A Qualitative Analysis of the Use of Financial Services and Saving Behavior Among Older African Americans and Latinos in the Los Angeles Area

Abstract

For this study, we conducted seven focus groups in the Los Angeles area with a total of 70 participants (42 Latinos and 28 African Americans) recruited from three senior centers and a church. There was a wide variety of responses in relation to the usage of financial services among participants. We found that although some participants seem to participate more in the formal financial sector and show a higher level of sophistication when managing their finances, other participants’ use of formal financial institutions is minimal. Among African American participants, we found several instances in which individuals feel very comfortable using banks. Lower levels of participation in the formal financial sector were found among the lower income Latino participants. In relation to barriers to participate in the financial sector, supply was not an issue, but demand and behavioral factors seem more important. Overall, no participants saved very much on a regular basis. We also find that participants in general do not want to ask their children for money, and also do not want to save and accumulate wealth to leave to their children.

Retirement Planning Among Hispanics: In God’s Hands?

“…In a more recent study, Richman et al (2015) find that as Hispanics become more acculturated (“rooted”), they have lower expectations that their children will support them when they get older. Our findings are consistent with Blanco et al (2015) in which Hispanic senior participants expressed that they do not want to ask their children to cover unexpected health expenses and aging needs. Our study expands on the latter by finding that participants do not expect their children to help them economically as they get older like they do to their own parents because their children have been raised in a different environment in which the social norm to help out older parents is not as strong.…”

“…In both Pacoima and Montebello, we held two focus groups, one for self-reported retired participants and one for self-reported non-retired participants. Both the focus group protocol and short survey were modified versions of instruments used in a previous study (Blanco et al, 2015). Despite our efforts to screen participants to an appropriate group, there were two retired individuals in a non-retired focus group, and one non-retired participant in a retired focus group.…”

“…Moreover, Social Security benefits were likely to be small since the average length of U.S. residence among study participants was just 17 years. Similarly, Blanco, Ponce, Gongora, and Duru (2015) drew on focus group and survey data to examine access to financial services and saving behavior among older minorities in the Los Angeles area. They also found a significant lack of preparedness for retirement among low-income Hispanics.…”

“…They also found a significant lack of preparedness for retirement among low-income Hispanics. The current study expands on Blanco et al (2015) by exploring in more detail barriers to retirement planning among low-income Hispanics, including both individuals at retirement-age and those approaching but not yet at the age of retirement.…”

Retirement Planning Among Middle-Aged and Older Hispanics

“…In a qualitative analysis on the use of financial services and saving behavior among older Hispanics and Blacks in the Los Angeles area it was found that most participants were not well prepared for the future in terms of their health care financing and that participants, in general, do not want to ask their children for money (Blanco's et al, 2015b). Our work expands on this analysis, by deepening the understanding of how Hispanics prepare for retirement and what are some of the barriers this population faces when planning for retirement, specifically in relation to financial planning.…”