Population aging is complicating retirement planning for Americans, and specifically for immigrants. As a 2017 National Academy of Science study showed, Mexican immigrants who arrive at older ages often struggle to support themselves in the United States and often consider returning home. Yet we lack a binational retirement policy that addresses those concerns.
What we need are two things: 1) bilateral agreements that enable Medicare coverage in Mexico, and 2) a Social Security “totalization” agreement allowing Mexican workers in the United States to earn Social Security credits for work in Mexico and the United States. Such solutions would expand retirement planning options for workers with increasing life expectancies. The United States and Mexico share a border that is among the most frequently crossed in the world by migrants seeking labor. Yet, while these two nations have Social Security totalization agreements with dozens of other nations, they do not have one with each other.
Simply put, a binational retirement policy would ensure retirement security for a population with limited resources that is at high risk of protracted periods of illness. It is true that work and immigration remains controversial in the United States, but at the same time, there is a growing recognition of the U.S. worker shortage and how Latin American workers can help solve it and maintain the productivity of the U.S. economy. Congress should address the needs of these populations, who will contribute to this country and who may later seek to retire elsewhere, including their native lands.
In 2020, 13% of Americans age 60 and older had no retirement savings. Retirement savings are even less prevalent among younger and immigrant workers. This means that a large proportion of future retirees will depend on Social Security for most or all of their retirement income. Among Mexican retirees, a modest retirement income is more likely to support an acceptable standard of life in Mexico than in nearly any U.S. city.
Our research shows that Mexican immigrants are poorer and less educated than Mexican Americans. They tend to work in jobs that may not provide access to Social Security benefits or to have legal status that prevents them from claiming Social Security or Supplemental Security Income benefits. Many, especially those who speak only Spanish, do not understand how Social Security programs work. The U.S. Social Security Administration is expanding outreach efforts to improve financial literacy among Hispanics. Older Mexican Americans and immigrants would especially benefit from this initiative.
But an even more potent solution would be a bilateral Social Security agreement that would combine work credits from both countries, allowing individuals who do not have enough credits in either country who qualify for a pension to receive one. This would enable Mexican immigrants and returning migrants to more readily access benefits and reduce their dependence on other income safety net programs.
Culturally sensitive approaches to retirement policy and planning such as these will become even more pressing in coming decades as Hispanics are redefining the next America. Policymakers will face difficult economic and political choices. The segment of the U.S. population that is at least 65 years of age will become more diverse in coming decades, as Hispanics triple their share of the older American population. We will increasingly need to address the threats to retirement security and care across multiple cultures.
Hispanics and other culturally diverse workers will become an even greater part of the U.S. labor force, particularly those serving the needs of a growing older population, and they will need options for their own retirement. Retirement policies reflecting the wide experiences and backgrounds of workers and diversity in their retirement desires can help retirees achieve the independence and freedom they need to choose how, when and where they retire.
Jacqueline L. Angel is a professor in the LBJ School of Public Affairs at The University of Texas at Austin.
Emma Aguila is an associate professor of public policy at the University of Southern California.