Between 1997 and 2005, numerous polls were conducted to assess the views of the U.S. population about savings behavior, expected sources of retirement income, and the status of the Social Security system. This report examines findings from these polls for African Americans, white Americans, and persons of all races (combined) and makes comparisons across racial/ethnic groups as data allow. The vast majority of these polls surveyed the general population without disaggregation by race. For example, 38 polls of persons of all races (combined) conducted between 1999 and 2005 were identified that included a question about optional stock market investment by individuals to foster the solvency of the Social Security system. However, only four polls (two by the Joint Center for Political and Economic Studies, one by AARP, and a survey series by Ariel Mutual Funds/Charles Schwab & Company, Inc.) were identified that surveyed either African Americans alone or African Americans along with other racial groups about this issue. As a result, racial comparisons cannot be made for all issues.

Despite these challenges, this analysis of public wealth-related knowledge and savings behavior reveals that many individuals do not have adequate personal savings and investments for retirement. This information powerfully demonstrates the need for social insurance, in particular for the Social Security program. In addition, knowledge gleaned from surveys about various racial/ethnic groups' views of Social Security reform proposals can help guide the development of reform proposals that address the needs and concerns of these groups. The major findings of this report are presented below.

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Date Published: April 2007
 

In an era when financial security during retirement depends largely on personal savings and investments, African American and Hispanic employees of companies that offer 401(k) plans risk financial insecurity during their "golden years." Compared to Asian and white employees, African American and Hispanic workers are less likely to participate in 401(k) plans, and when they participate they are likely to contribute less; they also are more likely to deplete their savings by taking loans and withdrawals from their accounts. The report 401(k) Plans in Living Color: A Study of 401(k) Savings Disparities Across Racial and Ethnic Groups--The Ariel/Hewitt Study features details about these savings disparities, based on information collected for 2007 for nearly three million employees of 57 of the largest U.S. companies across a variety of industries and sectors. Recommendations to narrow the savings disparities are provided in the report as well.

This study was conducted by the Ariel Education Initiative (the nonprofit affiliate of Ariel Investments) and Hewitt Associates (a global human resources consulting and outsourcing company), in collaboration with the Joint Center for Political and Economic Studies, the National Council of La Raza, the National Urban League, the Chicago Urban League, and the Raben Group.