The Race Savings Gap

For nearly a decade, Ariel Capital Management LLC and Charles Schwab Corp. have studied the investing habits of African Americans who earn more than $50,000 a year.

The results of this year's survey concerned both companies.

The survey found that many African Americans are counting on getting a pension to live on in retirement. Or they expect to live off the equity in their home or income from investment properties. Some hope to start a small business, which will then help fund their retirement.

Increasingly missing from their retirement plans are investments in stocks or bonds.

"Black investors have focused on real estate and have not incorporated the stock market to the same degree as their white counterparts," said Lisa Toppin, director of human resources and diversity programs for Schwab.

The percentage of higher-income African Americans with stock investments is trending downward, from a high of 74 percent in 2002 to 64 percent this year. The proportion of higher-income whites with stock investments stands at 83 percent, virtually unchanged since the first year of the jointly sponsored survey, 1998.

Ariel and Schwab have a vested interest in pushing the merits of stock market investing. But that doesn't mean they aren't on to something.

None of us can afford to count on just one type of retirement pot -- be it a pension, real estate or the prospect of running a profitable small business.

African Americans have far less money saved in retirement accounts than whites. Their median amount saved is $59,000, vs. $93,000 for whites. They also contribute less to their retirement accounts monthly. (The median monthly contribution is $254 for black employees, compared with $306 for whites.)

Some black workers may have less saved because they are counting on getting a pension, the survey found.

In the latest investor survey, two-thirds of employed blacks -- compared with about half of employed whites -- work for organizations with a traditional pension plan. Far more black than white workers surveyed (44 percent vs. 25 percent) have jobs in government, which are more likely to offer pensions.

But there is no assurance that the benefits for a traditional pension plan won't be changed for the worse or taken away. Just look at the corporate world.