When contemplating retirement, questions always arise — and it’s important to address them head-on. In many families, cultural traditions and expectations raise certain concerns. All of this can weigh heavily on your mind.
This uncertainty is widespread among Hispanic households. According to the Federal Reserve’s 2023 Survey of Household Economics and Decisions (SHED), only 21% of non-retired Hispanic adults believe they are on track to save for retirement, the lowest percentage of any racial or ethnic group. This could reflect disparities in access to savings options: About 64% of Hispanic workers do not have access to a workplace retirement savings plan, according to a 2022 AARP report.
Cultural influences are at work, too: A 2021 survey by the Employee Benefits Research Institute found that Hispanic Americans of all income levels were significantly more likely than non-Hispanic whites to say that financially helping family and friends takes priority over saving for retirement.
Now, back to you. No matter where you are in your retirement life, it’s important to evaluate your personal situation and arm yourself with information. Here are answers to seven common questions Latinos in the U.S. ask as they begin to think about retirement planning.
To compile this list, we analyzed Google search data to find the most frequently asked questions about retirement-related topics in Spanish and English in the United States, as well as the AARP articles and resources offered in response to those questions.
1. How much will I receive in Social Security benefits if I retire at age 62?
This is probably one of the most commonly asked questions because it’s the earliest age you can claim benefits and the age at which 55% of Hispanic workers retire, according to the Federal Reserve’s 2019 SHED report. But doing so means accepting a harsh reality: Your monthly payments will be up to 30% less than if you wait until your full retirement age (FRA), and that reduction is permanent.
For example, let’s say you turn 62 in 2025 and the Social Security Administration calculates your total benefit amount based on your lifetime earnings history is $1,800 per month. If you wait until your FRA (which in your case is age 67), you’ll get that amount. If you claim Social Security at age 62, your benefit will be $1,260.
That could cost you hundreds of dollars each month for the rest of your life, which is the main reason why many financial experts recommend waiting until at least your FRA — and even better, many recommend waiting until age 70, when your monthly benefit will be at its maximum.
Just as important as understanding how age affects benefits is knowing that Social Security was never intended to be a retiree’s sole source of income (in fact, the program is designed to replace about 40% of working income, on average). According to Social Security Administration (SSA) projections, the median annual benefit for Hispanic recipients in 2030 will be about $16,600, while the median for all recipients will be about $22,600.
Your own benefit is based on your highest-earning 35 years. Use the AARP Social Security calculator to estimate your future benefits or set up a free My Social Security account on SSA.gov to see your projected benefits at different claim ages.
Bottom line: While health, financial and family issues may dictate the decision to retire early, it’s important to understand the implications of retiring at 62 (including the fact that you still have three years until you’re eligible for Medicare) and carefully weigh the pros and cons. AARP’s Navigating Social Security resource center, with answers to more than 200 questions about Social Security benefits and services, is a great place to start.
2. Can I collect Social Security if I live outside the U.S.?
The short answer is, yes. In most cases, you can collect your Social Security pension while living abroad. This is good news if you or your parents’ retirement plans depend on returning to your home country, where you may benefit from a lower cost of living, more affordable healthcare, and family members who can help with your care needs.
But before you pack your bags and hope for benefits to be paid, there are a few things you should know.
If you are a U.S. citizen, you can continue to receive your retirement benefits in almost all countries. (The only exception in Latin America is Cuba, where payments cannot be made by U.S. companies due to U.S. Treasury sanctions.) If you are not a U.S. citizen, the rules are different. In this case, the Social Security Administration may end your payments six months after you relocate unless you return for a full calendar month and can document your stay. However, there are exceptions to this rule that allow you to continue your benefits if you meet those conditions. Use the Social Security Administration’s Overseas Payment Review Tool to make sure you are eligible to continue your payments. International direct deposit of Social Security benefits to a local bank is available in most countries and territories. If you don’t have a local bank account, the Social Security Administration can deposit your benefits onto a Direct Express card. For more information, see USDirectExpress.com or call 800-333-1795.
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