Mi­nori­ties close the re­tire­ment sav­ings gap

Con­ver­sa­tions about money can lead to greater peace of mind

Chicago Sun-Times - - MONEY - Tan­isha Sykes Spe­cial for USA TO­DAY

It was the news that changed Der­rick Hard­ing’s per­spec­tive on fi­nan­cial plan­ning for­ever.

In 2014, Hard­ing, a 70- year- old African-Amer­i­can re­tiree in Mi­ami, was di­ag­nosed with leukemia. Then he suf­fered a brain aneurysm and a sev­ered artery dur­ing his hos­pi­tal­iza­tion.

“Luck­ily, I had in­sur­ance to cover the ex­penses, but it showed me that life can change in an in­stant and you have to be fi­nan­cially pre­pared,” he says.

It also taught Hard­ing a les­son about the im­por­tance of talk­ing about money with your fam­ily.

“Prior to the di­ag­no­sis, I had brief chats with my fam­ily about the im­por­tance of sav­ing early and the dan­gers of over­spend­ing,” Hard­ing says. Now, he has reg­u­lar check- ins with his wife and three sons and fi­nan­cial plan­ning meet­ings with fam­ily mem­bers twice a year.

Hard­ing is not alone in his quest to make fi­nan­cial plan­ning con­ver­sa­tions a pri­or­ity among fam­ily mem­bers. Ac- cord­ing to an Ip­sos/ USA TO­DAY sur­vey of 1,250 adults ages 45 to 65 con­ducted in mid- Jan­uary, some mi­nori­ties say they are ac­tively dis­cussing re­tire­ment plan­ning with their fam­i­lies more than their white coun­ter­parts.

In fact, 50% of His­pan­ics and 43% of African Amer­i­cans polled re­port talk­ing to their fam­i­lies about re­tire­ment plan­ning com­pared with 40% of whites.

“It’s the evo­lu­tion of time, ed­u­ca­tion, op­por­tu­ni­ties and ac­cess to in­for­ma­tion,” says Ivory John­son, CFP, founder of De­lancey Wealth Man­age­ment in Wash­ing­ton, D. C. “In­for­ma­tion lev­els the play­ing field.”

There’s more to the story. While some mi­nor­ity fam­i­lies are talk­ing about fi­nan­cial plan­ning more of­ten, oth­ers are still try­ing to jump- start the di­a­logue.

In the In­dian com­mu­nity, for ex­am­ple, re­tire­ment plan­ning con­ver­sa­tions take place early and of­ten. “The mind­set is very dif­fer­ent when it comes to money in the In­dian fam­ily house­hold,” says Di­vam N. Me­hta, CFP, founder of Me­hta Fi­nan­cial Group in Glen Allen, Va. Of­ten, im­mi­grants leave their home­land to succeed in the U. S., both for them­selves and fu­ture gen­er­a­tions.

“From a young age, most par­ents are ac­tively ed­u­cat­ing their chil­dren on the im­por­tance of money man­age­ment with an em­pha­sis on sav­ings,” Me­hta says.

Deb­o­rah Her­rand, a 42- year- old His­panic teacher and sin­gle mother in Queens, N. Y., says it’s im­per­a­tive to have these talks with your fam­ily.

“Fi­nan­cial se­cu­rity gives you peace of mind. I am al­ready hav­ing con­ver­sa­tions with my young son about set­ting goals and mak­ing sac­ri­fices to achieve his dreams,” she says. De­spite giv­ing her son money man­age­ment tips, Her­rand ad­mits it’s still dif­fi­cult to talk to her par­ents and sib­lings.

Ac­cord­ing to fig­ures from the 2013 Fed­eral Re­serve Board’s Sur­vey of Con­sumer Fi­nances, in 2013, white house­holds saved a me­dian amount of $ 76,300 in re­tire­ment ac­counts, com­pared to a me­dian amount of $ 23,200 in non- white house­holds.

In African- Amer­i­can fam­i­lies, younger gen­er­a­tions are hav­ing more money con­ver­sa­tions.

“You men­tion the im­por­tance of hav­ing good credit to col­lege kids, and they re­spond, ‘ of course I have to have good credit,’ ” John­son says. “Whereas my gen­er­a­tion was talk­ing about ‘ How can I make more money?’ the younger gen­er­a­tion is ask­ing, ‘ How can I build more wealth?’ ”


More mi­nor­ity fam­i­lies are talk­ing about fi­nan­cial plan­ning.

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