July 14, 2009 - Posted by Lauren McGlothlin
A new study shows that African Americans and Hispanics are less likely than Asian Americans or Whites to participate in employer-provided 401(k) retirement savings plans or save for their retirements in general, regardless of age, income, or length of time in a job.
The recession has hit millions of Americans' retirement savings hard. The study's findings suggest that the retirement crisis will hit African-American and Hispanic retirees hardest.
Only 66 percent of African-American workers and 65 percent of Hispanic workers participated in their company's 401(k) or a similar retirement plan, compared to 77 percent of White employees and 76 percent of Asian-American employees. Additionally, African Americans only saved 6 percent of their salary for retirement and Latinos only saved 6.3 percent, while Whites and Asian Americans saved 7.9 percent and 9.4 percent, respectively.
African Americans and Hispanics are also less likely than other people to invest these savings in the stock market and are more likely to borrow from these savings early on.
The report recommends that employers consider automatically enrolling all employees and providing more opportunities for workers to learn how to manage their savings. The report also recommends that the government require schools to teach financial literacy and pass legislation to eliminate costly rules about early withdrawals and loans.
Categories: Seniors/Social Security
