The latest Ariel/Schwab Black Investor Survey found that blacks are enrolled in a workplace defined contribution plan in the same numbers as Whites, but save far less and have a lot less set aside for their later years.
About nine in ten of both blacks and whites who have access to a defined contribution plan contribute regularly, according to a release of the survey results.
However, the median monthly amount blacks contribute to their 401(k) plan is $169, while whites contribute about 50% more, or $249 each month. As a result, the median total household savings for retirement reported by black respondents is $53,000 compared with the figure for whites of $114,000, according to the news release.
Although 45% of blacks under the age of 50 (compared with 26% of whites) say they want to retire by age 60, they are half as likely to cite retirement as their most important goal when saving and investing (after controlling for income, education, age, and other key demographics), according to the release. Among those older than 50, however, reality has set in: 24% of blacks and 9% of whites still plan to retire by age 60.
“The problem is that people don’t start saving for retirement early enough,” said Mellody Hobson, Ariel president, in the release “This is [a] lifelong task, not something you start in middle age. The earlier people understand this, the better their chances of achieving their dreams.”
Argosy Research surveyed 503 black and 506 white households earning more than $50,000 annually. It was administered by telephone between June 11 and July 13.