*Economists and investment advisers say a massive retirement wealth gap persists between white and black Americans.
“This gap in accumulated wealth stems from a legacy of social, economic, political and labor market discrimination that has played out across multiple generations in the Black community,” said Alhamisi Simms, portfolio manager at TIAA, a New York-based investment company that manages retirement plans for many teachers and others, Marketwatch reports.
White families typically have eight times as much wealth as black families, and the disparity can make it challenging for hardworking Black Americans to retire.
“No serious researcher thinks that it’s something about Black people or households that is causing the racial disparities and wealth inequality,” said Teresa Ghilarducci, a professor of economics and policy analysis at the New School for Social Research in New York, per Marketwatch.
“Black people have less wealth because they have less income,” said Geoffrey Sanzenbacher, associate professor of economics at Boston College and a research fellow at the college’s Center for Retirement Research, Per Marketwatch. “That’s a function still of discrimination and differences in education and opportunity.”
About 32% of Latino workers participate in a retirement savings plan. The percentage of Black participants is about 40%, according to Sudipto Banerjee, director of the Baltimore-based investment firm T. Rowe Price.
Banerjee said … “whites and Asians are the only two groups that have above-average participation rates.”
“Wealth is the accumulation of capital over time,” Sanzenbacher said. “Home. Retirement accounts. Checking and savings. And that amount is much more unequal, with Black households having probably 15% to 20% of the wealth of white households.”
In an attempt to curb the “retirement crisis” that leaves 54% of Black Americans without the funds to retire, TIAA has launched the “Retire Inequality” initiative.
“A large portion of all Americans won’t have enough in retirement,” Simms added. “You pull back the layers and find that the problem is even more pronounced for some minorities. Our focus has been: What can we do as an organization to help people save?”
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