Retirement's racial divide: Blacks less prepared

[jelli]

Retirement's racial divide: Blacks less prepared

Survey shows fewer African Americans participate in 401(k) plans
The Associated Press
Updated: 11:52 p.m. CT Oct 10, 2007

NEW YORK - Employers have begun to discover troubling racial differences within their 401(k) retirement plans, a gap they say could leave today?s black workers far less financially prepared for retirement than whites.

Investor surveys and research by two large employers strongly suggest that blacks participate in retirement plans at far lower rates and are much less likely than whites to invest in the stock market. An industrywide study of 401(k) plan activity by race has never been conducted.

Exelon Corp., the country?s largest operator of nuclear power plants, discovered this year that about 15 out of every 100 black employees did not participate in its 401(k) plan, compared with around 10 of every 100 whites. It also found that one in three black employees contributed less than 5 percent of their pay to the plan, compared to just 14 percent of whites.

http://www.msnbc.msn.com/id/21226735/

 

[Olde Hornet]

This does not surprise me. Many of us were not taught about money. Many of use came up poor and retirement and saving money is / was not on the top of the list.

I got lucky and some of my european american co-workers encouraged me to start putting money in my 401k plan, but it took a few years before I did it. I wish I would have started the first day I started my job. I have passed the word and encourage the next generation of my family and friends. At a minimum do the company match - thats what I tell them.

 

[Da_Sperm]

I read a similar article on the cnnfn.com website last week. McDonalds noticed that only 25% of its African American Managers participated in its 401K program, compared to over 50% of white managers. So they decided to AUTO ENROLL their non participating managers in the 401K program.

I also read that in order to retire with a comfortable nest egg, a person who has not started saving by age 40 would have to save 21% of their income from age 40 to 65 to build up the necessary nest egg to retire at age 65.

I have been in the habit of reading "Millionaire in the Making" articles on cnnfn.com every week for about the past 5 years. Those articles keep me motivated about retirement planning.