How Latina Caregivers Can Build Retirement Security

Rodríguez didn’t lose her job. But between paying her mother’s bills and hiring extra help, “I drained my savings caregiving. I’m now living check to check,” she says.

The strain on Latina caregivers’ retirement resources is only likely to grow. Latinos are one and a half times more likely than non-Hispanic white people to develop Alzheimer’s or a related dementia, and have the steepest projected rate of increase in cases among racial and ethnic groups.

In such circumstances, having a plan to save for retirement, even a modest one, is crucial, financial professionals say.

“For us to take care of others, we have to be able to take care of ourselves,” says Lea Landaverde, founder of the Riqueza Collective, a financial-education company that focuses on building wealth in underserved communities.

“I know, as a Latina, we have this collective mentality where we have to take care of our community and serve others,” says Landaverde, whose parents immigrated from El Salvador. “A lot of us navigate the world not knowing what our financial health is. That makes us walk blindly with our money.”

Getting a retirement education

Existing systemic hurdles compound the difficulty many Latinos face in saving for retirement. A July 2022 AARP study found that nearly 64 percent of Hispanic workers lack access to a workplace retirement plan, compared with about 42 percent of non-Hispanic white workers. Latinos are disproportionately represented in lower-income occupations that are less likely to offer benefits, according to the National Research Center on Hispanic Children & Families. 

“Oftentimes we just are not educated about retirement savings … because many Latinas work in low-wage jobs that do not offer any type of retirement plan or workplace benefits for retirement,” Espinal says.

Studies show that even when they do have access, Hispanic workers participate in workplace retirement plans at lower rates than white peers. That’s a critical oversight, says Maribel Francisco, whose company, Our Wealth Matters, offers money coaching in English and Spanish.

“You should know whether your current place of employment offers some type of retirement plan and know if you are even enrolled in it or if you have to opt in,” she says.

Mercedes Vega admits she’s not well-versed in retirement matters. A 38-year-old Angeleno of Salvadoran descent, she became a caregiver suddenly, after her brother suffered a traumatic brain injury, and was let go from her job after missing two days at work due to the family emergency. She’s working again, but her employer doesn’t offer a retirement plan.

“I’ve never been offered any of that, never in [any] job,” she says, adding that the experience has made her want to learn more about financial planning.

Talking to a financial adviser can help, Espinal says. That’s something Latinos are less than half as likely to do as non-Hispanic white workers, according to a January 2024 report from financial-services firm TIAA.

“Sit and talk with an advice-only, fiduciary financial adviser,” Espinal says. “The ‘fiduciary’ piece is critical because they’re required to give you advice that is suited for you and your goals and not that which aligns with their interests and motivation,” such as maximizing a commission.

“It’s going to take some research on the part of our community to understand the language, the vocabulary around these things, like your 401(k), your investment funds, your target date fund, your expense ratio,” she adds. “We have to become comfortable with these terms and the language around investing.”

If you don’t have access to a 401(k), you can still start building a retirement portfolio though an individual retirement account (IRA), even if you don’t have much room in your budget for saving.

“Add small dollar amounts consistently every month, every week, biweekly,” Espinal says. “Just continue to add, because [with interest and investment returns] those small amounts of money over a long period of time can truly compound to become a significant amount.”

Giving care, watching costs

Carefully tracking your costs can help free up money to boost your saving. The nonprofit Women’s Institute for a Secure Retirement recommends adding up your caregiving expenses — everything from food and transportation for your loved one to helping with rent or medical bills — to create a monthly budget.

If your income isn’t covering your costs, look for ways to cut back, such as eating out less, shopping at thrift or discount stores, and searching for lower rates on home and car insurance or internet and cellphone plans.

Consider your living situation as well, Francisco says: “Where could you see yourself living that potentially has a lower cost of living if you do not have enough to continue living where you do? Is your house paid off already? Do you have enough funds to continue renting?”

This begs another question, she says, one that often figures into older immigrants’ retirement plans: “Are [your parents] OK with going back to the homeland and being taken care of there by a nurse, which may be way more feasible than being taken care of here at [their] children’s home?”

Another strategy is to simply ask for help, Espinal says. “We have multigenerational households; it’s very common in our culture. We need to involve the family.” She suggests engaging siblings, cousins, aunts and uncles to create a family-based plan, rather than simply assuming responsibility for ill or aging loved ones.

Espinal, the daughter of Dominican immigrants, followed her own advice, setting up a dedicated savings account to support her parents that she and her siblings contribute to monthly. “Anytime there was any issue with something at home that was needed — maybe we were short on money for the mortgage payment or short for the bills — we would always fill the gap with money from our family savings fund,” she says.

Johana Ventura’s caregiving job helps support her and her mother but doesn’t offer a retirement plan. “I have thought about my future because I’m also going to need help if I get to [old] age,” she says.

Jessica Pons

And don’t think you missed your chance if you didn’t start saving young. “The best time to get started investing for your retirement plan was yesterday,” says Francisco, a daughter of Mexican immigrants who was the first in her family to invest in the market. “The next best day is today.”

The alternative could be having to rely only on Social Security for your retirement income. The median monthly benefit for Hispanic women 60 and older in 2024 is $1,166 a month, or just under $14,000 a year, according to Social Security Administration data.

All this weighs on Johana Ventura, a Honduran immigrant and single mother of three in Los Angeles. At 47, she is working as a paid caregiver while also looking after her mother, who needs 24/7 care after a series of strokes left her bedridden.

Ventura worries about what’s ahead for her. While she does contribute to Social Security through her job, her employer doesn’t provide a retirement plan. “I have thought about my future because I’m also going to need help if I get to [old] age,” she says. “I have to start thinking about myself.”