Knowledge for LIFE membership

Become a member of Knowledge for LIFE and receive our monthly newsletter and event updates

Knowledge for LIFE Membership


Saturday, March 5, 2016

The 401(k) Boom Has Been Disastrous For People Of Color

The 401(k) Boom Has Been Disastrous For People Of Color | ThinkProgress
It used to be that most American workers could expect guaranteed checks in retirement thanks to a pension, or what economists call a defined-benefit plan. But in the 1980s, the country went through a major shift, with employers ditching pensions in favor of 401(k) accounts. Those accounts, known as defined-contribution plans, don’t guarantee payouts, leaving it up to the employees to enroll, contribute, and make smart investment decisions to ensure they’ll get enough money in old age. The shift from pensions to 401(k)s hasn’t just left Americans in a riskier situation. It’s also created huge gulfs between what well-to-do, white workers can save up for retirement and what people of color and low-income workers have in their nest eggs. According to a new report from the Economic Policy Institute, “retirement disparities have grown with the shift from traditional pensions to retirement savings accounts.” People who are rich, white, college-educated, and married are far more likely to participate in a 401(k) plan than others. More than two-thirds of people in the top fifth of the income distribution are enrolled in 401(k)s, compared to just 4 percent of the poorest fifth; about half of white workers are enrolled, versus 32 percent of black workers and 20 percent of Hispanics. While there are also disparities in pension use, it’s far starker among defined-benefit plans.

No comments:

Post a Comment

Contact Us

Name

Email *

Message *

DISCLAIMER

Know4LIFE's Raw Info. is a blog designed to bring alternative news and information that is relevant to the Black and disadvantaged communities. As such, any and all views and opinions expressed herein, regardless of authorship, do not represent the views or opinions of any author's employer or people, institutions or organizations that the author may or may not be related to or affiliated with unless explicitly stated otherwise. Raw Info. includes links to other sites/blogs operated by third parties. These links are provided for convenience and informational purposes only. As such, the information, opinions, products, and/or services contained therein do not reflect the views and opinions of or represent endorsement Know4LIFE. All images that appear on Raw Info. are under the copyright of their respective owners. Know4LIFE does not claim credit for any image unless explicitly stated. If you own the rights to any image appearing on Raw Info. and do not wish for it to appear, please notify Know4LIFE immediately and the image shall be promptly removed.