A Look at the Financial Situation of African Americans/Blacks and Hispanics: Challenges and Opportunities

Transcription

1 A Look at the Financial Situation of African Americans/Blacks and s: Challenges and Opportunities Prepared by GfK for AARP October 2015

2 About AARP Acknowledgements AARP is a nonprofit, nonpartisan organization, with a membership of nearly 38 million, that helps people turn their goals and dreams into real possibilities, strengthens communities and fights for the issues that matter most to families such as healthcare, employment and income security, retirement planning, affordable utilities and protection from financial abuse. We advocate for individuals in the marketplace by selecting products and services of high quality and value to carry the AARP name as well as help our members obtain discounts on a wide range of products, travel, and services. A trusted source for lifestyle tips, news and educational information, AARP produces AARP The Magazine, the world's largest circulation magazine; AARP Bulletin; AARP TV & Radio; AARP Books; and AARP en Español, a Spanish-language website addressing the interests and needs of s. AARP does not endorse candidates for public office or make contributions to political campaigns or candidates. The AARP Foundation is an affiliated charity that provides security, protection, and empowerment to older persons in need with support from thousands of volunteers, donors, and sponsors. AARP has staffed offices in all 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. Learn more at The views expressed herein are for information, debate, and discussion, and do not necessarily represent official policies of AARP. Acknowledgments GfK Custom Research administered the survey and prepared the report with input and contributions from AARP. Special thanks to the following AARP staff for their contributions to the report: Laura Mehegan for data checking, Alicia Williams for her analytical insights, and Rebecca Perron for reviewing the report. S. Kathi Brown of AARP s Research Center managed the project. For additional information about this report, contact S. Kathi Brown at skbrown@aarp.org. Media inquiries should be directed to media@aarp.org. 2

3 Table of Contents Table of Contents Background and Methodology 4 Key Findings and Implications 7 Detailed Findings Perceptions of Financial Situation: Financial Health, Priorities, Concerns 18 Life Challenges 23 Assets 28 Borrowing Behavior and Debt 36 Attitudes Toward Finances and Money Management 46 Savings Behavior 54 Retirement: Confidence and Expected Income 63 Access to Financial Health Resources 67 Interest in Financial Information and Trust of Sources 75 Financial Health Score 82 Predictors of Financial Health Score 86 Appendix A. Profile of Respondents 91 B. Detailed Tables 93 C. Calculation of Financial Health Score 104 D. Technical Explanation of Key Driver analysis 106 E. Annotated Questionnaire (available as a separate document) 3

4 BACKGROUND & METHODOLOGY 4

5 Background and Objectives: Why was this survey conducted? Background & Methodology Background: AARP has a history of working to improve the financial security of older adults. In recent years, in response to the growing multicultural population in the U.S., AARP has embarked on financial education programs that target multicultural populations, with a particular focus on the two largest racial/ethnic minorities: African Americans/Blacks and s. This research intends to better understand the financial challenges and needs of African Americans/Blacks and s/latinos years olds and improve financial education efforts targeting these audiences. Specific objectives include: - Examine financial concerns, attitudes, and behaviors (e.g. related to saving, financial and retirement planning, debt, spending, etc.) - Uncover the key drivers of the financial health of the African American/Black and populations (including the roles of attitudes, financial behaviors, educational attainment, and family background) - Identify resources consulted in financial matters as well as the factors influencing the decision to use or not use particular resources - Identify financial education topics of particular interest/relevance to these audiences 5

6 How was the survey conducted? Background & Methodology Nationally representative of adults ages 45-64, who are not yet fully retired and are involved in financial decisions for the household.* General Public WHEN: From December 23-29, 2014 SAMPLE SIZE: 1002 HOW: Survey was conducted online using GfK KnowledgePanel the only large-scale representative online panel of the American public. The KnowledgePanel covers 97% of U.S. households. Respondents are selected using random probability address-based sampling; computers and Internet service are provided to respondents who do not have them to ensure more complete representation of the American public. The survey took 24 minutes on average to administer. Final data were weighted by key demographics according to the March 2014 Current Population Survey (CPS). The margin of sampling error for this poll is +/- 3.4 percentage points (total sample) and is higher for subgroups. Note: The general public sample includes non- whites, non- African Americans/Blacks, and s, as well as adults of other race/ethnicities in proportion to their share of the general population ages In this report, the results shown for whites are from a subset of the general public sample. Whites refers to non- whites. s WHEN: From December 23, 2014 to January 12, 2015 SAMPLE SIZE: 862 HOW: Survey was conducted online using GfK KnowledgePanel via the General Public sample and an augment. Respondents were given the option to take the survey in English or Spanish. The survey took 30 minutes on average to administer. The data were weighted by key demographics according to the March 2014 CPS. The margin of sampling error is +/- 5.2 percentage points (total sample) and is higher for subgroups. Note: includes anyone who indicated that they are of Spanish,, or Latino descent, regardless of their race(s). African Americans/Blacks WHEN: From December 23, 2014 to January 12, 2015 SAMPLE SIZE: 805 HOW: Survey was conducted online using a blend of GfK KnowledgePanel and online consumer panels via the General Public sample and an augment. The survey took 25 minutes on average to administer. The data were weighted by key demographics according to the March 2014 CPS. The margin of sampling error is +/- 4.9 percentage points (total sample) and is higher for subgroups. Note: Throughout this report, African American/Black is used to refer to non- African Americans/Blacks. *While the general public sample and sample was drawn exclusively from the KnowledgePanel, the African American/Black sample from the KnowledgePanel was supplemented with sample from other panels before weighting by key demographics. 6

