Business
African Americans’ wealth building hampered by competing financial priorities, lagging investment product ownership – Study by Prudential Financial
The study also points out that African Americans are more likely to live in multi-generational and female-headed households, and to be financially responsible for supporting other family members. Of those surveyed, 57 percent provide financial support to another family member. Reflecting the impact of today’s economic condition on African Americans, the survey further revealed that many African Americans are providing financial support to unemployed friends and family – nearly double the rate among the general population.
Student loan debt also was reported as a significant obstacle to wealth building for African Americans. College-educated African Americans are twice as likely to have student loan debt, proof of economic progress while at the same time hampering the ability to save or invest.
In addition, the study finds African Americans own insurance products, such as life and disability, at equal or greater rates compared to the general population, but are about half as likely as the general population to own investment products, such as individual retirement accounts (IRAs), mutual funds, stocks and bonds.
Nearly half of African Americans say they have a 401(k) or other workplace retirement plan, and 8 in 10 of those currently eligible are contributing. However, African Americans’ balances within employer plans are less than half those of the general population’s, in part due to the impact of loans and withdrawals. And 3 in 10 have taken loans from their plan, citing the need to repay other debt.
The study is based on a March 2013 poll of 1,153 Americans who identify as African American or Black and 471 general population Americans on a broad range of financial topics. Respondents are age 25-70, with a household income of US$25,000 or more and some involvement in household financial decisions. Among those meeting the survey criterion of US$25,000 or more in household income, the median household income was US$61,000. The overall margin of sampling error is +/- 5 percent for African Americans and +/- 6 percent for the general population.
About Prudential Financial, Inc. : Prudential Financial, Inc., is a financial services leader with approximately US$1.06 trillion of assets under management as of March 31, 2013, has operations in the United States, Asia, Europe, and Latin America.
