What does race have to do with retirement? Apparently plenty. A new study, Retirement Revealed,  from ING U.S. examines how cultural environment can affect one's financial situation and behavior.

While no one in America seems to be feeling terribly confident about retirement, not even those who are a lot closer to the lofty 1% than the rest of us, there remain significant differences among ethnic groups. The Retirement Revealed study shines the spotlight on the differences between Asians, African Americans and Hispanics (as compared to an overall set of 4,000+ U.S. respondents), when it comes to retirement saving, planning and preparedness.

ING's research showed that Hispanics feel the least prepared, with 54% indicating that they feel "not very" or "not at all" prepared. This compares with 50% of African-Americans, 48% of whites and 44% of Asians polled who said they don't feel prepared. The feelings make sense when you look at the amount save in employer-sponsored retirement plans, where Hispanics reported having the lowest average balance ($54,000) in their retirement plans. This amount was notably lower than the average balance across all groups, ($69,000). The top savers were Asians, who had the highest average balance of $81,000.

Savings shortfall

What's getting in the way of saving?

Nearly three-quarters (73%) of those surveyed admitted having barriers to saving. Among the groups, African-Americans said debt was their biggest obstacle. More than 60% of African-Americans said that whittling away their debt was their most important short-term financial goal. Needing to know more about their savings options is a greater barrier to savings for Hispanics than for any other group.

Fail to plan, plan to fail

The Hispanics said they were less focused on their future retirement goals — well over half (57%) have never done the math to come up with a figure for how much money they'll need to mirror their current lifestyle later down the road. Seventy percent didn't have a formal investment plan to reach their goals. In fact, only 29% of all who shared their thoughts said they had a formal investment plan. African-Americans are most likely to have one (32%) and whites are least (28%).

No safety net

Nearly half of all participants have too little savings to amount to much (one month or less). The number increases to 47% for Hispanics, 50% for African-Americans, while only 25% of Asians have one month or less saved for hard times.

Cart before the horse syndrome

While Asians win the trophy for being most prepared for retirement, they seem to have their priorities somewhat misplaced. Lifestyle matters much for Asians, who put a higher priority on purchasing a nice house or car, than planning for retirement, according to the survey.

What's the takeaway?

Truth is, the survey shows that everybody on the planet could likely benefit from professional planning advice. "Having a road map to retirement will increase one's probability of achieving one's goal," says Fred Makonnen, vice president of Multicultural Sales at ING. Universally, there is a need for a stash of at least six months worth of expenses. Then too, across the board there is also room for improvement in getting life insurance coverage. However, there is one group that stands out: nearly one-in-four African-Americans have life insurance coverage equal to four to five times their salary, higher than the total population (18%).

Makonnen, has this advice for African-Americans, "Tackle debt. Write your goals on paper and create a plan to get there. Start with reducing your debt. It may require cutting your cable or other expenses. African-Americans also incur higher levels of late fees. You can avoid unnecessary penalties by setting up an automatic payment account." Once the debt is paid off, the next task should be building an emergency and stepping up retirement savings at work.

For Hispanics, his words of wisdom are  simple, "Get focused. Create a comprehensive plan that takes into account shorter-term goals like weddings and college and longer-term goals like retirement."

Although Asians are strong savers, they are the least likely to have a last will and testament (26%), compared with 31% for Hispanics and 37% for whites. Makonnen urges Asians to put creating a will high on the to-do list.

While the research reveals cultural differences, I'm left wondering why? The intersection of culture, tradition and money is fascinating. How much of one's financial personality and attitudes can be attributed to upbringing, environment, culture and tradition? No one can say for sure yet. I'm waiting for that study.

See original here:
Race And Retirement: Who’s Saving The Most, Least?