Summary
The Chicago Urban League's core mission is to economically empower African Americans. But one thing is for certain - and I don't care who you are or what you do - you'll never be a player in the wealth creation game if you don't save money.
"401(k) Plans in Living Color: A Study of 401(k) Savings Disparities Across Racial and Ethnic Groups The Ariel/Hewitt Study" provides a revealing look at minorities' spending and saving habits as it relates to their participation in the employer's 401(k) savings plan. The researchers found that African Americans and Hispanics participate in their company 401(k) plans at a lower rate than any other racial or ethnic group, regardless of income. When they do enroll, they save less money than other groups, are more likely to borrow against their savings plan and are less likely to own stocks. All of this can add up to a retirement spent in financial dire straits.Interestingly, 58 percent of the companies participating in the survey automatically enroll their workers in the 401(k) plan. Too bad more companies don't do that, but companies are not required to even offer a 401(k), so the onus is usually on the employee to make saving money a priority. Saving for retirement is a learned behavior like brushing your teeth or getting your oil changed every 3,000 miles. But it's a lesson that unfortunately too many of us in the Black and Hispanic communities haven't learned.Recommendations in the study include encouraging plan administrators and employers to design 401k plans to benefit a diverse employee base, with automatic enrollment and a default contribution rate that increases over time.See the full content of this document
Extract
Save Yourself From a Retirement Spent in Poverty
The Chicago Urban League's core mission is to economically empower African Americans. But one thing is for certain - and I don't care who you are or what you do - you'll never be a player in the wealth creation game ...
See the full content of this document
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