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Study on Savings By Blacks and Whites Reveals Shades of Gray

Ariel and Schwab's surveys suggest it's not just investing laziness or fear of the stock market that accounts for the percentage difference in total amount invested for retirement.

In the 1999 survey, Ariel and Schwab found that African American household incomes must stretch further to support more people, including more school-aged children and extended family members.

In that year's survey, 27 percent of black respondents said they were financially supporting friends or family beyond those living in their own home. That's compared with 12 percent of white households. That percentage was consistent in subsequent surveys.

In the 2006 survey, a higher percentage of blacks said they were taking care of adult children or aging parents.

That year's survey also found that blacks who are concerned about saving for their children's educations or worried about caring for elderly parents are considerably less likely than whites to be saving even $100 per month for retirement.

In this year's survey, black respondents were again more likely than whites not to be investing because of concerns about paying for education and for day-to-day expenses.

Lost in the headlines is this fact gleaned from the survey: A larger percentage of middle-class blacks than whites work for employers such as the government that tend to provide traditional pensions plans.

In last year's investor survey, three times as many African Americans as whites (29 percent compared with 10 percent) said they planned to start a business after they retire. Wouldn't that provide them with needed retirement income?

A higher percentage of blacks than whites own real estate other than their home (42 percent compared with 33 percent), and of these, a greater share of blacks (58 percent compared with 48 percent) say they expect these investments to help fund retirement.

When we look at these surveys, we have to ask who is paying for them. Ariel and Schwab are investment companies. Of course they want to see more people invest. That translates into more business for them.

Still, I believe the overall message from the two companies is valid. Investing is important and should be a key component of a diversified retirement portfolio. It is for me.

What concerns me is the portrayal of blacks as culturally inept at understanding the importance of building wealth for retirement. But as Ariel and Schwab write in the report, "While whites have saved considerably more than blacks, the harsh reality is they, too, are underinvested and ill-prepared for retirement."

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