Despite a growing optimism about their financial situations, African-Americans still participate in their employer-sponsored retirement plans at lower rates than the general population, indicating a continued need for employers to focus on retirement plan education.
Among employees surveyed for Prudential Financials African American Financial Experience study, close to three-quarters say they are offered an employer-sponsored retirement plan, showing equal and consistent numbers between the African American and general populations.
However, while a majority (74%) of African-Americans participates in the plans offered by their employer, the participation rate lags against that of the general population, where 85% participate in their employer-sponsored plan.
The biggest participation gap appears to occur among employees with household incomes of less than $75,000, Prudential notes. While more than eight in 10 of the general population in this income bracket reported participating in plans when theyre offered, only 68% of African-American employees in this income bracket reported any participation.
However, among those with a household income of $75,000 or more, these differences virtually disappear and participation balances out, according to the study.
According to Prudentials report, the most common reasons African-Americans say they dont seek professional financial are similar to those of the general population, and include a personal perception of insufficient assets, a preference to self-manage finances and perceived high fees associated with receiving professional support.
And although 39% of African-Americans reported having had contact with a financial professional, the number who say they currently work with a financial professional is 10%, compared to 26% of the general population.
The research also identifies a community that is very interested in working with financial professionals and gives clear guidance on approaches that resonate best, says Mammen Verghis, vice president, multicultural marketing for Prudential, noting that universal methods of outreach, like providing relevant financial information, are equally important to African-Americans and the general population.
The study was conducted by GfK, and is based on a poll of 1,043 Americans who identify as African-American or black and 556 general population Americans on a broad range of financial topics.
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