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Retirement's racial divide: Blacks less prepared
Old 10-15-2007, 03:30 PM   #1
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Retirement's racial divide: Blacks less prepared

Obviously it is full of generalizations, but this article is thought-provoking: Retirement's racial divide: Blacks less prepared - Personal Finance - MSNBC.com.

I certainly agree with this extract:

Quote:
“We need to push past the discomfort,” she said. “Everybody ought to feel a certain level of anxiousness around America’s preparedness for retirement, because every chain is as strong as its weakest link.”
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It Probably has more to do with Culture and Economics than Race
Old 10-16-2007, 11:33 PM   #2
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It Probably has more to do with Culture and Economics than Race

Growing up, I don't EVER recall any conversation about the stock market among our family and relatives. Insurance, real estate and savings bonds I do recall, and of course basic savings accounts. Growing up in DC and nearly everyone working for the gov't had a lot to do with that also. When I started my private industry job, I remember vividly when the 401k became available and I explained it to my brothers........they frowned at the idea of being in the stock market, but they've done very well with rental properties.
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Old 10-17-2007, 01:08 AM   #3
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my family was never much into stocks and bonds. mostly they were into work & work. i think the only reason i invested early into 401k was because of the company matching program. mom might not have known to teach me much about finance but she didn't raise no fool.
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Old 10-17-2007, 06:18 AM   #4
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I am not sure what can be concluded from this....it indicates that less whites in the study were covered by pensions (1/2 vs. 2/3)....I would have to bet that folks that work for utilities and government with more guaranteed pensions are going to save less on their own...
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Old 10-17-2007, 10:46 AM   #5
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Originally Posted by maddythebeagle View Post
I would have to bet that folks that work for utilities and government with more guaranteed pensions are going to save less on their own...
That makes sense. Since a pension can be viewed as a form of forced savings, any beneficiary is already putting money aside and has less motivation to invest disposable income.

On the other hand, a pension can be looked upon as a quasi-fixed income investment; so a pension beneficiary has an incentive to take on more risk by holding 100% equities in whatever portfolio they may have.
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Old 10-17-2007, 11:01 AM   #6
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I didn't read the article, however I wonder if the conclusion of the article has been sorted by income levels.

Should the conclusion be that poor people or low income people (including many poor black people) are less prepared for retirement.
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Old 10-17-2007, 02:51 PM   #7
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FWIW, here is what the article says on that issue:

Quote:
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.
[emphasis added]
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Old 10-18-2007, 08:33 AM   #8
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Originally Posted by Milton View Post
That makes sense. Since a pension can be viewed as a form of forced savings, any beneficiary is already putting money aside and has less motivation to invest disposable income.

On the other hand, a pension can be looked upon as a quasi-fixed income investment; so a pension beneficiary has an incentive to take on more risk by holding 100% equities in whatever portfolio they may have.
I'm one generation removed from poverty so food, shelter and clothing got considerably more attention in my family than finances. I think a lot of the disparity mentioned in the article has to do with a sizeable class of blacks entering into the middle-class for the first time over the last 40 years, many blacks obtaining jobs at employers (public and private) with defined benefit plans, misguided trust in Social Security to handle all or most of your retirement needs, and just plan lack of financial savy.

I would think that poor and rich people, irrespective of race or ethnicity, would basically have the same rate of savings. And that the disparities highlighted in the study suggest that "discretionary" income, in general, is deployed by middle class people quite differently according to their race and ethnicity. Hey, I'm pretty sure the "homeownership" levels of the middle class for many years had significant disparities according to race and ethnicity -- many reasons for that too. But playing "catch-up" is a bitch, aint it?

Milton, is that Dorie Miller you're showcasing in your handle?
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