Preparing for the future
Why don’t people save more? The reasons are complex, but the underlying theme is cultural. “African Americans are distrustful of the financial system because it has excluded them for generations,” says Andrés Tapia, chief diversity officer at Hewitt Associates, the benefits-consulting giant. Hewitt’s research shows that African Americans consistently put home ownership and college ahead of retirement goals. Owning a home and educating children become a huge priority, explains Tapia, “if you are the first person in your family to do it.”
Preparing for the future can also be controversial in the community. “If your mama lives with you — and others in your extended community are struggling to get by — putting aside money that you can’t touch for the next 15 to 20 years feels selfish and inappropriate,” Tapia says.
Indeed, for many people, retirement is more a dream than a priority. The Ariel-Schwab survey found that African Americans under the age of 50 are nearly twice as likely as comparable whites to say they want to retire by 60, but they are half as likely to cite retirement as their most important savings goal.
Adding to the skepticism, the great market meltdown of 2008 showed that even the most carefully crafted retirement plans can be ruined by forces beyond a person’s control. “This is a big setback that will affect all people,” says Mellody Hobson, president of Ariel, the largest African American-run money manager. “In our community, which has had less exposure to the market, people are especially nervous” about investing. Such reticence has made Domino’s efforts to sell its perk to employees all the more difficult.