. The comprehensive education site was founded by social media veteran Ana Roca Casto. Another education startup is Sleek-geek, which developed three tablet apps for teachers.
LexSpot, a startup that functions in the realms of immigration services, offering price quotes from immigration attorneys, rose $750,000 since its inception. The venture also collects client data and compiles relevant documents so that lawyers spend less time handling paperwork. YaSabe is bilingual, local search engine, which is another 500 Startup company. AssuredLabor is a $5.5 million company that's based in New York, and has outlets in Brazil and Mexico.