After a lifetime of working, millions of Americans, and minority workers in particular, face the prospect of a difficult retirement because they have no access to a 401(k) savings plan.
Worse yet, among workers ages 25 to 64, a majority of black and Latino workers (62 percent and 69 percent, respectively) and more than one-third of whites (37 percent) have no retirement savings, according to a study by the nonprofit National Institute on Retirement Security. The report was based on data from the U.S. Bureau of Labor Statistics' Current Population Survey and the Federal Reserve.
Researchers characterized the findings as alarming, saying many of today's workers will face economic hardship during their most vulnerable years.
"It's well documented that regardless of race, the typical working-age American household is far off-track toward accumulating sufficient savings to meet their basic needs in retirement," the study's author, Nari Rhee, said in a statement. "As we dig deeper into the data, we find an even worse situation for blacks, Latinos and Asians."
Older workers generally had better access to 401(k) plans than younger workers, the study found.
As adults got closer to retirement, their savings improved, though barely. Of those with retirement plans, white households with workers ages 55 to 64 had a median $120,000 in retirement savings in 2010, the report said. Households with minority workers in that age group accumulated just one-quarter of that amount - $30,000 in median savings.
Also troubling is that the amount of savings by minority workers didn't grow at all as they aged. It was a median $30,000 for those ages 45 to 54 as well. Median savings by white workers in that demographic was $75,000, rising to $120,000 by ages 55 to 64.
Among all races, Americans are facing a huge shortfall. Financial advisers say workers need between eight and 11 times their annual income in savings to fund a comparable lifestyle in retirement.
That's a tall order, considering that access to workplace retirement plans has been falling since the 1990s, hitting 52 percent in 2011, its lowest point since 1979.
Jean Setzfand, vice president of financial security at AARP, says it's time for companies to reverse that trend. She also points out that the study's findings underscore just how important Social Security will continue to be for Americans' retirement security.
"Employers can play an important role in providing their employees long-term financial stability through retirement savings vehicles. Unfortunately, far too many, especially multicultural segments, do not have access to these employer-provided retirement benefits, which puts their long-term financial security at risk," she says.
"Social Security is the only universal plan that continues to sustain long-term financial peace of mind for working Americans," she adds.
Among the report's other findings:
- Households with white workers (24 percent) were more likely than minority households (16 percent) to have defined benefit pension plans, which guarantee lifetime retirement income.
- Across all age groups, minority workers are half as likely as white employees (19 percent versus 41 percent) to have retirement savings that are equal to, or greater than, their annual income.
The report followed a July 2013 study that also documented a retirement savings gap among working-age households.
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