America’s defined contribution retirement system — 401(k)s, 403(b)s, 457(b)s and a collection of paycheck deduction IRAs — holds $10.4 trillion in assets. After home equity, retirement savings represent the second largest source of household wealth for Americans. But benefit advisers and other industry observers know that DC plans are just not creating financial security or wealth for everyone.
Per the 2019 Survey of Consumer Finances, about 60% of white families participate in retirement plans compared to 45% of Black families and 34% of Hispanic families. And for working-age families who have balances in such accounts, the typical white family has about $50,000 saved, which is 2.5 times the amount saved as the typical Black or Hispanic family, who have about $20,000 saved in retirement accounts.