7 KEY FINDINGS AND IMPLICATIONS 7

8 Key Take-Away #1: Top financial priorities and concerns are similar regardless of race/ethnicity; however, concerns are more widespread among s and African Americans/Blacks than among the general public. Key Findings WHAT? The top three financial priorities for African Americans/Blacks, s, and the general population are the same, with the majority naming each as a high priority: Keeping current job (75% of s, 68% of African Americans/Blacks, 61% of Whites, and 64% of the general public) Building up savings (64%, 71%, 53%, and 55%) Paying off debt (66%, 67%, 49%, and 51%) However, African Americans/Blacks and s are more likely than the general public to identify the above issues (and other aspects of finances) as priorities. In terms of financial concerns, building up savings, paying for health care, making more money, and paying off debt are key concerns across groups. However, s are especially likely to express concerns about these and all aspects of finances. For example, 61% of s worry about having enough money to cover basic expenses, compared to just 45% of African Americans/Blacks, 37% of Whites, and 42% of the general public, respectively. The high concern among s may in part reflect their higher incidence of unemployment as they are more likely than the general public to have experienced job loss in the past 5 years (22% vs. 16%) SO WHAT? Communication and outreach related to the importance of maintaining employment and the need to have enough savings to cover an unexpected job loss are likely to resonate across groups. For African Americans /Blacks and s, the high priorities assigned to both building savings and paying off debt suggest that both of these topics should have broad appeal. In contrast, outreach and education related to covering basic expenses are likely to resonate particularly strongly with s as well as lower-income individuals regardless of race/ethnicity. Although African Americans/Blacks and s generally identify more financial priorities and s are more likely to express concerns compared to the general population, income and other factors (discussed later in this report) that affect financial health also shape priorities and concerns. 8

9 Key Take-Away #2: Few feel highly confident about their financial situation. Even those who do feel confident may be overly optimistic. Key Findings WHAT? SO WHAT? No more than one in three, regardless of race/ethnicity, give themselves a high rating when rating their overall financial health on a scale from 0 to 10. African Americans/Blacks are especially unlikely to view their financial health in a favorable light. Specifically, the share of respondents rating their financial health as a 8, 9, or 10 is 33% among the general public (34% among whites), 34% among s, and a mere 21% among African Americans/Blacks. In some cases, especially among African Americans/Blacks and s, even those who are confident may have an unrealistic impression of their financial health. For example, among African Americans/Blacks and s who gave themselves a high financial health rating of 8 to 10, roughly one in three have less than $25,000 in financial assets (cash, savings, and investments), compared to just 11% of the general population who gave themselves a high rating. The style and tone of communications to all groups, regardless of race/ethnicity, should reflect the fact that few feel especially confident in their financial health. Additionally, communications should convey that even those who feel confident should strive to improve their situation as the risks of unexpected emergencies and life events can have significant and long-lasting financial repercussions. 9

10 Key Take-Away #3: A more objective measure of financial health a financial health score suggests stark differences by race/ethnicity. Key Findings WHAT? SO WHAT? A financial health score was calculated for each respondent based on the value of their assets relative to income, debt relative to income, and emergency savings. The scores reveal a wide gap between the financial health of the general population compared to s and African Americans/Blacks. Specifically, although 28% of the general population received a top-tier financial health score suggesting that they are in good shape, just 17% of s and 8% of African Americans/Blacks scored this well. Comparing the financial health scores to financial health self-assessments uncovers discrepancies between perceptions and reality. For example, of s and African Americans/Blacks who rated their financial health as a 8,9, or 10, fewer than three in ten (just 22% of African Americans/Blacks and 29% of s) received a top score. For African Americans/Blacks and s, the gap between perceptions of financial health and the reality of their situation suggests the need for education on simple, easy-to-follow techniques for managing debt and building savings. Acknowledging the financial challenges facing these audiences, such as limited incomes, and being sensitive to cultural nuances is also critical to make the education relevant and actionable. 10

11 Key Take-Away #4: Financial education during childhood appears to be linked to financial health Key Findings WHAT? SO WHAT? Regardless of race/ethnicity, about half or more (52%-55%) say that, as a child or young adult, they received at least some guidance from family on how to save money and/or invest. Advice on budgeting and managing debt is not far behind, cited by nearly four in ten or more across groups. For both s and African Americans/Blacks, receiving financial education from family and financial health today appear to be linked as those who receive a lot of financial guidance from family report higher retirement confidence, more savings, and received higher financial health scores than those who received no such guidance. For example, s who received a lot of guidance from family related to saving and investing are more likely to have $50,000 or more in financial assets today than those who received no such guidance (45% vs. 26%). African Americans/Blacks who received a lot of guidance from family related to debt are more likely to say that debt is not a problem for them today, compared to those who did not receive guidance related to debt (62% vs. 41%). Financial discussions and lessons learned in childhood have the potential to serve as a primer for later on in life, helping to set today s youth up for future success. Education and outreach should emphasize the importance of financial education early on in life, conveying that it is never too early to start talking about money and passing down life lessons in this area. Tips on how to get started should be made available to parents and grandparents, with examples of how to modify the lessons for children of different ages. 11

12 Key Take-Away #5: Three in four or more view themselves as planners and savers, regardless of race/ethnicity. Yet s and African Americans/Blacks feel less secure. Key Findings WHAT? SO WHAT? Despite the lower financial health scores among African Americans/Blacks and s, they are just as likely as the general population to view themselves as planners who try to plan carefully for the future. (75% of African Americans/Blacks, 80% of s, 76% of whites, and 76% of the general population) Additionally, the vast majority of African Americans/Blacks and s strongly or somewhat agree that they save money as often as I can. In fact, s are more likely than the general population to feel this way. (83% of s, 74% of African Americans/Blacks, and 77% of the general population) Communication and outreach should offer practical tips and advice for saving even if it is just a small amount each month while, at the same time, acknowledging that many are doing their best in a somewhat challenging environment. A more heavy-handed approach would likely alienate many given that individuals view themselves as diligent savers and planners. However, African Americans/Blacks (33%) and s (41%) are less likely than the general population (48%) to be relatively comfortable with the amount that they have saved. (This lower level of comfort with their savings is not surprising in light of the lower value of their financial assets -- 26% of African Americans/Blacks and 21% of s estimate that they have less than $1,000 in cash, savings, or investments, compared to just 14% of the general population.) 12

