New Faces, New Futures: Rethinking Retirement Planning & Advice in a Changing America

The U.S. Census Bureau recently released a report on the nation’s foreign-born population. The data indicates that between 2010 and 2022, the country’s foreign-born population increased by more than 15%. Making up nearly 14% of the U.S. population, foreign-born Americans total more than 46 million people, an increase of six million since 2010.

Most, but not all, of these people will become part of a vast mass middle market of workers, consumers, and perhaps someday retirees. Some will struggle, while others are already more affluent or will become wealthy over time. However, what is clear is that nearly all of them will not share a common retirement heritage.

Retirement heritage is different from financial literacy, which is simply about how to manage your money. Budgeting, managing debt and spending, saving and investing, and planning for retirement are just a few elements of financial literacy.

Heritage is something transmitted or acquired from a previous generation. Retirement heritage, however, includes the stories, goals, attitudes, and, ultimately, behaviors that we learn from others. It typically comes from our parents, and it informs who and what we should trust, what we should do to prepare for and live in retirement, and what constitutes a successful or good retirement.

But who teaches us how to retire if our heritage does not include the retirement story most often presented by financial services, advisors, employers, and popular culture? How do we learn what we should and need to do for this mythical life stage? Retirement is not a natural, universally experienced force like gravity; it is a story that many, but not all, people subscribe to, and many in industrial economies have the opportunity to enjoy.

Retirement and the related financial planning and products offered by employers and financial professionals often include some assumptions that the employees or clients know what retirement is and what they will do in life after work, that they understand and trust the underlying financial system, employers, and financial companies, and that they know how they should plan and save. Not so.

Even native-born Americans do not necessarily have a robust retirement heritage. I am a first-generation college graduate and, perhaps someday, a first-generation retiree. My parents did not retire. Many of us share this story. Even among those who did have parents who classically retired, their parents may have enjoyed the benefits of a guaranteed and robust pension, making their retirement far different from those who participate in defined contribution plans.

Those new to retirement may rely on imagery and ideas found through brochures, media, the web, and employer-provided retirement seminars to inform us about what comes next if we stop working in older age. Some, but far from the majority, of us have the added advantage of a financial professional to help navigate retirement planning and living.

Indeed, the growing population of foreign-born people has a diverse set of ideas about life in older age. Many have no retirement heritage at all, or at least one that differs from what the U.S. retirement industry presents.

In my recent paper published in the Investments & Wealth Monitor, “Preparing for the New Average: The Changing Face of Tomorrow’s Financial Services Client,” I cite how changing demographics will add new opportunities for financial services but will compel the industry and its employer plan sponsor partners to provide significant opportunities to educate a fast-growing and highly diverse market.

For example, the two fastest-growing populations to come to the United States are Hispanic and Asian. However, to call either Hispanic or Asian retirees one group would be an error of both culture and geography. Foreign-born Hispanics are far from universal in experience and culture. Today’s Hispanic population hails from 17 different countries, Pew Research Center notes. Likewise, Pew adds that newly arrived people from Asia come from nearly two dozen nations with vastly different cultures, traditions, and experiences. Some of these nations have solid and stable institutions; in other instances, they may be countries that have or are undergoing tumultuous political and economic change. In nearly all cases, this new generation of employees, clients, and, perhaps one day, retirees will have very different levels of trust in financial institutions, the government, their employers, and markets.

Many foreign-born people will be self-employed upon arrival and for a lifetime, leading them to believe that the popularized retirement story is a narrative about someone else but not them. Others will come to the United States as affluent and highly educated professionals but unfamiliar with employer benefits or who have enough wealth to engage and benefit from the services of a financial professional.

The number of foreign-born people in the United States today is greater than the entire population of Canada. This vast new market is hiding in plain sight for financial services companies, employers, and financial professionals to discover, educate, engage, and prepare a new generation of Americans to live longer, better, and more financially secure lives across the lifespan.

Want to learn more? Follow me on LinkedIn @drjoecoughlin and subscribe to my newsletter, #LongevityEconomy, as I explore the impact of changing demographics and behavior on business, government, and society.

An earlier version of this post was published on Forbes.