| Over the years, many financial institutions have | | | | Please do not misunderstand me. I am not saying that |
| conducted studies to get a better understanding of the | | | | it is financially possible for all households to save. I |
| true state of the retiree in the coming years. The | | | | realize that a lot of families, in all ethnic backgrounds, |
| results appear troubling. If workers do not change their | | | | are living from check to check. Many are focused on |
| courses of action soon, many households are headed | | | | just getting through the day. |
| for financial problems in their most critical years - during | | | | However, what really brought this to my attention was |
| retirement. | | | | the fact that the study was able to hold those |
| Employees don't understand fees | | | | demographics constant and still find that African |
| According to a recent survey, many retirement plan | | | | Americans were less likely than their White |
| owners realize that fees are an important | | | | counterparts (in the same age and income bracket) to |
| consideration in choosing 401(k) investments. However, | | | | save and invest. |
| similar to our lack of understanding about credit cards | | | | The study found that over the last decade, White |
| and their fees, many employees do not know how | | | | investor participation has increased while |
| much they are paying in fees and expenses with their | | | | African-American investing has not changed. Just over |
| retirement accounts. Many also do not feel | | | | half of African Americans are investing in the stock |
| knowledgeable about the impact that these fees can | | | | market. That is such a small number in an age of |
| have on the growth of their retirement savings. | | | | technology, where we have so much access to |
| The survey of retirement plan owners found that | | | | information. |
| about two in three people reported that they did not | | | | Identifying some of the problems |
| pay fees with their 401(k) plans. Almost two in 10 didn't | | | | Part of the problem is a lack of planning, and this is a |
| know whether they pay fees. That amounts to 83% | | | | problem across all cultural and ethnic lines. The study |
| of people not understanding one of the most important | | | | found that about 45% of African Americans and 57% |
| savings vehicles that they have for protecting their | | | | of Whites calculated how much they would need to |
| financial future. | | | | save in order to retire. That means that more than half |
| African Americans are at risk | | | | of workers are guessing or gambling with their futures. |
| Another study found that African-American retirement | | | | Another problem is priority. The study noted that |
| strategies are specifically at risk. In looking at the study | | | | fewer African Americans see retirement as a priority. |
| on current retirees, three very critical observations | | | | They are saving less because they are more worried |
| stood out for me. | | | | about day-to-day expenses. |
| First, the study found that African-American retirees | | | | This sounds like many of those surveyed are focused |
| are drawing about 10% less in retirement monies than | | | | on instant gratification and making sure today is OK, |
| their White retiree counterparts. Second, they are also | | | | rather than finding a balance between enjoying today |
| relying more on Social Security and employer pensions | | | | while preparing for tomorrow. |
| to fund their retirements, rather than on retirement | | | | Again, I am not referring to families who are struggling |
| plans and other savings and investments. Finally, the | | | | to make ends meet. I am only speaking of those who |
| study found that African Americans have saved, on | | | | could actually be doing more than they are doing now. |
| average, only one-third of the funds saved by White | | | | The studies show that we need to plan more and get |
| retirees. | | | | our priorities in order. A failure to do so over the last |
| Granted, it could be argued that less working income | | | | ten years has caused a lack of progress. Let's be |
| could play a strong role in these three observations. I | | | | proactive and not let this next decade pass us by. |
| would agree with that statement - on the surface. | | | | |