Continued economic uncertainty has led all workers to dip into their retirement savings, but minorities have been the hardest hit, according to a new study.
Ariel Education Initiative, a nonprofit affiliate of Ariel Investments and Aon Hewitt, the global human resources business of Aon Corporation (NYSE: AON), Chicago, published this finding in a summary of results from a study that compares the retirement savings of African-American and Hispanic employees with their Asian and white counterparts. The Joint Center on Political and Economic Studies and The Raben Group also collaborated on the The Ariel/Aon Hewitt study, “401(k) Plans in Living Color II,” which examines the defined contribution plans of 60 large U.S. organizations, representing 2.4 million employees.
The report finds that more than two-thirds of workers who took a withdrawal in 2010 reported they needed the money for an unexpected emergency, debt or day-to-day living expenses.
But African-American employees took hardship withdrawals more than any other ethnic group. Nearly 9 in 10 (8.8%) of African-Americans took hardship withdrawals in 2010, compared to 3.2% of Hispanics, 1.7% of whites and just 1.2% of Asian workers.
Half of all African-Americans and 40% of Hispanic employees carried a loan balance at the end of 2010, compared to just 22% of Asians and 26% of whites, the report adds.