13 Key Take-Away #6: Few feel exceedingly confident in their retirement prospects; s require special focus in this area due to their lack of employer-provided retirement savings vehicles. Key Findings WHAT? SO WHAT? When rating their confidence in their ability to live comfortably in retirement, three in ten or fewer across groups express high confidence of 8,9, or 10 on a scale from 0 to 10. The share of s (27%) expressing high confidence is nearly identical to the general public (28%); African Americans/Blacks (20%) are less likely to be highly confident. Not only are few very confident about retirement, but less than half have attempted to estimate the amount of money needed for retirement. In fact, just one in three African Americans/Blacks (32%) and s (34%) have tried to estimate this amount, compared to 43% of the general public. Furthermore, although the majority of the general public (63%) and African Americans/Blacks (58%) say that they (or their spouse/partner) are currently participating in an employer- sponsored retirement savings plan, less than half (48%) of s say the same. s are also less likely than the general public to have other retirement accounts, including IRAs and employer-provided defined benefit plans. Financial health and retirement savings will not only impact when and if individuals can retire, but their quality of life while in retirement. Education and outreach should emphasize the importance of retirement preparedness and planning, including exercises like mapping out the amount of money needed for retirement, while, at the same time, being mindful of the general lack of confidence felt in this area. Efforts that target s, raising their exposure to and comfort with retirement accounts, may be especially necessary. African Americans/Blacks and s are also more likely than the general public to expect Social Security and employment to be major sources of income in retirement. 13

14 Key Take-Away #7: Use of professional advice is low, especially among African Americans/Blacks and s, even though most acknowledge that professional advice can be helpful. Key Findings WHAT? SO WHAT? Fewer than one in four African Americans/Blacks (23%) and s (24%) have consulted a professional financial advisor, compared to more than one in three (35%) in the general population. Despite the relatively low use of professional advisors, the majority across groups appear to believe that advisors can be helpful to anyone, even people who don t have much money. Yet, roughly three in 10 across groups feel that advisors are only for people with a lot of money. Across the board, those who have seen a financial advisor report higher savings levels, higher retirement confidence, and received higher financial health scores than those who have not seen one. For example, among s who have used an advisor, 54% have $50,000 or more saved, vs. 30% of s who have not seen an advisor. For African Americans/Blacks, the figures are 56% and 25%. Outreach to these audiences should explain the benefits of professional financial advice and dispel the myth that financial advisors are only for wealthy individuals. It should be clarified that financial advisors may be especially helpful for those with limited means, particularly those struggling with debt and/or those trying to build savings despite limited incomes. However, education about the value of professional financial advice should be coupled with guidance that helps individuals assess an advisor s credentials and identify advisors that are best suited to meet their needs. 14

15 Key Takeaway #8: A variety of issues contribute to the lower financial health of African Americans/Blacks and s, with barriers especially common among s. Key Findings WHAT? SO WHAT? African Americans/Blacks and s are more likely than the general public to have low incomes and no college education. 34% of s and 28% of African Americans/Blacks have household incomes under $40,000, compared to 20% of the general public. 74% of s and 62% of African Americans/Blacks have no college degrees, vs. 54% of the general public. They are also less likely to have high-yielding financial accounts that help build wealth. Just 19% of African Americans/Blacks and 20% of s have a mutual fund, compared to 37% of the general public. They are also less likely to have received financial help from family with steps that facilitate wealth-building, such as college and home buying. Just 9% of African Americans/Blacks and 16% of s received help on a home down payment, compared to 22% of the general public. s are especially likely to face hurdles. They are less likely to have health insurance and to have worked for an employer that provides a retirement plan or financial education. (e.g. Just 71% of s have health insurance, compared to 87% of the general public. Just 25% of s have worked for an employer that offers financial education, compared to 35% of the general public.) s are also less likely to have basic checking and savings accounts. Finally, language barriers present obvious challenges for those who are not fluent in English. Outreach to these groups should take into account that many come from economically disadvantaged circumstances. Financial education materials suitable for those with health insurance, a college degree, and an employer-sponsored retirement savings plan will need to be modified for those who have none of these resources. Basic education around opening a savings account and budgeting may be especially important for those with low incomes. For those without college degrees, tips regarding job skills training and improving one s longterm employment prospects despite the lack of a college degree may also be useful. For those without a workplace retirement plan, tips on how to save for retirement through accounts established independent of one s employer may also be worthwhile. 15

16 Key Takeaway #9: Borrowing behavior is the top influence on financial health regardless of race/ethnicity. Other key behavioral influences include the act of saving and long-term planning. Key Findings WHAT? SO WHAT? For both s and African Americans/Blacks, top drivers of financial health are similar to those for the general population and include recent borrowing behavior, whether they are currently saving money, household income adjusted for household size, and number of years of home ownership. Planning horizon (how far ahead they plan when making financial decisions) and whether they have tried to estimate retirement savings needs are also top drivers for African Americans/Blacks and moderate drivers for s. For s, other key drivers of financial health, which have a negative impact, include overspending and going without health insurance. Financial education that points out specific behaviors that can improve or harm financial health may be particularly useful. Strategies to help people of limited means adopt behaviors that are linked to better financial health (and/or avoid the detrimental behaviors) would also be helpful for the lowerincome segments within these audiences. For example, efforts to increase awareness of the benefits of using higher-yield accounts, such as savings accounts and mutual funds, as a method of building savings over time may be useful. 16

17 Key Take-Away #10: There is a widespread desire for financial information and advice, especially related to managing money in retirement and saving for retirement. Key Findings WHAT? SO WHAT? Majorities across groups feel that information on topics such as how to save for retirement and how to manage money while in retirement would be useful. For example, roughly two in three African Americans/Blacks (67%) and s (68%) express interest in receiving information or advice related to how to manage your money in retirement, as do 62% of Whites and 65% of the general public. African Americans/Blacks and s express more interest than the general public in most financial topics. For example, 71% of s and 65% of African Americans/Blacks express interest in information or advice related to how to save for retirement, compared to just 60% of the general public. Additionally, 62% of s and 58% of African Americans/Blacks express interest in information on how to save generally, compared to 43% of the general public. Education and outreach should take into account the topics and formats preferred by each group to maximize effectiveness. While certain topics, such as how to manage money in retirement, hold broad appeal, the majority of African Americans/Blacks and s express interest in receiving information on more basic topics, such as how to save, which are of less interest to the general public. As for preferred methods of receiving financial education, no one method stands out as preferred by the majority. In-person, one-on-one consultations is one of the more popular formats (33% of African Americans/Blacks, 37% of s, and 39% of the general public). Notably, s (27%) were twice as likely as African Americans/Blacks (13%) and the general population (13%) to express interest in television. 17

