The Aging of Immigrants to the United States

Written by Manuel Carvallo, President and Founder of Hispanic Wealth

The desire for a better future, the lack of opportunity or political unrest where they live and labor demand in the United States are factors that have motivated immigrants to leave their countries in pursuit of the American dream. But what are the factors, if any, that will motivate them to go back? Seldom do we stop to think about the immigrant’s long-term plans, whether they are thinking about retiring in the U.S. or returning to their country of heritage when their working capacity declines. Will they have enough resources to support themselves in old age.

Many immigrants seek opportunities in the U.S. at the base of the pyramid, in positions that require low skills and hard work. Attitude, health and strength are their assets, but as the immigrant ages the health and strength fades away. Then getting a job becomes increasingly difficult, especially for women. In order to gain an insight on how are immigrants preparing for their later years, we conducted a survey among more than 4,000 Mexican immigrants in the U.S. Below are some of our findings and full results can be downloaded here

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More than half (55%) of respondents expressed their desire to retire in Mexico. As of 2013, approximately 11.6 million Mexican immigrants were living in the United States. If 55% of this group decides to retire in Mexico, the implication would be that at least six million Mexicans would return during the course of the next three decades. This is the equivalent of the entire population of the state of Tennessee. Many will return with a reduced working capacity, without resources and increasing needs for medical care. By and large they will not qualify for Mexican Social Security benefits and Mexico is currently not prepared to receive them.

Five out of ten Mexicans surveyed expect to collect a pension in the U.S. from the Social Security Administration (SSA). In reality just only one in ten seem to fulfill the conditions that would allow them to receive one. A false expectation is created since millions of unauthorized immigrants contribute to Social Security, but they don’t qualify for benefits from the SSA when they get old.

What is the future for those who plan to stay and retire in the United States? For immigrants planning to retire in the United States the perspective is bleak. The false expectation of receiving benefits from the SSA affects an estimated 4 million Mexican immigrants, many of whom will not have accumulated enough assets to procure for themselves in retirement.

Income to support retirement usually comes from three sources; income provided by Social Security, income from an employer-sponsored retirement plan and income provided by personal savings. It is common to refer to these sources as the three-legged stool. The majority of Mexican immigrants will not qualify for Social Security benefits, do not work for the type of companies that offer retirement benefits, and few of them have savings. What supports them if all three legs of the stool are missing? Family is their safety net.

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The survey found that nine out of ten respondents are willing to support their parents in old age in case of need. Six out of ten currently provide economic support to either parents or in-laws. There is an implicit social solidarity contract between generations in a family, but the family structure is shrinking and the fulfillment of this contract is becoming increasingly difficult.

Smaller families are challenged to provide the needed support for their elders, particularly if the immigrant parent is not entitled to health coverage either. Despite the difficulties immigrants currently face in supporting their elders, the survey showed that six out of ten expect to receive old-age support from their children. Assigning to their children the immigrant’s long-term retirement costs could derail the economic projects of the next generation or leave many immigrants destitute at retirement.

The family is a large network of social solidarity, but clearly insufficient for the great challenge anticipated.

The time is now for those who care about diasporas to come forward with proposals and ideas to cover thes vulnerable segments at retirement and avoid humanitarian crisis in our countries in the future. Compassion can only take us so far.

The retirement of immigrants is a problem of such scale that its solution should not be left to chance, it is a responsibility that must be addressed now to avoid becoming an unmanageable crisis tomorrow.

David Batstone said “Pulling drowning people out of a river is compassion. Justice is walking upstream to solve the reasons they are falling in.”

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