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If you read my article on how I only need $581 a month to survive, you know a little bit about my family and our immigrant story.
My mother is the middle child of 11: seven girls and four boys. Her parents were farmers in Ojo de Agua, a small mountainous town on the northern tip of the Dominican Republic. They lived off the land by selling plátanos, mangos, and other fruits and vegetables.
If you asked my grandparents if they had a retirement account, they’d probably laugh at you before they replied: “Our children are our retirement account.”
That’s the reality for many Latinos today. According to a report by the National Institute on Retirement Security, 4 out of 5 Hispanic households have less than $10,000 in retirement savings. That’s partly because many Latino workers are less likely to have retirement plans at work, and it’s challenging to make enough money to save for such a long-term goal.
This is a direct result of the lack of financial education in our communities and systemic issues in the U.S. that have prohibited the financial stability and independence of immigrants. The fear of the unknown has also kept many Latinos from investing. According to one study, only 5% of people that invest in the stock market are Latino.
I saw this reluctance firsthand in my family. If there was money to spare, my grandparents and parents focused on supporting the immediate needs of their family—not investing in their own futures. But I was determined to change that.
Growing Up and Getting By
My mom’s mother, Juana, never had a “real” job, and her highest level of education was third grade. Growing up, while the boys chopped banana trees, my own mother and her sisters fetched water from a river two miles away in order to clean the house. My grandparents lived off the land until they slowly began immigrating to the U.S. in the ’80s.
My mother, Julia, was 22 when I was born. I was her first child, the little girl she always dreamed of having. She was immensely creative and used her sewing skills to make little dresses for me, a trait she learned after always getting hand-me-down clothes from her older sisters.
Only eight months after I was born, my grandfather received a notice in the mail. He was living in America and the request he had put in for my mom’s F2A visa was approved. The F2A visa allows a U.S. citizen to bring an immediate family member to the U.S. My grandfather had been planning this for years, but the timing of the approval put my mother in a tough place.
Although my mom knew this could happen, she wasn’t prepared to leave her infant and husband behind. But she understood that it would be an opportunity to live a better life, so she left her young family and came to New York to work.
How My Mom (and Lots of Latinos) View Retirement
In the U.S., my mother got a job at a pharmaceutical company making minimum wage (about $3.80 an hour at the time). She clocked in and out using a time card and got paid weekly. She didn’t understand W2s, taxes, insurance, or 401(k)s. Her only goal? Saving as much as possible so she could afford visas for my father and me.
It took quite a while to save $660 for the application fees and finally begin our immigration process. Four years later, thanks to her sacrifices, we were reunited.
My mother always put her family first, and she didn’t save for retirement. Instead, along with her brothers and sisters, she helped my grandparents financially, especially my grandmother who spent her life working and caring for her children, but never had an income.
Getting Free Money at My First Job
The first time I learned about saving for retirement, I was 19 years old and working a summer job at a nonprofit organization. The HR manager was a Puerto Rican woman named Maribel. She didn’t seem very enthused about her work, and with a straight face she explained a 403(b), the retirement account offered by nonprofits, to me: “It’s free money, but you need to sign up to get it.”
I remember thinking to myself, “Sign up now, ask questions later.”
I felt like I could trust Maribel. She was knowledgeable, looking out for my best interests, and Latina like me.
But when I told my mom about my new retirement account, she scoffed. “Why would you be putting money into that when you don’t know how long you will live? You should be saving cash.” My mom had always lived paycheck to paycheck, and the fear of not having enough kept her from thinking about investing for the long term.
In one sense, my mom wasn’t wrong. I was 20 years old and had zero emergency savings. I didn’t have my financial life together—but because I had already signed up and was getting an employer match, I continued to save for retirement. I’m grateful I did.
Starting with $50
If you are getting an employer match—aka “free money”—you should always save for retirement. It took me years to understand the importance of an emergency fund and to build a personal financial plan, but while I was figuring that out, I was investing in the market via my retirement account, watching it grow, and getting my contributions matched by my employer.
I started with a small amount, just $50 per paycheck. But I quickly saw the power of compound. Now I save $500 per month and am on course to have $1.6 million when I officially retire at 67 years old. When I recently showed my mom my account and these projected numbers, she was so amazed and proud. I think it’s safe to say that she’s glad I followed my own personal finance path.
Here are five tips to save for retirement and become a millionaire:
What Retirement Means to Me Today
Today, saving for retirement is one of the pillars of my business, Investing Latina. I talk about how it’s important to pay your future self now in order to be financially self-reliant at retirement age. As I recently shared on Instagram, it’s important to change the way we see saving for retirement and building wealth for our families. By investing for retirement, we avoid being a financial burden to our children. It’s a way to show love and respect.
How to Get Started
Perhaps saving for retirement wasn’t something that you talked about with your parents. You still have the power to elevate yourself and build wealth.
Financial independence for you can start with just $50 per month. It’s all a matter of taking the first step.
Ask your employer about the benefits they offer, like 401(k), 403(b), or 457 accounts, and how much they match. Don’t worry about maxing out now—you can work your way up to contributing to the limit.
If you’re self-employed, you can open a Roth IRA on your own (the IRA stands for Individual Retirement Account), where you can save up to $6,000 per year and take advantage of the tax benefits.
Regardless of your history or experience, it’s never too late to learn and start saving for retirement.