Black Americans face many negative stereotypes and disadvantages over their white counterparts.  One difficulty Americans of all cultures face is saving for retirement.  There have been many studies done that conclude that black Americans have less money saved for retirement than white Americans.  The undertone is that black Americans are less responsible with their money and value retirement less than their white counterparts.  Our study shows this is not true.

We asked both white workers and college-educated black Americans to respond to a survey regarding what percent of their income they save for retirement, how much they save in total, and how much importance they place on saving.  Our findings were interesting and showed that while black Americans save less in total dollars than their white counterparts, they save a higher percentage of their total income and place a higher value on the importance of saving for retirement.  See the results of our survey of Caucasian workers and our survey of black college-educated workers.

Why We Conducted This Survey

Saving for retirement is important.  Living costs are skyrocketing and pensions are a relic of the past.  Meanwhile, life expectancy is rising with better medical care and people are commonly living past age 90.  Social security is underfunded, so people really need to save a lot of money or work well into their golden years to make sure they don’t run out of money.

There has been a lot of research, and press showing that black Americans save less money and have less money in retirement accounts than white Americans, like this survey from the Center for Global Policy Solutions.  This survey demonstrates that the average working white family age 35-44 have $57,822 saved for retirement while the average black family of the same age group has only $16,508.  Separately the study looks at average pay across education levels between white and black families and shows that black families earn less.

The negative connotation is that black families both earn less and are less willing to save for retirement than their white counterparts, but according to our survey this is only partially true.  While black families do save less in total, they actually value retirement savings more and are more willing to commit a high level of income to save than white families.

Previous research has shown that education levels have a significant effect on readiness for retirement.  Also significant, while 33% of white Americans attain a bachelor’s degree, only 22% of black Americans achieve the same level of education according to 2015 government census data.  Combined with lower incomes earned across the same level of education, it is no wonder that on average, black Americans save much fewer total dollars than white Americans.  Black Americans save less because they are in a disadvantaged position, not because they are less willing to save.  This is an important distinction to draw.

Our Findings

In terms of income earned, there is no question that white workers earn more than college-educated black workers.  We found that while 51% of the Caucasian people we surveyed make more than $50,000 per year.  Alternately, 64% of the black workers we surveyed make less than $50,000 per year.  There is no question that this puts white workers at a distinct advantage in saving.  Even if white and black workers saved the same percentage of their money, white workers would far outpace the black ones.  Here we illustrate the results of our surveyed income distribution.

Income distribution for surveyed black workers
Income distribution for white workers surveyed

There is no doubt that this disparity led to a distinct advantage for white workers in terms of total dollars saved to their retirement accounts.  Significantly, 48% of our white workers surveyed saved at least $3,000 per year.  Conversely, only 37% of college-educated black workers were able to save $3,000 or more.

Total annual savings for black workers
Total savings for white workers

Black Workers Save More of their Income and Value Retirement Savings More

What might be surprising to some is that our survey found that black college-educated workers actually saved a higher percentage of their income than their Caucasian counterparts.  Only 10% of college-educated black workers save less than 2% of their income for retirement whereas 28% of Caucasian workers save less than 2%.  Of those surveyed, we also found that 40% of black workers saved 10% or more, while only 24% of Caucasian workers did the same.

Percentage of income saved for retirement by college-educated black workers.


Percentage of income saved for retirement by Caucasian workers.

This clearly indicates that black workers value retirement savings more than white workers.  We also asked our survey respondents to rank their feelings about how highly they value saving for retirement.  As may be expected given these results, college-educated black workers valued saving more highly, with an average score of 4.19 compared to 3.79 for Caucasian workers.

What This Means

This means that the reported gap in retirement savings between Caucasian workers and Black workers can mostly be attributable to lower income levels for black workers compared to white workers.  When black workers are similarly educated on retirement savings, our survey indicates that they are actually more likely to save a higher portion of their income than white workers.

This also serves to dispel stereotypes that white workers are somehow more thrifty or responsible with their retirement savings than their black counterparts.  On the contrary, it appears that black workers are every bit as retirement savvy.  Gaps in savings should therefore be addressed with education and reductions of the “wage gap” which is very significant as black workers earn approximately 25% less than white workers overall, according to the Federal Reserve Bank.

Leave a Reply

Please fill all the fields below (your email won't be displaied on the site).