18 PERCEPTIONS OF FINANCIAL SITUATION: FINANCIAL HEALTH, PRIORITIES, CONCERNS 18

19 Similar to the general public, roughly one in three s give their overall financial health a top rating. Among African Americans/Blacks, only one in five do. Perceptions of Financial Situation Across groups, roughly one in three rate their financial health as a 8, 9, or 10 on a scale from 0 to 10. African Americans/Blacks are the exception as only one in five give themselves one of these top three ratings. Financial Health Self-Assessments (% who selected each rating) Gen Pop White African American Black / Regardless of race/ethnicity, financial health self-assessments are more favorable among those with higher incomes. (e.g. Among s with incomes of $80K+, 52% give themselves a rating of 8-10, compared to 22% of those with incomes less than $40K. For African Americans/Blacks, the figures are 33% vs. 9%. Among the general public, 48% vs. 7%. 0% 50% 100% = significant differences between African Americans/Blacks and Gen Pop, and s and Gen Pop 19

20 Keeping their jobs, building up savings, and paying off debt are top priorities across groups, with African Americans/Blacks and s especially likely to prioritize multiple items. Perceptions of Financial Situation Both s and African Americans/Blacks are more likely than the general public to identify nearly all of the goals below as high priorities. Examples include: There is a 20-plus percentage gap between African Americans/Blacks and the general public in terms of prioritizing making more money (61% vs. 40%) and reducing spending (49% vs. 29%) s are more than twice as likely as the general public to prioritize getting a better job (29% vs. 13%) % Rating as high priority Q3. Everyone has different financial priorities. Please indicate how much, if at all, each of the following things is a priority to you personally: High priority, Medium priority, Low priority, Not a priority at all. Gen Pop White African American/ Black Keeping my current job / Staying self-employed** * Building up savings * 64* Paying off debt * 66* Making more money * 56* Reducing spending * 47* Providing financial support to family members * 43* Helping my spouse/partner stay employed or get a job** * Getting a better job** * 29* Starting or building my own business * 15* Note: Table excludes one item that was asked of unemployed respondents due to the small number of unemployed respondents in the survey (less than 100 respondents in each group). Bold, asterisk = significant differences between African Americans/Blacks and Gen Pop, and s and Gen Pop ** = re-based to total 20

21 Building up savings and making more money are also top worries with health care costs not far behind. Worries about debt and employment are especially common among African Americans/Blacks and s, respectively. Perceptions of Financial Situation s tend to express greater concern than the general public about every aspect of their finances. s stand out for their concerns about employment-related issues as a full half are worried about keeping their current job (compared to one in three of the gen pop). African Americans/Blacks express more concern than the general public about just a few issues, such as paying off debt (52% of African Americans/Blacks vs. 46% of gen pop), and being able to start their own business (18% vs. 12%). % Rating as very/somewhat worried Q4. How worried are you personally about each of the following: Very worried, Somewhat worried, Not too worried, Not at all worried Gen Pop ** = re-based to total White African American /Black Building up savings * Making more money * Having enough money to cover health care or health insurance * Being able to pay off debt * 66* The amount of money I/my spouse/partner and I spend * Having enough money to cover basic expenses * Providing financial support to family members * Keeping my current job / Staying self-employed** * Getting a better job** * My spouse/partner stay employed or get a job** * Starting or building my own business * 25* Note: Table excludes one item that was asked of unemployed respondents due to the small number of unemployed respondents in the survey (less than 100 respondents in each group). Bold, asterisk = significant differences between African Americans/Blacks and Gen Pop, and s and Gen Pop 21

22 Other notable findings related to perceived financial situation Perceptions of Financial Situation Across the board, those who say that debt is not too much or not at all a problem are more apt to give themselves a good financial health rating than those who say debt is somewhat or a major problem (e.g., Of s who say debt is not a problem for them, 56% give themselves a financial health rating of 8-10, compared to 18% of s for whom debt is a problem. Among African Americans/Blacks, the figures are 31% vs. 10%. Among the general public, 47% vs. 9%) The same is generally true for those who own their own homes; s are the exception (e.g., Among African American/Black homeowners, 27% gave themselves high financial health ratings, compared to 9% of African Americans/Blacks who do not own a home. Among the general public, the figures are 36% vs. 13%) To a somewhat lesser extent, those who are married view their financial health more positively; again, s are an exception (e.g., 24% of married African Americans/Blacks rated their financial health as a 8-10, compared to 16% of African Americans/Blacks who are not married. Among the general public, the figures are 35% vs. 25%) Among s, men are more likely than women to give themselves a high financial health rating (e.g. 39% of men rate their financial health as a 8-10, compared to just 28% of women). This difference by gender did not emerge among African Americans/Blacks or the general public. For African Americans/Blacks and the general public, there is a connection between financial education from parents or other older relatives during childhood on issues like saving, managing debt, and budgeting; those who received a lot of financial advice from family while growing up report better financial health today than those who received none. (e.g., Among African Americans/Blacks who received a lot of advice from family, 31% give themselves a financial health rating of 8-10, compared to 18% of African Americans/Blacks who received no such advice from family. Among the general public, the figures are 42% vs. 27%.) At the other end of the spectrum, younger respondents ages tend to have more financial worries than their older counterparts ages (e.g., Among s ages 45-54, 66% worry about having enough money to cover basic expenses, compared to 53% of those ages For African Americans/Blacks, the figures are 49% vs. 39%. For the general public, 46% vs. 36%.) And, s who are not employed full time tend to be more worried than those who have full-time employment (e.g., among s, 77% vs. 62%, respectively, are worried about paying off debt, and 75% vs. 57% worry about having enough money to cover basic expenses) 22

