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A recent study indicates that of the 15.2% of Americans 21 and older who own an individual retirement account in their own name, the majority are gainfully employed, white, American, married and male.
Black Americans have the lowest ownership rate and "by far the lowest average account balance," according to the Employee Benefit Research Institute report.
Hispanics also have a low rate of ownership, but account balances closer to those of their white and other American racial/ethnic counterparts, the study finds.
Varying levels of education is likely the cause of the disparity in ownership, says Craig Copeland, senior research associate at the Washington institute, and author of the report.
Because white, American males generally have "higher income and higher education, they have the money for IRAs and understand the tax advantages," Copeland says.
He explains that people who are well educated typically take employment at companies that offer retirement plans. When they switch companies, they roll over the retirement money and consequently learn about IRAs.
People who are less well educated often take jobs that pay the minimum wage. Retirement plans generally are not offered and employees "are lucky if they have health benefits," Copeland says.
But people who earn less and do own IRAs often have account balances "virtually equal to that of those in the second highest" income category, according to the study.
These findings dont surprise Dave Evans, vice president, retirement and financial planning with the Independent Insurance Agents of America in Alexandria, Va. He believes that the fact that minorities own fewer IRAs than whites is "more income-driven than attitude-driven. Someone looking at that can draw an erroneous conclusion that non-whites are not savers." Evans believes it is actually a cultural norm for certain minority groups to save.
