A new study released by the Ariel Education Initiative and Hewitt Associates and funded by the Rockefeller Foundation confirms what many researchers and retirement policy experts have known for a while now: When it comes to providing retirement income, 401(k) plans just aren’t cutting it for many minorities.
The study finds that African Americans and Hispanics end up with smaller 401(k) account balances than their Asian and white counterparts for a variety of reasons. Even when adjusting for income differences, African Americans and Hispanics:
▪ Are less likely than Asians and whites to participate in workplace 401(k) plans;
▪ Generally save less than Asians and whites when participating in 401(k) plans; and
▪ Are more likely than Asians and whites to make loans and take early withdrawals from their 401(k) plans.
In addition to their findings, the study’s authors issue a call to action to “address the disparities and potential lack of retirement preparedness among any people of color” with the goal of ultimately benefiting “all plan participants, regardless of race, ethnicity or gender.”
Retirement USA answers that call by recognizing that 401(k) plans aren’t doing the job for the majority of workers and that our nation needs something more to ensure that all Americans will have enough to live on in retirement. Retirement USA is working for new retirement system that, along with Social Security, will provide universal, secure, and adequate income for future retirees. For additional information on Retirement USA and its principles, visit the web site at www.Retirement-USA.org.