The role race plays in planning for retirement

June 21, 2023

male financial professional consulting with african-ammerican couple

Retirement guidance that doesn’t consider factors such as race and ethnicity is incomplete. Not every experience with money or employment is universal, so financial planning that’s inclusive of ethnicities, family makeup and life circumstances is vital to help ensure everyone gets a fair chance at thriving in retirement.

In recent years, many financial experts have sounded the alarm over the general lack of retirement savings Americans face. But some research, detailed below, is showing that minorities and marginalized groups in particular are facing disparities that could threaten their ability to fund their retirement.

What role is race playing here, and how can retirement planning offer better inclusivity?

What recent research shows

Saving for retirement has to begin with fair compensation in the workplace. Unfortunately, racial disparities exist here, according to a study on young adults and their employment paths conducted by the Brookings Institution. 

Their findings saw Black and Latino or Hispanic adults in their respective highest-earning trajectory group earning only 68% to 75% of the average annual earnings of White adults (based on Child Trends analysis of the National Longitudinal Survey of Youth 1997).1 

Current national wage data shows racial disparities, too. According to the U.S. Department of Labor, Black workers earn 76 cents to the dollar of White workers.2 With Native Americans, that number is up slightly to 77 cents, while Hispanic workers earn just 73 cents to the dollar.2

Access to retirement plans is a major concern as well. A study conducted by AARP determined that around 64% of Hispanic workers, 53% of Black workers and 45% of Asian American workers lacked access to an employer-provided retirement plan.3

And it’s not only inequality and lack of opportunities that factor into financial planning and decision making; surveys demonstrate that specific financial worries can vary between different ethnic groups. 

Our own research looking at financial planning through a multicultural lens found that a top concern among Black survey respondents is paying off loans, while the top financial concern of Native American respondents is paying monthly bills.4

This survey also discovered differences in the types of products and accounts people have. According to our study:4

  • Hispanic consumers are more likely to have debit cards
  • Asian consumers are more likely to have checking, credit cards and investments
  • Native American consumers typically have fewer financial products
  • Black consumers are more likely to leverage loans, life insurance and payment protection

And when it comes to seeking outside counseling for their monetary concerns, we found that Multiracial, White and Black consumers were more likely to work with a financial advisor.4

What can financial professionals do to address inequalities and different concerns among ethnicities when planning for retirement?

How to start bridging the racial gap to ensure everyone’s needs are addressed

Racial inequality has been a struggle from the beginning of history, and systemic functions that perpetuate such inequalities won’t be solved by financial professionals alone or overnight. 

Fair wages start at the employer level, when businesses make sure employees are paid equally for the same work. Plus, offering inclusive employee retirement plans is often a key benefit and way to attract top talent.

But let’s focus on the impacts financial professionals can have on a more immediate scale. Here are a few tips to get started.

Have an open mind

Your experience is your experience. Employees’ and clients’ experiences are theirs. Even if they are different, both are valid. It’s important to carry an open mind when meeting with clients or employees to discuss their needs and primary financial concerns. Empathy and compassion are crucial.

Connect with the community

Reach out to people from varying backgrounds and discuss their perspectives and what they’re seeing in the financial world. Are there organizations you can build relationships with that can help you learn more about different experiences? We encourage you to conduct research and find where you can start connecting.

Take a human approach to marketing financial products

Keep an empathetic attitude when marketing retirement plans or other financial products, being sure to address as many diverse financial concerns as possible.

No matter what you do, it’s vital to consider different cultural needs and perceptions when selling products and offering financial guidance. With your help, more workers may start to have a better chance at saving what they need for more enjoyable—and financially secure—golden years.


1The Brookings Institution, Diverging employment pathways among young adults, accessed May 2, 2023
2U.S. Department of Labor, Earnings Disparities by Race and Ethnicity, accessed May 2, 2023
3AARP, Payroll Deduction Retirement Programs Build Economic Security, July 2022
4CUNA Mutual Group, What Matters Now, 2022