Study: Racial Disparities Apparent in 401ks
From NewsOne (via the AP):
"A new study of 401(k) plans has revealed that black and Hispanic workers save significantly less for retirement and tap into their accounts more frequently than white and Asian employees.
The study of 3 million 401(k) plans at more than 50 large companies concludes that unless some changes are made to encourage more saving by some minority groups, they run the risk of retiring into poverty.
The analysis, released Tuesday, was done by business consultant Hewitt Associates and a nonprofit educational foundation of Chicago-based Ariel Investments.
It shows 66 percent of black employees and 65 percent of Hispanic workers participate in their company’s 401(k) plan while 77 percent of white workers and 76 percent of Asians enroll.
Black and Hispanic workers also contribute at much lower levels, the study shows.
Among those who save, white employees contributed 7.9 percent of income, compared with Hispanic workers, who contributed 6.3 percent and black workers, 6 percent.
Asian workers contributed most at 9.4 percent.
Lower contribution rates means black and Hispanic workers have lower account balances at all pay levels.
Among employees earning between $30,000 and $59,999 black workers have saved $21,224, Hispanics, $22,017 and Asians have set aside $32,590. White workers saved $35,551."
Read the rest of the article here.
Saving money is certainly a learned behavior and, in some respects, a matter of acculturation. Note to people of color: Let's go ahead and add this to the acculturation menu post-haste. Don't trust 401ks? Fine. Put it in the mattress or bury it in the backyard. Just have some money for a rainy day.