Two-thirds of employed blacks participate in traditional pension plans, compared with roughly half of white workers, according to the 2006 Black Investor Survey from Ariel Capital Management and Charles Schwab. At the same time, most black and white respondents said defined benefit plans will no longer exist in a decade.
"More African-Americans work for government entities that offer defined benefit pensions," said Lisa Toppin, director of diversity at Charles Schwab.
Mellody Hobson, president of Ariel Capital, said blacks are "underinvested" and ill-prepared for their retirement. According to the survey, the median black worker has saved $59,000 for retirement, while the median white worker has saved $93,000.
"There's a gaping hole between the two groups," said Ms. Hobson. "By saving less, and also by investing more conservatively, many African-Americans are missing out on years of compounding — some of the most powerful years of their lives."
The survey queried 500 black and 500 white individuals over the age of 18, with a minimum household income of $50,000 per year.