Financial Capability and Retirement Confidence Among Low-Income Older Asian Immigrants

Background and Purpose: Although Asian Americans have been the fastest growing racial group in the United States for the last couple of decades, we know little about the financial conditions and long-term economic security prospects of this population. This study examines financial outcomes among low-income older Asian immigrants, with special attention to ethnic disparities. In addition, we examine the roles of financial literacy and access to financial services in explaining ethnic differences in financial outcomes.

Methods: We use data from a self-administered survey of a convenience sample of low-income older Asian immigrants who participated in a subsidized employment program in Los Angeles, Orange County, and New York City (n=159). The dependent variables are comfort level with opening a bank account, saving regularly, asset ownership, access to credit, and retirement confidence. Independent variables include ethnicity (Chinese, Koreans, and “other” ethnic group), financial knowledge, knowledge of social programs, and access to financial services. We use logit regressions. 

Results: Findings show precarious financial outcomes among low-income older Asian immigrants in the sample. Although Chinese have better financial outcomes than Koreans and “other” ethnic groups for most outcome variables, only a small percent of Chinese regularly save (16%) and slightly more than half have long-term savings (55%). The majority of the sample is not confident about meeting even basic expenses after retirement. Despite advantages in educational attainment, work experience in the United States, financial knowledge, and financial access, Koreans’ financial outcomes are worse than the other two groups. Regression analyses show that significant ethnic differences exist in most outcome measures. Controlling for demographic, human capital, citizenship, and financial capability does not reduce ethnic differences in financial outcomes, except for feeling comfortable opening a bank account.

Conclusions and Implications: Findings challenge the public’s image of Asian Americans as a “model minority,” economically successful and problem-free Asian immigrants. Results call for the development of culturally suitable financial capability-building programs for older Asian immigrants. Social workers should be educated about financial needs and capability to serve this population effectively.