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MassMutual Study Provides Korean Americans Insight into Where to Start
SPRINGFIELD, Mass., Jan. 31, 2014 /PRNewswire/ -- This Lunar New Year, Korean Americans will welcome the Year of the Horse, a sign that is considered naturally lucky when it comes to money resources and career. Those characteristics may make this New Year the ideal one to resolve to better manage finances.
It turns out that many Korean Americans already are among the highest savers and have the lowest debt in the country; however, Korean Americans report feeling less satisfied with their financial well-being, mainly in terms of retirement savings, in comparison to other groups, according to the Massachusetts Mutual Life Insurance Company (MassMutual) third biennial MassMutual's State of the American Family Study, which offers a broad snapshot of Americans' financial views. Only about one-third of Korean Americans have determined how much income they will need in retirement, which falls well below the general population surveyed.
Even though long-term planning proves to be a challenge for most Korean Americans, the study reveals that this group is the least affected by serious debt. More than half are debt-free when it comes to mortgage, credit cards, and student loans. This statistic is what sets Korean Americans apart, with only 20 percent carrying credit card debt, 23 percent owing mortgage debt, and 13 percent paying off personal student loans.
"When it comes to preparing for financial emergencies, Korean Americans are split down the middle," said Wonhong Lee, assistant vice president of multicultural market support at MassMutual. "About one-third of these families have saved more than six months of living expenses, which is comparable to the general population. But another 14 percent have saved nothing at all. For many Korean Americans, they work very hard to build their American Dream, but our research reveals that they certainly can do more to protect and preserve their dream."
On the bright side, the study indicates that Korean Americans are looking for ways to educate themselves about their finances as well as to help their children understand the importance of financial planning, and Korean Americans are generally optimistic about the future. Approximately 60 percent of Korean-American parents agree that they do not want to burden their children with caring for them when they age, and more than one third plan to pay for their children's college education.
MassMutual congratulates Korean Americans who are starting the Year of the Horse with a solid emergency cash fund and offers the following tips to help them get the rest of their finances on track:
Preparing for the Golden Years. The amount of income needed to maintain a standard of living in retirement varies from person to person and family to family. List all current and future expenses to see if you are saving enough right now. If not, talk to a financial professional who can help create an appropriate financial strategy.
Teaching the Future Generation. Setting children up for financial success is vital, yet many parents might not know where to start. Consider involving children in high-level family budgeting discussions and paying some of the monthly bills. Playing family board games or engaging in activities that have a monetary component also can help kids learn in a fun way.
Protecting Paychecks. For families, making sure that their income stream doesn't stop coming in should be a priority, and disability income insurance may be a solution to address that need; it can help breadwinners meet future financial obligations – like paying electrical bills or, even more important, mortgages – if they are unable to work due to illness or injury.
Securing Families' Financial Futures. Not only does life insurance provide financial protection if the worst were to happen, but some policies also accumulate cash value* – a living benefit that can be used for supplementing retirement income, funding a child's education or emergencies.
To learn more about Korean-American families from the 2013 State of the American Family Study or for in-language information about planning your financial future, log on to massmutual.com/korean.
To learn more about MassMutual's State of the American Family Study or for educational resources for children on money management, log on to massmutual.com/soaf.
*Access to cash values through borrowing or partial surrenders will reduce the policy's cash value and death benefit, increase the chance the policy will lapse, and may result in a tax liability if the policy terminates before the death of the insured.
The State of the American Family Study is a biennial survey conducted in 2009, 2011 and 2013 for MassMutual by the Forbes Consulting Group, LLC. The 2013 study was conducted between February 4 and 25, 2013 via a 20-minute online questionnaire. The survey comprised 1,337 interviews with American households with children under age 18 for whom they are financially responsible. Interviews were conducted among men and women aged 25-64 as of 2013 with household incomes greater than $75,000 (50 completes were allowed among 25-32 year-olds with HH incomes falling between $50,000 and $75,000). Respondents had to contribute at least 40% to decisions regarding financial matters in their household to qualify. Results were weighted to the 2010 US Census distributions for age, gender, ethnicity, region, and same sex married/partnered couples to be representative of American families in this age and income bracket. This study includes trending data for survey waves conducted in 2009 and 2011.
Founded in 1851, MassMutual is a leading mutual life insurance company that is run for the benefit of its members and participating policyowners. The company has a long history of financial strength and strong performance, and although dividends are not guaranteed, MassMutual has paid dividends to eligible participating policyowners consistently since the 1860s. With whole life insurance as its foundation, MassMutual provides products to help meet the financial needs of clients, such as life insurance, disability income insurance, long term care insurance, retirement/401(k) plan services, and annuities. In addition, the company's strong and growing network of financial professionals helps clients make good financial decisions for the long-term.
MassMutual Financial Group is a marketing name for Massachusetts Mutual Life Insurance Company (MassMutual) and its affiliated companies and sales representatives. MassMutual is headquartered in Springfield, Massachusetts and its major affiliates include: Babson Capital Management LLC; Baring Asset Management Limited; Cornerstone Real Estate Advisers LLC; The First Mercantile Trust Company; MassMutual International LLC; MML Investors Services, LLC, Member FINRA and SIPC; OppenheimerFunds, Inc.; and The MassMutual Trust Company, FSB.
Contact: Karen Lavariere-Sanchez
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