By Catey Hill
By and large, Americans of all races face the same retirement struggles. They fear they haven’t saved enough money and worry they won’t be able to retire when they want to. More than half of all Americans think it is more challenging to save for retirement than to train for a marathon (56% vs. 44%), and more than four in ten say they aren’t prepared for retirement, according a new study by ING.
But despite a number of similarities, the study found some major differences in how races approach and think about retirement.
Planning for retirement
When asked how far their financial plans stretch into the future, Asians overwhelmingly plan for a longer period of time — often decades longer — than any other race, says Fred Mackonnen, Vice President of Multicultural Sales at ING U.S. On the other hand, African Americans and Hispanics, on average, plan within a three-to-five-year window. Whites land somewhere in the middle, with a financial plan that stretches to the next generation, on average.
Saving for retirement
Even controlling for income levels, African Americans (33%) view debt as their biggest hindrance to investing and saving for retirement. That compares to 26% of Hispanics, 24% of Whites and 16% of Asians. Lack of knowledge about options for saving ranked higher among Hispanics (18%) and Asians (15%), than African Americans (9%) and Whites (11%).
Setting a savings rate
Another big discrepancy is how much people save in their employer-sponsored retirement plans, even controlling for income. Asians by far save more than other groups — an average of $324 per paycheck — while whites save just $226, Hispanics $183 and African Americans $154.
But no matter what the racial differences are, most Americans are unprepared for retirement, experts say. To help reverse that trend, Mackonnen recommends that everyone “create a road map” for how they’ll achieve their retirement goals, which includes projections on how much they’ll need to save for retirement and monthly savings goals to help them get there. Experts also recommend hiring a financial adviser to assist with planning.