Prudential Report: Asian Americans Financially Outpace U.S. Population
Asian Americans also have more caregiver responsibilities at home.
By Eve Tahmincioglu
Asian Americans significantly outpace the U.S. general population when it comes to income and retirement expectations, while at the same time provide more caregiving and financial support to family members, a Prudential Financial report released Thursday found.
Prudential’s 2016 Asian American Financial Experience survey found that the median personal income for this group is $62,000 and median household income is $87,000, compared to $42,000 and $62,000, respectively, for the population overall. (Prudential is No. 10 on the 2016 DiversityInc Top 50 Companies for Diversity list.)
Contributing factors for the income difference, the study pointed out, include where this group tends to live and educational attainment.
- Asian American populations are concentrated — in the East and West—and income levels are comparable to those of the general population.
- Asian Americans are more likely to have higher levels of education, with 38 percent holding a bachelor’s degree versus 26 percent for the general population.
- Asian Americans also are more likely to hold professional, managerial or administrative jobs that tend to pay more than other positions (55 percent hold such jobs, versus 47 percent for the general population).
On the home front, this group is pitching in more.
- Approximately one-third of Asian Americans identify themselves as caregivers for another person (e.g., spouse, parent, relative), compared to 22 percent of the U.S. general population.
- 20 percent of Asian Americans provide financial assistance to their relatives, versus only 6 percent of the U.S. general population.
“Today’s Asian Americans are devoting substantial resources to helping their families, and many also want to retire at an earlier age than most Americans,” said Sri Reddy, senior vice president and head of full service investments at Prudential Retirement, at a press conference Thursday to share the report findings.
Overall, the financial picture for this group was largely positive:
- More than a third of Asian Americans believe they could maintain their current lifestyle for a year or more if their household lost all of its regular monthly income.
- Asian Americans believe they will be able to retire at age 64.6 – more than a year earlier than the U.S. general population.
- 58 percent of Asian Americans surveyed feel that they are better off financially than their parents were at the same age, versus 49 percent of the U.S. general population.
While the financial news is rosy, the numbers of Asian Americans and Pacific Islanders in senior management ranks still lags. While DiversityInc’s Top 10 Companies for Diversity have nearly 15 percent of Asians in management and 8 percent in the senior management ranks, U.S. organizations overall have less than 6 and 5 percent, respectively.
Reddy said part of what may be driving this disparity is that many Asian Americans look for occupations with a higher predictability of success, so they may opt to become doctors, dentists, etc., instead of focusing on climbing to the top at organizations.
But he also stressed that the numbers we see in managerial ranks aren’t as gloomy as some people think. “There are about 5 percent Asians in the workforce,” he explained, so their representation in the corner offices as they stand today may not be out of line.
Some additional key findings from Prudential’s report:
- Asian American respondents are more likely than the general population to have access to a retirement savings plan at work: 76 percent versus 66 percent.
- What’s more, 58 percent of those with access to a workplace plan contribute to it at a percentage equal to or greater than the amount their employer matches.
- Only 38 percent of Asian Americans surveyed responded that they carry credit card debt, compared with 48 percent of the general population.
- Asian Americans also are less likely to have medical debt (7 percent of Asian Americans, versus 12 percent of the general population), and auto loans (30 percent versus 36 percent).
- Mortgage balances are higher. By contrast, reflecting the higher housing costs in the East and West where the majority of them reside, Asian Americans tend to have higher mortgage balances (7 percent have mortgage balances of $500,000 or more, versus less than 1 percent of the general population).