23 LIFE CHALLENGES 23

24 The most common life challenges center around a drop in income or savings and an increase in debt. Life Challenges Nearly half of s (48%) and African Americans/Blacks (49%) have experienced at least one of these top three challenges within the past five years, compared to just 42% of the general public. Outside of the top three issues, s are notably more apt than the general public to have lost their job (22% of s vs. 16% of GP) and to have been without health insurance (15% vs. 9%). African Americans/Blacks stand out for having filed for bankruptcy (8% of African Americans/Blacks vs. 3% of GP). % Yes Q47. Which of the following events have affected your life or your spouse/partner s life in the last 5 years? Yes, No Gen Pop White African American/ Black Reduction in income * Increase in debt * 29* Reduction in savings or assets Loss of a job * Provided care to parent or older relative Decline in health Had a major illness Moved to a new house Been without health insurance for any period of time * Family member moved in with you Divorce or separation Foreclosure/loss of home Started own business 3 4 6* 4 Filed for bankruptcy 3 2 8* 5 Provided care to spouse or partner * NOTE: bottom-two ranking items not shown Bold, asterisk = significant differences between African Americans/Blacks and Gen Pop, and s and Gen Pop 24

25 Adding to these challenges, many are providing financial assistance to others Life Challenges Over one in three (35%) African Americans/Blacks are providing financial support to an adult relative other than a spouse or partner, compared to just 27% of the general public. s stand out due to the high share (21%) who are providing support to relatives under the age of 18, compared to just 14% of the general public. % Providing financial support to the following Q48. Are you currently providing financial assistance to any of the following? Yes, No Gen Pop White African American/ Black Relative ages 18 or older (not spouse/partner) * 29 Spouse or partner * 28 Relative under the age of * Friend or acquaintance * Among African Americans/Blacks and the general public, likelihood of providing financial support to others increases with income. This is not the case among s. (e.g. 61% of African Americans/Blacks with incomes of $80K or more are providing financial assistance to others, compared to just 41% of African Americans/Blacks with incomes under $40K. For the general public, the figures are 51% and 37%.) Bold, asterisk = significant differences between African Americans/Blacks and Gen Pop, and s and Gen Pop 25

26 And many have experienced underemployment Life Challenges s are more apt than the general public to have experienced underemployment with respect to both skill utilization and pay. For example, 36% of s say that their job doesn t fully utilize their skill set (vs. 27% of the GP), and 31% say that it doesn t pay enough to cover their needs (vs. 22% of the GP). African Americans/Blacks are also more likely than the general public to say that their job doesn t pay enough to cover their needs (30% of African Americans/Blacks vs. 22% of the GP). % Describes me completely/well Q8. How well would you say each of the statements below describes you? Describes me completely, Describes me well, Describes me somewhat, Does not describe me Gen Pop White African American/ Black My job does/did not fully utilize my skill set* * My job does/did not pay enough to cover my needs* * 31* I (my spouse/partner and I ) are having trouble making ends meet Among African Americans/Blacks and the general public, those with less than a Bachelors degree are more likely to say that their job doesn t pay enough to cover their needs. (e.g. 34% of African Americans/Blacks with less than a Bachelors vs. 17% of those with a Bachelors). Among s and the general public, women are more likely than men to feel this way (e.g. 37% of women vs. 26% of men) *Unemployed respondents were asked to refer to their last job when answering these two questions. Among s, those who are Spanish-dominant are more likely than those who are English-dominant to feel that their job doesn t pay enough to cover their needs (e.g. (39% of ofspanish-dominant vs. vs. 13% of ofenglish-dominant) and that their job doesn t fully utilize their skill set (48% vs. 20%). Bold, asterisk = significant differences between African Americans/Blacks and Gen Pop, or s and Gen Pop 26

27 Other notable findings related to life challenges Life Challenges Regardless of race/ethnicity, those with less than a Bachelors degree are more apt to say they are having trouble making ends meet. (e.g., 22% of African Americans/Blacks with less than a Bachelors degree are having trouble making ends meet, compared to 15% of those with a Bachelor s degree. For s, the figures are 22% vs. 12%. For the general public, 21% vs. 7%.) Differences exist by employment status as well. Specifically, regardless of race/ethnicity, respondents who are employed part-time or are looking for work tend to be more vulnerable to many of life s challenges than those who are employed full-time. (e.g., 26% of s who are not employed full-time have been without health insurance in the past 5 years, compared to just 12% of s who are employed full-time. For African Americans/Blacks, the figures are 18% vs. 9%. For the general public, 20% vs. 6%.) Notably, African Americans/Blacks who say their debt level is somewhat, if not a major, problem are more apt to be providing financial assistance to others than those whose debt level is not a problem (62% vs. 47%, respectively); this pattern is true among the general public as well. 27

28 ASSETS 28

29 Checking accounts are owned by nearly all African American/Black and households. Savings accounts are also fairly widespread; other types of accounts are much less common. Assets s are less apt than the general public to have each of the financial products in the survey, including the more basic accounts such as checking and savings accounts. For instance, 79% of s have savings accounts, compared to 86% of the general public. African Americans/Blacks are also less likely to have many of the accounts. For example, 19% of African Americans/Blacks have mutual funds, compared to 37% among the general public. Q16. Which of the following financial accounts or products do you (or your spouse/partner) currently have? (Please do NOT include retirement accounts.) Yes, No (% Yes is shown) Gen Pop White African American/Black Lower-income respondents are less likely to have these accounts. (e.g. 77% of s and 83% of African Americans/Blacks with household incomes under $40K have checking accounts, compared to nearly all of those with incomes of $80K+.) Checking account Savings account Mutual Funds Individual stocks Annuity Certificates of Deposits (CDs) Individual bonds = significant differences between African Americans/Blacks and Gen Pop, or s and Gen Pop 29

