A recent Trends in Retirement Security by Race/Ethnicity study by the Center for Retirement Research at Boston College showed what many minorities already know: as a group, minorities are less prepared for retirement security.
The report studied how different groups have fared financially since the recession of 2008. The study examined the wealth holdings and the medial household earnings of white, black, and Hispanic households. It revealed that while all groups saw their funds decline significantly, white households have rebounded better than black or Hispanic households, with Hispanics faring the worst.
According to the study, in 2007, white households held a median net wealth of $183,100 with median household earnings of $63,900. Black households held $39,00 in median net wealth with $39,100 in earnings. Hispanic households held $59,300 with income of $44,000.
By 2016, white households had $132,100 of net wealth with $67,200 in median earnings. Black households had $18,300 in net wealth and $37,000 in median earnings. Hispanic households held $24,400 in net wealth and median earnings of $38,000.
The significant drops in both total net wealth and median household earnings means minority families have less money to pay for everyday costs and little if any income left to save for retirement. And although the study did mention that at the moment Social Security will up the replacement rates for low earners, that’s little comfort for families who aren’t able to save for their futures right now.
The study estimates that half of all households in the United States are at risk for being prepared for retirement, the figures are different for each group. About 48 percent of whites, 54 percent of blacks, and 61 percent of Hispanics are at risk of not having enough to fund their retirement years. And if you are a caregiver to someone and a nurse, you have a distinct challenge.
What does that mean for retirement security and making good financial decisions? Saving any money at all is better than saving nothing. Taking a hard look at where your money goes now is a good first step. Then set a goal. If you want to save $50 a month, you’ll either need to reduce your spending or make more money. That could mean eliminating some things like buying take-out food or drinks. Coffees, sodas, and iced teas are rarely worth the price away from home. Packing meals and snacks to bring to work or to tide you over for a long day of clinicals and classes also makes a difference. Examine your cable bill, your phone costs, your entertainment expenses, and clothing expenses. Keep only what is absolutely necessary.
If there’s little space to reduce your expenses, think of ways to bring in a little more income and put it aside for retirement. Whether it is selling clothes online, tutoring nursing students, or taking a short-term consulting job, extra income can make a big dent in retirement goals.
Whatever you do, don’t sell yourself short. You are saving for your own future, and that alone is worth making it a priority.