Americans of all backgrounds think about retirement in similar ways, calculating how much money they'll need and how long they have to save. Yet stark differences exist when it comes to savings rates, confidence in retirement plans and other key measurements of readiness.
The TIAA Institute's new State of Financial Preparedness report raises questions about whether or not incoming retirees will enjoy financial security, particularly as lifespans continue to lengthen and the economy remains tumultuous. Most Americans have a similar idea of what retirement preparedness means to them, but the way those plans unfold differ greatly.
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Overall, two-thirds of Americans (67%) have at least some money invested in retirement accounts, but 1 in 4(23%) don't know how much they've saved. That's true for 24% of retirees and 22% of those planning to retire. In terms of retirement account ownership/possession, there is a vast divide between demographics:
- 76% of white Americans have a retirement account
- 71% of Asian Americans/Pacific Islanders have a retirement account
- 49% of Black Americans have a retirement account
- 52% of Hispanic Americans have a retirement account
Fewer than half (47%) of those scheduled to retire are confident they'll do so when planned. Roughly 30% of white Americans and Asian Americans/Pacific Islanders have saved at least $250,000 for retirement, which is nearly double the number of Hispanic (17%) and Black Americans (16%).
Beyond retirement savings, there are also some big differences when it comes to measuring investable assets. Americans are more than twice as likely to have less than $50,000 (44%) as they are to have saved at least $500,000 (19%). In total, 15% have no liquid investable assets at all, including:
- 26% Black Americans
- 26% Native Americans
- 25% Hispanic Americans
"We've long talked about retiring inequality, but this new data does more to identify gaps, challenges and opportunities," said Surya Kolluri, head of the TIAA Institute. "If most people are planning for retirement but can't follow their plans, that's a call to action for employers, policymakers, financial advisors, retirement services providers and others. We need to better identify the steps we must take to give people the resources they need."
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