30 Most African Americans/Blacks and s have health insurance, but s are least likely to have it. Assets s are less likely than both the general public and African Americans/Blacks to have health insurance (71% of s vs. 85% of African Americans/Blacks and 87% of the general public). Currently Have Health Insurance African American/Black White Gen Pop 71 % with Health insurance Likelihood of having health insurance increases with education and income and is also higher among those who are employed full-time. Over 90% of respondents with incomes of $80K+ have health insurance (94% of s, 94% of African Americans/Blacks, and 95% of the general public), compared to less than seven in ten of those with incomes under $40K (44% of s, 67% of African Americans/Blacks, and 63% of the general public.) 91% of African Americans/Blacks with a Bachelors degree have health insurance, compared to 83% of African Americans/Blacks without a Bachelors degree. For s, the figures are 85% vs. 67%. For the general public, 94% vs. 83%. = significant differences between African Americans/Blacks and Gen Pop, or s and Gen Pop 30

31 Majorities across all groups have employer-sponsored retirement savings plans, but fewer have other types of retirement accounts. Assets s are notably less likely than the general public to have each type of retirement account: Employer-sponsored retirement savings plan (58% of s vs. 74% of Gen Pop) IRA (39% of s vs. 58% of Gen Pop) Traditional employer-provided defined benefit pension or cash balance plan (37% of s vs. 46% of Gen Pop) The share of African Americans/Blacks with retirement accounts resembles that of the general public, except that they are less apt to have an IRA (46% of African Americans/Blacks vs. 58% of Gen Pop) % Yes Q15. Which of the following types of retirement accounts, if any, do you (or your spouse/partner) currently have? Yes, No An employer-sponsored retirement savings plan, such as a 401k, a 403b or tax-deferred annuity, or a thrift-savings plan Gen Pop White African American/ Black * An individual retirement account, or IRA * 39* Traditional employer-provided defined benefit pension or cash balance plan * Employer-provided profit-sharing plan Likelihood of having a 401(k), an IRA, and a pension plan increases with education and income. Bold, asterisk = significant differences between African Americans/Blacks and Gen Pop, or s and Gen Pop 80% of African Americans/Blacks with a Bachelors degree have money in an employer-sponsored retirement savings plan, compared to just 66% of African Americans/Blacks without a Bachelors degree. Among s, the corresponding figures are 76% of those with a Bachelors vs. 54% of those without a Bachelors.) 88% of African Americans/Blacks with household incomes of $80K or more have an employer-sponsored retirement plan, compared to just 45% of African Americans/Blacks with incomes under $40K. Among s, the gap between higher- and lower-income is especially wide --80% vs. 25%. For the general public, the figures are 85% vs. 44%. 31

32 A great disparity exists between the general public and African Americans/Blacks and s when it comes to financial assets Assets More than four in 10 African Americans/Blacks (48%) and s (46%) have less than $10,000 in cash, savings, and investments (versus 27% of the general public) Roughly one in four has less than $1,000 (26% of African Americans/Blacks and 21% of s) % D13. In total, about how much money would you say you (and your spouse/partner) currently have in cash, savings, and investments, not including the value of your home or other real estate? Please include cash, checking accounts, savings, CDs, stocks, bonds, mutual funds, employer-sponsored retirement savings plans, IRAs, and other investments, but do not include the value of defined benefit plans. Gen Pop White African American/ Black Less than $1, * 21* $1,000 to less than $10, * 24* $10,000 to less than $25, $25,000 to less than $50, * 9 $50,000 to less than $100, $100,000 to less than $150, * 8 $150,000 to less than $250, * 5* $250,000 to less than $500, * 6* $500,000 to less than $1 million, or * 4* $1 million or more 6 6 1* 2* Medians $50,000 - $100,000 $100,000 - $150,000 $10,000 - $25,000 $10,000 - $25,000 Bold, asterisk = significant differences between African Americans/Blacks and Gen Pop, or s and Gen Pop Note: Percentages and medians were calculated based on only respondents who provided a response. Refusals were excluded from the denominator. 32

33 A similar pattern is seen with non-financial assets Assets Over 40% of African Americans/Blacks and s estimate that their non-financial assets have a value of less than $10,000, compared to 27% of the general public. % D17. Excluding real estate, what is the approximate total value of other nonfinancial assets that you (and and/or your spouse) own? Please include cars or other vehicles, jewelry, furniture, electronics, silverware, or other household items. Gen Pop White African American/ Black $1 to less than $5, * 22* $5,000 to less than $10, * 20 $10,000 to less than $25, $25,000 to less than $50, $50,000 to less than $100, * 12* $100,000 or more * 8 Medians $25,000 50,000 $25,000-50,000 $10,000-25,000 $10,000-25,000 Note: Percentages and medians were calculated based on only respondents who provided a response. Refusals were excluded from the denominator. Bold, asterisk = significant differences between African Americans/Blacks and Gen Pop, or s and Gen Pop 33

34 Majorities of African Americans/Blacks and s own a home or other real estate, but they are less likely than the general public to do so Assets Both African Americans/Blacks (64%) and s (74%) are less likely than the general public (86%) to own real estate Among those who do own real estate, the median value of real estate owned by African Americans/Blacks and s is lower than the median value among the general population. (See median values below.) % Yes Gen Pop White African American/ Black % Currently own home * 70* % who do not own home but do own other real estate * Total % who currently own home or other real estate * 74* D4. Do you currently own your own home? D5. (if do not own home) Do you (and/or your spouse/partner) currently own any real estate? (rebased to total: Gen Pop n= 1002, White n=779, African American/Black n=805, n=862) Median value Median value of real estate owned (among those who own a home or other real estate) Gen Pop $200, ,000 White $200, ,000 African American/ Black $100, ,000 $100, ,000 Bold, asterisk = significant differences between African Americans/Blacks and Gen Pop, or s and Gen Pop 34

