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Saving money for retirement is an important way to “pay” your future self. And given aging is a reality for us all, our future self needs our investments more than our current self. But that fact doesn’t make it an easy feat to accomplish. For many Americans, growing a retirement fund can feel like an uphill battle, whether due to financial constraints, lack of access or education around investing, or cultural and societal barriers. Because of these hurdles, 51% of households in the U.S. are at risk of being unable to maintain their pre-retirement lifestyles in their later years.

For BIPOC (Black, Indigenous and people of color) Americans, the difficulty is even greater. Not only do these members of our national community face a deeply pronounced wage gap but also bigger setbacks than white Americans when it comes to saving, investing and growing wealth for retirement. Federal Reserve data tells us that even when adjusted for income and education differences, Black and brown communities are woefully under-represented in median household wealth and wealth is connected to investments. For example, household wealth among “higher degree” holding white people is six times higher than Black and brown households with people holding similar degrees. Factors that are contributing to this include: a disadvantage of not inheriting wealth and investing practices from prior generations; a disparity in wages; a lack of representation in financial services; and institutional barriers.

Understanding Wage Gap and Employment Disparities

The racial wage gap — which sees Black men and women earning $0.87 and $0.63 respectively to every white man’s dollar — is no secret. This gap also exists for Latinx, Pacific Islander and American Indian men and women, and can often be even greater when looking at specific industries and job titles. The wealth gap extends into college education, as well, as BIPOC students tend to take on more debt than white students.

“You need to understand the broader racial wealth gap to understand the types of barriers that stand in people’s way when it comes to saving and retirement,” says Dr. Vicki Bogan, an associate professor of finance at Cornell University.

Black, Latinx and Asian workers are less likely to be in positions that offer employer-sponsored retirement plans, like a 401(k), than white workers. Without access to this benefit, workers lose both the potential opportunity for matching employer contributions as well as the ease of ensuring savings are automatically invested from each paycheck.

Inheritance: The Key Driver of the Wealth Gap Across Generations

Income has a major impact when it comes to retirement savings. However, what takes place outside of work and in the home is nearly as important. So much of what folks learn about saving, investing and retirement comes from the people in their personal lives, (for instance, seeing family members invest in their own IRAs). But what happens when that is not available? Where do we learn these “tricks of the trade” on investing, and how do we avoid getting intimidated with navigating the market and the jargon-filled world of retirement investing?

Thankfully, many of the innovations that have blossomed in Fintech in the last 10–20 years have “flattened” the world — information is more available, certain barriers to entry have been removed (e.g. lower minimums, digitization of services, lower fees). Now that these huge hurdles are being removed, the opportunity for financial services remains to create services that invite folks in to share more of the investing wisdom and confidence that can come through education, financial coaching and representation, for example.

“There are cultural pressures that come with being more likely to be “the first” in your family to go to college or get an advanced degree — such as offering financial support to loved ones. It’s easy to see why Black workers are behind,” consumer finance expert Mandi Woodruff points out.

She’s not wrong: We can’t forget the tugs on Black and brown workers’ earnings that may not exist for others. My wife and I have helped support family throughout our careers as first-generation immigrants, which continues to affect our own family’s financial standing compared to professional peers.

Read more: What Is Generational Wealth?

Reducing Friction in the Financial Industry

When the job market and cultural norms make it more difficult for BIPOC communities to plan and save for a comfortable retirement, it’s up to the financial industry to take a stand. We have a responsibility to break the narrative of “You just need to work harder and figure it out.” That requires increasing representation of people of color in the industry, extending the conversation around investing to include people who may not hear it at home, and lowering the barriers to entry.

“Representation is a very powerful factor in getting people to change their behavior,” says Dr. Bogan. “In a lot of contexts, it’s critical for moving the needle.” By lifting up the voices of people of color and amplifying their stories of saving and prioritizing their futures, the financial industry can make itself more welcoming to racial minorities.

Increasing representation in financial services providers, becoming more welcoming and reducing friction are not enough. But these are solid next steps in advancing this important and multi-generational challenge of building an inclusive retirement planning and investing environment.

Change doesn’t happen overnight.

So many elements come together to create the retirement race gap — from long-standing structures that have led to wage and wealth disparity, to cultural priorities, to lack of representation and barriers in the financial industry. At Ally, we’re fighting to combat these. And while we know this fight won’t be won in one lifetime, we can still make meaningful progress by taking action now.

Read more: Combating the Racial Wealth Gap — A Conversation With Lule Demmissie and Anna N’Jie-Konte

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During her tenure as president of Ally Invest, Lule led Ally Invest Securities, Ally Invest Advisors and API business lines. She also authored several articles about the investing industry and investor behaviors. Lule has a passion for agile product development and an appreciation of design thinking in shaping user-centric experiences. An advocate for financial and retirement solutions that rely on a mix of digital and human guidance, Lule believes in empowering individuals, especially women and minorities, to independently drive their own financial futures.