What You Need to Know
- The author contends that immigrants and their children often have a different way of looking at personal finance.
- Many immigrants come from countries where the normal retirement age is less than 65.
- Some immigrants are counting on getting financial support from their children.
First-generation immigrants and their American-born (or raised) children may hold distinctly different views of money. Divergent viewpoints on money between generations can lead to misunderstandings and tensions within families. Unfortunately, first-generation immigrants (those born in another country) may also fail to plan adequately for retirement if they cling to the financial traditions of their home countries.
Understanding how different generations view money along with smart retirement strategies for first-generation immigrants can help foreign-born individuals create a stable financial future.
First-Generation and Second-Generation: How They View Money
First-generation immigrants tend to favor the financial practices of their home country. This is completely natural and normal. Their kids though (the second-generation) may be well assimilated and have no ties to the financial approaches of their parents’ homelands.
For example, first-generations immigrants may come from countries where sharing money with extended family is commonplace. Because of this cultural tradition, they may feel a sense of duty to care for older relatives as they retire, even after they move to the United States.
As you might have guessed, this scenario can lead to some first-generation immigrants neglecting retirement savings since they assume their children will help support them in their older years.
Second-generation immigrants, however, may not want to continue this money-sharing approach as it is not a common practice in the United States. As a result, first-generation immigrants may find themselves underprepared for retirement, which can lead to hardships later on for both them and their children.