Needs-based Strategies

Executive Summary

MassMutual’s State of the American Family

Asian Indian Families

To understand the changing landscape of American financial security, MassMutual released the third wave of a nationally representative survey of American families. This research sheds light on families and their finances across the United States, including that of Asian Indian families.

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A modern American success story

While not without concerns in the current economy,

Asian Indians are emblematic of the classic immigrant

success story. As a group, they are educated, hard-working,

focused and entrepreneurial. Three-quarters have advanced

degrees – twice as many as the general population – and

virtually all of the rest have at least an undergraduate degree.

Due to their active engagement in financial planning, many

are now well-positioned to realize as never before the bene-

fits of the American Dream.

Across multiple financial categories, Asian Indian American

families exhibit high levels of product ownership at levels

that are comparable to – and in some cases even exceed – that

As one of the fastest-growing segments of the U.S. population, Asian Indian Americans embody the brightening economic prospects of the country. With a median household income of $88,000, they represent the highest earning segment in the country (2010 Pew Research Center). Many are working in the areas of engineering, medicine, technology, finance, and entrepreneurship.

of the general population. Asian Indians possess the highest

rates of ownership of mutual funds, individual securities, and

college savings plans of any group. Likewise, Asian Indian

Americans are perhaps the best-positioned among all groups

to meet any financial emergencies, as more than one-third have

set aside six months or more of their monthly living expenses.

To ensure that this path of financial viability continues, it

will be critical to aid Asian Indian American families in

reaching their goals for the next generation, as they now

turn their priorities to helping their children attain the tools

necessary to succeed in the future.

Product ownership

General Pop

Asian-Indian

0 10 20 30 40 50 60

Legend 2

Legend 1

Long-Term Care Insurance

College Savings Plans

Individual Securities

Mutual Funds

Long-Term Care Insurance

College Savings Plans

Individual Securities

Mutual Funds53%

60%

43%

57%

37%

41%

18%

22%

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Caring for the family comes first

Similarly, two-thirds of Asian Indian Americans say they

think about what’s best for their families when making

decisions about money. Among financial priorities cited by

Asian Indian Americans, the top two are focused on ensuring

financial viability for their families: saving or investing for

college education, and making sure their families will be

taken care of financially in the event of death.

67 percent think about what is best for the family

when making financial decisions.

For Asian Indian Americans, ensuring the well-being and financial viability of their families is the essence of the American Dream. The three most common components of the American Dream for Asian Indian American families are: owning a home, financial security for themselves and their families, and taking care of their families financially.

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In addition to the top financial priorities identified, one-quarter

of Asian Indian Americans also say that leaving an inheritance

for their families is important – compared to just 16% of the

general population.

Top financial priorities

Saving/investing for college education for your kids/grand kids

Making sure my family will be taken care of financially if I die

Paying off my mortgage

Developing a plan for managing income in retirement

Saving/investing for medical/healthcare expenses in retirement

41%

38%

35%

51%

46%

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Active involvement in finances is important

Nearly 70% want to be actively involved in all

decisions regarding their finances.

Still, many wonder if what they are doing is enough. While

Asian Indian families believe in planning for their financial

security, have accumulated robust savings, and possess a

high ratio of financial products, only about a third are satis-

fied with their current financial situations, and only about

a third feel confident selecting investment options to meet

their goals. Just under half feel that investing and financial

planning should be a higher priority. About a third wish they

were more in control of their finances.

Working with a financial professional can greatly aid Asian

Indian families to optimally achieve their goals. However,

only 22 percent of Asian Indian Americans do use a financial

professional – much lower than the general population

(38 percent).

Self-reliance in financial matters is a defining characteristic of Asian Indian families. Nearly 70 percent say they want to be actively involved in all decisions regarding their finances – similar to the general population. However, they are more likely than the general population to do their own research and make their own decisions about insurance and investment products.

Education as a key to success

73%

66%

54%

35%

16%

21%

11%

5%

54% are actively seeking to educate themselves

on finances.

Because of the high priority Asian Indian American households place on prudent financial decision-making, it should come as no surprise that three-quarters believe it’s important to educate children about finances to ensure a strong economy in the future. In addition, one-half are actively involved in providing this education. Not only are Asian Indian American families ensuring the next generation be educated about finances, over half are actively seeking to educate themselves, compared to just 30 percent of the general population.

