Opportunity Beckons In African-American Retirement Savings
When life insurers try to sell annuities and other insurance-based retirement savings products and services to African-Americans, one of the toughest competitors they face may be the mattress.
Only 18% of the all U.S. residents who participated in a 2001 retirement survey conducted by the Employee Benefit Research Institute, Washington, said they kept retirement savings “in a safe place at home or safe deposit box.”
But a companion survey found that 37% of the African-American participants reported keeping retirement savings in the form of currency.
Annual surveys commissioned by Ariel Capital Management Inc., Chicago, and Charles Schwab & Company, San Francisco, have revealed that even African-Americans with household incomes over $50,000 are painfully skeptical about the trustworthiness of financial advisors and financial investments.
Fifty-six percent of the African-Americans interviewed in 1999 agreed with the statement that investing in stocks is “just like gambling,” compared with 35% of the whites.
In 2000, 58% of the African-Americans agreed that financial advisors were more interested in making money than in giving good advice, compared with 45% of the whites.
Similarly, in 1998, 63% of the African-Americans described themselves as conservative investors, while only 53% of the whites described their investing style that way.
Kareim Cade, a partner at M.L. Garland Hill Agency, Detroit, questions whether African-American workers have retirement savings preferences that are really much different from those of white people with similar incomes, asset levels and educations.