Millions of Americans of all different ethnicities are being affected by the financial crisis that has hit hard in the U.S in recent years, and cultural differences in attitudes toward debt and savings may shed light on the nation’s “retirement crisis,” according to a new retirement study by ING Retirement Research Institute (NYSE:ING). The study revealed rapidly disappearing pensions and consumer debt that has impeded many individuals’ ability to save for retirement.
The ING study examined the financial activity and attitudes of 4,050 adults age 25-69 with household incomes of $40,000 or higher. The study’s criteria required that the adults work full-time, and are Caucasian, African American, Hispanic, or Asian.
There are more similarities than differences between the populations in terms of their spending and saving habits as well as their plans for retirement, according to ING. While a majority (88%) of survey respondents are offered and contribute to defined contribution plans, 36% said they don’t know how to achieve their retirement goals; all the different ethnic populations responded within 10% of these numbers.
All of the respondents lacked the knowledge and education required to invest in a retirement plan, suggests the survey, although the Asian population appears to take the lead in saving money and avoiding debt.
One-third of African Americans named high debt as a common barrier to saving, compared to just 16% of the Asian population who said they’re challenged by high debt.
Across all ethnic groups, however, debt is a prominent factor impeding productive savings. A total of 40% of all individuals in the study are carrying consumer debt. The highest percentages of debt are in the Hispanic (46%) and African American populations (43%), meaning nearly half of these two ethnic populations are in significant consumer, according to the survey.
Aside from this, disappearing traditional pension plans have the potential to affect an individual’s retirement goals. Statistics between each group were quite disparate in the pension plan segment of the study. For instance, 49% of African Americans are eligible for traditional pensions, compared to just 35% of Caucasians. The Caucasian population trailed all other ethnic groups by a significant margin.
View the study here.
Written by Melissa Zief