For Asian Indian parents, making prudent financial decisions

themselves represents one of the most effective ways for them

to educate their children on finances, and many represent

strong role models – particularly when it comes to avoiding

debt and accumulating savings. Asian Indian American

families have lower average levels of debt than the general

population across all categories.

Types of debts

Credit Card Debt

Mortgage Debt

Student Loan Debt

None of These General Population

Asian Indians

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Elder care should not be a burden

While the family unit comprises the most important social institution within the Asian Indian American community, with interdependent roles and expectations outlined between parents and children, financial viability is important so that parents do not become an undue burden to their children. This belief is evident when it comes to the importance of saving in Asian Indian American households. Asian Indian Americans have the highest expectation among all groups that a greater proportion of their retirement will come from personal savings (46 percent).

Ensuring the success of the next generation through educa-

tional attainment represents a top-level priority for Asian

Indian American families. Six in ten Asian Indian American

families feel that paying for their children’s college educa-

tion is something they insist on doing. Nevertheless, some

families struggle to balance this commitment with their

retirement planning. More than one-quarter say they struggle

between saving for retirement and for their children’s college

educations. Despite this heightened sensitivity, many Asian

Indian Americans are on track for retirement.

Long-term care and concerns about the cost of providing

care weigh on the minds of Asian Indian American families.

Seventy percent of Asian Indian families ultimately say they

do not want their children burdened by taking care of them

when they are older, but generally expect that when a family

member falls ill, they will be the primary care provider.

Traditionally, Asian Indian families have cared for elders

within the family unit. Asian Indian Americans are also

among the highest in exhibiting concern over the cost of

providing care.

Retirement planning (Compare to General Population)

Confident will retire at intended age

Older than I planned

Younger than I planned

The age I had planned

44%

49%

43%

35%

11%

13%

46%

52%

General Population

Asian Indians

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Asian Indian Americans are perhaps the most successful immigrant group in the history of the United States. Because of their size and diversity, they have been able to assimilate quickly, earning college degrees, finding challenging jobs, and starting businesses in record numbers. By retaining the best of their traditional values of education, respect for family, achievement and personal responsibility, Asian Indian Americans are working towards, and increasingly achieving, the American Dream.

Building optimism

For more than 160 years, MassMutual has been providing

strength and stability to generations of families and

businesses. Like the many Americans who are placing

“family first,” we are focusing on the people who matter

most to us – our policyholders.

MassMutual offers the following tips to help Asian Indians ensure their finances are on the right track:

Talk to your children about money. Explain that every

household has a finite amount of money, and every dollar

spent on one thing is a dollar not spent on something else.

Use trips to the mall, gas station, and grocery store as oppor-

tunities to talk about what things cost and to compare items

with different prices and features. Give kids the opportunity

to suggest choices based on what you have discussed.

MassMutual offers a variety of family seminars to teach

families and parents about finances.

Think about current expenses and future expenses to

see if you are saving enough right now. The percentage

of pre-retirement income a family needs to maintain their

standard of living depends on the family’s goals. If you are

not on track to meet your goals, you may want to talk to

someone who can help you create a plan. Research the social

security program to learn more about how it can supplement

your retirement savings, with the understanding that policy

changes may impact the current plan’s structure.

Consider your goals and priorities. Discuss them with your

spouse or other immediate family members and think about

how you may be able to achieve them. A financial profes-

sional can help you to create an actionable plan. Keep in

mind the questions: what’s important to me/my family now

or later? and what am I doing now/will I do later?

Sign up for free financial management tools, blogs, or other

online resources. Ask friends to refer a financial services

professional. Once you have the contact information for

several, “interview” them to select one whose style and

approach works well with yours.

Visit massmutual.com today to contact a MassMutual financial professional in your area and learn how to take the next step in creating a solid financial strategy and achieving fiscal fitness.

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MethodologyThe State of the American Family program, an in-depth series of research studies, is exploring the changing definitions and dynamics of families in this country. This multi-year initiative will produce a deeper understanding of the different forms families take, how factors like ethnicity and income affect family dynamics, how family members interact on financial and other matters, and trends that will shape families in the coming decade. The State of the American Family will provide adults and children in the United States with the information and guidance they need to make responsible financial decisions.

The State of the American Family survey was conducted for MassMutual by the Forbes Consulting Group, LLC between February 4th and February 25th, 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 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 percent 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.

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