Investor surveys and research strongly suggest 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.
Experts attribute lower investment rates to poor instruction on financial topics in public schools and misconceptions about the risk of stocks within parts of the black community. Employers also have been urged to tailor their messages on retirement savings to account for what some black and Latino executives say are important cultural differences. And the federal government has been urged to strengthen its national strategy for financial literacy, which has been criticized as ineffective.
A survey by Charles Schwab Corp. and Ariel Mutual Funds concludes four in 10 African Americans with household incomes of $50,000 or more have no money in stocks, compared to just one quarter of whites.
A separate survey of retirees found whites are nearly twice as likely to have $100,000 or more saved than blacks, even when education, peak income level and other factors are held constant.