35 Other notable findings related to assets Assets Not surprisingly, financial assets increase with education and income regardless of race/ethnicity. 29% of African Americans/Blacks without a Bachelors degree have less than $1,000 in financial assets, compared to 14% of those with a Bachelor s degree. For s, the figures are 24% vs. 6%. For the general public, 18% vs. 5%. Even more striking, 60% of African Americans/Blacks with household incomes under $40K have less than $1,000 in financial assets, compared to 5% of African Americans/Blacks with incomes of $80K or more. For s, the figures are 44% vs. 2%. For the general public, 47% vs. 2%. Financial assets are also higher in value among those who have consulted a professional financial advisor. (e.g. Among African Americans/Blacks who have not consulted a financial advisor, 31% have less than $1,000 in financial assets, compared to 10% of African Americans/Blacks who have consulted an advisor. Among s, the figures are 25% and 10%, respectively. Among the general public, 20% vs. 3%.) Among s and the general public, financial assets are lower in value among those who have experienced certain adverse life events within the past five years, such as job loss and a decline in health. This is not the case for African Americans/Blacks. Among s who have been affected by job loss within the past five years (themselves or their spouse), 30% have less than $1,000 in financial assets, compared to 19% of s who have not been affected by job loss. Among the general public, the figures are 19% vs. 13%. Among s who have experienced a health decline in the past 5 years (themselves or their spouse), 39% have less than $1,000 in financial assets, compared to 19% of s who have not experienced a decline in health. Among the general public, the figures are 20% vs. 13%. Among s, women report lower levels of financial assets than men. (e.g. 26% of women have less than $1,000 in financial assets, compared to 18% of men.) This difference by gender did not emerge among African Americans/Blacks or the general public. 35

36 BORROWING BEHAVIOR & DEBT 36

37 Prevalence of different types of debt is similar across groups; but certain types, such as credit card debt, are more common among African Americans/Blacks and s. Borrowing Behavior & Debt Mortgages and credit card debt, followed by car loans, are the most common types of debt held by African Americans/Blacks and s. African Americans/Blacks (65%) and s (56%) are more likely than the general public (49%) to have credit card debt; however, it is especially widespread among African Americans/Blacks. Among African Americans/Blacks, credit card debt is more common than mortgages, with 65% of African Americans/Blacks reporting credit card debt and just 53% reporting mortgages. Loans from employer retirement plans are less common in general, but African Americans/Blacks (16%) are more likely than the general public (9%) to have such loans. % Yes Q23. Which of the following types of loans or debt, if any, do you / or your spouse/partner currently have? - 'Yes' Gen Pop White African American/ Black Mortgage * 56 Credit card debt (unpaid credit card balances that roll over from month to month) * 56* Car loan Student loan (for myself or someone else) * 18 Loan from an employer-sponsored retirement plan, such as a 401k, 403b or tax-deferred annuity, or a thrift savings plan * 12 Loan from a family member or friend / (not your spouse/partner) Loan to set up or fund a small business Loan from a payday lender 2 1 9* 3 Loan from employer * Other debt or loans * 17 Bold, asterisk = significant differences between African Americans/Blacks and Gen Pop, or s and Gen Pop 37

38 African Americans/Blacks in particular are more apt than other groups to have turned to alternative sources of loans, such as payday lenders or car title lenders. Borrowing Behavior & Debt Borrowing from family and personal acquaintances, while relatively uncommon across groups, is more prevalent among African Americans/Blacks (16%) and s (14%) than among the general public (10%). Use of payday lenders and car title lenders is more common among African Americans/Blacks than among the general public. For example, 15% of African Americans/Blacks have used a payday lender in the past five years, compared to just 4% of the general public. Compared to the general public, African Americans/Blacks and s are less likely to have borrowed against their home (13% of the general public vs. 6% of African Americans/Blacks and 7% of s).* Q31. Within the past five years, have you (or your spouse/partner) done any of the following? (selected items) Q34. Within the past five years, have you (or your spouse/partner) received a loan from a friend, personal acquaintance, or family member (not including a spouse/partner)? Gen Pop White African American/ Black Borrowed against your home * 7* Received a loan from a friend, personal acquaintance, or family member (other than spouse/partner) * 14* Taken out a loan from a payday lender * 6 Taken out a loan from a car title lender * 8 *This may reflect the fact that African Americans/Blacks and s are less likely than the general population to have ever owned a home/real estate (75% of African Americans/Blacks and 79% of s, compared to 91% of the general public.) Bold, asterisk = significant differences between African Americans/Blacks and Gen Pop, or s and Gen Pop 38

39 Borrowing against retirement plans or premature withdrawals is more common among African Americans/Blacks than the general public. Borrowing Behavior & Debt Nearly three in ten African Americans/Blacks have taken a loan or early withdrawal from an employersponsored retirement plan or taken an early withdrawal from an IRA within the past five years, compared to approximately two in ten in the general public and s. Among s, the relatively low rates of borrowing and taking early withdrawals in due in part to less access to and less participation in retirement plans. (See box below.) Q32. Within the past five years, have you (or your spouse/partner) taken a loan or early withdrawal from an employer-sponsored retirement plan, such as a 401(k), 403(b) or tax-deferred annuity, or a thrift savings plan? Q33. Within the past five years, have you (or your spouse/partner) taken an early withdrawal from an IRA? Gen Pop White African American/ Black Taken a loan from an employer-sponsored retirement plan** * 14 Taken an early withdrawal from an employer-sponsored retirement plan* * 6 Taken an early withdrawal from an IRA * 8 Any of these** * 22 Among s, the relatively low rates of borrowing from retirement plans and taking early withdrawals is due in part to less access to retirement plans. For example, 24% of s have never worked for an employer that offers a retirement plan, compared to just 12-13% of the general public and African Americans/Blacks. Among respondents who have actually participated in employer-sponsored plans, both s (21%) and African Americans/Blacks (23%) are more likely than the general public (14%) to have taken a loan from their plan within the past 5 years. ** Rebased to total. (Questions about employer-sponsored retirement plans were initially asked only of those who have ever participated in such plans. For this table, all % were re-calculated to be among all respondents.) Bold, asterisk = significant differences between African Americans/Blacks and Gen Pop, or s and Gen Pop 39

