(ThyBlackMan.com) Yet another survey confirms what we already know: Blacks don’t save as much as their white counterparts.
According to Prudential’s new study — the African American Financial Experience — 60 percent of African-Americans have less than $50,000 in company retirement plans and only 23 percent have more than $100,000. They’re also three times more likely to raid their 401(k) or other retirement plans to meet immediate financial needs, the study says.
Prudential’s findings echo research by Ariel Investments, which looks at 
middle class blacks. (According to Ariel’s July 2010 study, the median assets blacks have retirement plans is about half the amount that whites have accumulated: $56,000 compared to $106,000.)
This issue has not gone unnoticed in corporate boardrooms. One company that is trying to narrow the retirement savings gap among minority workers is McDonald’s, which uses some unconventional (along with very traditional) methods to get black and Latino employees to save for retirement.
Some highlights from Prudential’s research:
- African-Americans are more likely than the general population to cite charitable donations as an important goal (68 percent vs. 55 percent). College education — without debt — is also important.
- Only two in 10 African-Americans believe that they are on track to meet their planning and savings goals for retirement, and nearly twice as many say they are way behind or haven’t even started.
- African-American decision-makers tend to be more independent learners when it comes to finances, relying on books, financial websites, financial seminars and conferences and their employers for information. They also show a high interest in learning about financial issues through faith-based organizations.
- African-American women are driving financial decisions in their households. Of the African-American women surveyed, 72 percent indicated that they are the primary financial decision-makers in their households and do not share financial decision-making equally. This compares with 69 percent of African-American men, and 54 percent of the general population.
- African-Americans are nearly twice as likely to have a dream of starting a small business as those in the general population (35 percent vs. 19 percent), and view starting their own small business as a path to financial freedom. However, more than half of those with an interest in starting a small business say a lack of capital has been the primary hurdle to getting started.
Why don’t blacks save more? Experts say African-Americans distrust the financial system because it has excluded them for so long. In fact, 78 percent of respondents to the Prudential survey said they feel financial services companies “have not effectively engaged the African-American community.” Most of them do not use or have access to financial advisers.
That’s a big problem for the minority community, in general. And with America’s ethnic make-up changing rapidly, the color of money is changing, too.
Via; http://reut.rs/KWSi
