How Race Shapes Retirement Wealth (2024)

FAQs

How does race affect retirement? ›

Racial wage gaps are a major reason that Black and Latinx workers are unable to save as much for retirement. Black and Latinx workers are also less likely to work for employers who offer retirement plans like 401(k)s.

In 2021, households with a White householder made up 65.3% of all U.S. households and held 80.0% of all wealth.

In 2019, about 63 percent of white households had a retirement account balance compared to about 41 percent of households of all other races. Among households that had retirement savings in 2019, white households had double the median balance of all other races ($164,000 to $80,300, respectively).

The racial wealth gap refers to the disparity in assets of typical households across race and ethnicity. The gap in assets is far wider than disparities in wages across races. Income inequality, housing policies, limited educational opportunities, and a lack of support structures contribute to the racial wealth gap.

Savings rate by race and ethnicity

Fifty-one percent of people of color save more than 10% of their income each month, compared to 34% of white Americans. Hispanic/Latino Americans are most likely to save over 10% of their income while white Americans are least likely.

Savings by Race

There are clear racial disparities in savings rates. White, non-Hispanic Americans have a median transaction account balance of $12,000, compared to $2,110 for Black, non-Hispanic Americans and $2,100 for Hispanic Americans.

38% Black or African American. 43% Hispanic or Latino.

Nearly 86% of millionaires are white. That's not constrained to just millionaires: According to the Federal Reserve, a typical white family's wealth dwarfs that of typical Black and Hispanic families, with the white family's wealth six and five times higher, respectively.

Why Indians are earning the highest in USA? While the data Goenka shared appear to be from a 2013-15 American Community Survey, more recent numbers from 2019 also indicate the same thing: Indians leading from front. Asian Americans, with a population of around 1.8 crore, are the highest-earning ethnic group in the USA.

In 2022, households whose head identified as Asian or White had median incomes higher than the national median, while households led by people who identified as Black or Hispanic had median incomes that were lower than the national median.

How many Americans retire with no money? ›

The financial services company surveyed more than 1,000 Americans regarding their retirement savings. Twenty-eight percent of respondents said they have $0 set aside for their later years.

After adjusting for assets and liabilities by household, the difference in wealth inequality by racial group becomes more apparent. White households have the highest net worth, 52% greater than the net worth of those households in the other category, and more than four times greater than Hispanic households.

Black consumers account for a disproportionate amount of product sales in a number of fast-moving consumer goods categories. Again, with $1.2 trillion in spending power, African-American consumers are an important population for smart brands that want to grow market share and brand preference.

New research by the Urban Institute, a nonpartisan think tank focused on economic and social policy research, found that the average wealth of white families in 2022 reached a record high of over $1.3 million, compared to about $227,000 for Hispanic families and $211,000 for Black families.

The burden resulting from lower account balances is greater for women because of their longer life spans and the need to finance more years in retirement. Minority women tend to have even lower retirement incomes than White women and many older women of all races rely solely on Social Security benefits.

If there were some years you didn't work or had low earnings, your benefit amount may be lower than if you had worked steadily. The age at which you decide to retire also affects your benefit. If you retire at age 62, the earliest possible Social Security retirement age, your benefit will be lower than if you wait.

Health and disability status play a major role in determining whether workers can continue to work and whether retirees would be able to work if they so desired. Specifically, workers in poor health are less able to continue working, and retirees in poor health are less able to have worked longer than they did.

And saving for retirement is only becoming more difficult as Americans deal with rising costs. Escalating housing, healthcare, and long-term care costs in retirement are creating financial obstacles for many Americans.