Black Americans Have Over $50K Less Saved for Retirement Than Others; 4 Tips To Help Change That

Gripping new data on retirement perhaps provides a wake-up call on why Black Americans may do well to beef up efforts to save more for the golden years.

Black retirees are tussling more than typical American retirees. The retirees on average have saved less money and are more inclined to report they did not do enough to prepare for retirement compared to their peers. The findings show why retirement savings remains a major difficulty for many Blacks.

Here are some key revelations to consider. On average, Black retirees have $120,460 saved, versus $170,726 for all retirees. Debt wise, Black retirees have more more at $26,650, compared to $19,888 overall. Some 51% of Black retirees say they have no money saved for retirement, versus 37% generally. Only 39% of Blacks who have retired say they have enough money saved for a comfortable retirement, against 47% for all retirees. The data was provided by Matt Brannon, author of a recent study on retirees’ savings.

Another discovery was Black retirees on average reported $455,844 is what the typical person needs for retirement. Yet, that estimate is over $100,000 under the $556,400 experts urge. Some 72% of Blacks say they should’ve managed their money better before retiring, versus 63% for all retirees.

Moreover, income disparities contribute to the retirement gap for people of color. Around 36% of Black retirees are considering returning to work in some form (full-time/part-time/consulting), 4% higher than those overall. Only 26% of Black retirees have a retirement account like a 401(k) or Roth IRA, versus 34%  overall. Black retirees (37%) are more likely to say Social Security is their only form of retirement versus 30% for all.

Positively, 73% of Black retirees say they’re happier since they retired, the same percentage for all.

The encouraging news is there are actions you can take to help save for retirement. Here are some tips Brannon provided to help achieve that:

  • “Devote some spare time to learn about retirement savings. If you don’t know a lot about that, start now. Take an hour or two to listen to some podcasts or watch YouTube videos from credible sources on the smartest ways to save for retirement. Experiment with some online retirement calculators. The potential benefit: Investing a little time on your retirement education can save you tens of thousands of dollars.”

  • “The sooner you begin investing, the better. Due to inflation, the true value of $1 million is about $130,000 less than it was two years ago ($868,500). The best way to guard against this is by investing early. Many experts suggest low-cost index funds as a relatively safe way to combat inflation.”

  • “Take advantage of any retirement benefits your company offers. If your employer offers 401(k) matching, they’re offering you free money that you should make sure you’re not missing out on.”

  • Even if your employer doesn’t offer retirement plans, you can still invest in something like a traditional IRA or Roth IRA. They offer different — but very valuable — tax benefits. The IRS rewards you for participating in these programs by taxing the money you devote to retirement less. Research whether a traditional or Roth IRA is right for you.”