A “crisis” in retirement for African-Americans?
Posted on 07 February 2008
By Mark Miller
Permanent URL of this article: http://retirementrevised.com/money/a-crisis-in-retirement-for-african-americans
Research by Ariel Mutual Funds and Charles Schwab shows a sizable gap in participation by African-Americans in wealth-building for retirement. Ariel President Mellody Hobson writes this week at Huffington Post about what she calls a “looming retirement crisis” in the African-American community:
After struggling so long to join the middle class and fulfill the American dream, millions of African-Americans are at risk of falling behind in their golden years. Ten years of research on the saving and investing habits of African-Americans and Whites who earn at least $50,000 annually show that median savings for Blacks is just $48,000 compared to $100,000 for Whites.
The ages of those surveyed were roughly the same (50 for Blacks and 52 for Whites) and they had comparable income levels ($75,000 for Blacks and $81,000 for Whites). When you do the math, factoring in monthly savings rates and a modest annual return of 8 percent, both groups will be far short of what they need to retire at 65 with anything close to their current income level, even with Social Security.
Like other experts in the retirement saving field, Hobson concludes that workplace education is key to improving participation and saving rates, and that employers need to take the lead.