40 Roughly eight in ten African Americans/Blacks and s have credit cards, making them somewhat less likely than the general public to have them. However, African Americans/Blacks are especially likely to engage in behaviors that build credit card debt. Borrowing Behavior & Debt While the majority across all groups have carried a credit card balance from month to month at some point during the past five years, African Americans/Blacks are the most likely to have done so. (73% of African Americans/Blacks vs. 60% of s and 58% of the general public) African Americans/Blacks are also more likely to have maxed out a credit card in the past five years (27% of African Americans/Blacks vs. 15% of the general public) Both African Americans/Blacks and s are more likely to have taken out a cash advance on a credit card (13% of African Americans/Blacks and s, vs. 7% of the general public) Q28. Do you ( and/or your spouse/partner) currently have any credit cards? Yes, No Q31. Within the past five years, have you (or your spouse/partner) done any of the following? (selected items related to credit cards) Gen Pop White African American/ Black Currently have credit cards * 82* Carried a balance on your credit card from one month to another month (in 5 years) * 60 Maxed out the limit on one or more credit cards (in 5 years) * 19 Taken out a cash advance on a credit card (in 5 years) * 13* Bold, asterisk = significant differences between African Americans/Blacks and Gen Pop, or s and Gen Pop 40

41 Majorities across all groups view credit cards as useful in case of emergency, convenient, and providing protection on purchases. Borrowing Behavior & Debt African Americans/Blacks (42%) are more likely than the general public (32%) to say that they overspend when using credit cards. African Americans/Blacks (30%) and s (22%) are more apt to agree that credit card companies are reluctant to give them credit cards due to low credit scores (vs. 15% of the general public). % Strongly/Somewhat agree Q30. Please indicate the extent to which you agree or disagree with each of the following statements. Strongly agree, Somewhat agree, Somewhat disagree, Strongly disagree Gen Pop White African American/ Black Credit cards are useful to have in case of an emergency Paying with credit cards is convenient * 70* Paying with credit cards provides protection on my purchases I tend to spend more than I can afford when I use credit cards Credit card companies are reluctant to give me credit cards due to my low credit score * * * 22* Bold, asterisk = significant differences between African Americans/Blacks and Gen Pop, or s and Gen Pop 41

42 Among those who have mortgage debt, the distribution of mortgage debt is similar regardless of race/ethnicity. Borrowing Behavior & Debt Among those who have mortgages, more than half have mortgage debt in excess of $100,000. This holds true across groups. Compared to the general public, African Americans/Blacks with mortgages are more likely to have mortgage debt below $50,000 (23%, vs. 16% of the general public). % Q24. Thinking about all of the mortgages that you (and your spouse/partner) currently have, what is your total amount of mortgage debt? (Your best guess is fine.) By total amount of mortgage debt, we mean how much would you need to pay to completely pay off your mortgage. Gen Pop White African American/ Black $1 to less than $50, * 20 $50,000 to less than $100, $100,000 to less than $200, $200,000 to less than $400, $400,000 to less than $600, $600,000 or more Median value Median value of mortgage debt (among those who have a mortgage) Gen Pop White $100,000- $100, , ,000 African American/ Black $100, ,000 $100, ,000 Note: Percentages and medians were calculated based on only respondents who provided a response. Refusals were excluded from the denominator. Base = Currently have a mortgage loan and provided an answer when asked to estimate their total mortgage debt (n=601)-gen Pop, (n=488)-white, (n=437)- African Americans/Black, (n=448)-s. Bold, asterisk = significant difference between African Americans/Blacks and Gen Pop, or s and Gen Pop 42

43 Among those who have non-mortgage debt, the amount of debt is comparable across groups; s are the exception. Borrowing Behavior & Debt At least seven in ten or more across groups have some form of debt other than mortgages. African Americans/Blacks (88%) and s (78%) are more likely than the general public (72%) to have such debt. Among those who have non-mortgage debt, s (27%) are more likely than the general public (18%) to have less than $5,000 of this type of debt. % Q25. Excluding mortgage debt, what is the total amount of the rest of your debt? This includes student loans, car loans, credit card debt, installment loans, loans from friends or employers, business loans, and other debt or loans.(your best guess is fine.) Gen Pop White African American/ Black $1 to less than $5, * $5,000 to less than $10, $10,000 to less than $25, $25,000 to less than $50, $50,000 to less than $100, $100,000 or more * Median value Median value of non-mortgage debt (among those who have non-mortgage) Gen Pop White African American/ Black $10,000-25,000 $10,000-25,000 $10,000-25,000 $10,000-25,000 Note: Percentages and medians were calculated based on only respondents who provided a response. Refusals were excluded from the denominator. Base = Currently have debt other than mortgage debt and provided an answer when asked to estimate their total non-mortgage debt (n=698)-gen Pop, (n=530)- White, (n=700)-african Americans/Blacks, (n=682)-s. Bold, asterisk = significant difference between African Americans/Blacks and Gen Pop, or s and Gen Pop. 43

44 Debt is perceived as more of a problem by African Americans/Blacks and s who have debt than by the general public. Borrowing Behavior & Debt Notably, African Americans/Blacks are the most likely to have debt. Specifically, 92% of African Americans/Blacks have some form of debt (mortgage and/or non-mortgage), compared to 85% of s and 85% of the general public. Among those who have debt, more than half of s (58%) and African Americans/Blacks (53%) characterize their level of debt as a problem, compared to just 45% of the general public Q26. How much of a problem would you say your level of debt is? Yes, a problem Major/somewhat 45% 43% 53% 58% No, not a problem Not too much/not at all Debt holders with lower incomes are more likely to perceive their debt as a problem. Among African Americans/Blacks with debt, 25% of those with less than $40,000 in household income describe their debt as a major problem, compared to just 11% of those with at least $80,000 in household income. Among s, 27% vs. 11%. Among the gen pop, 23% vs. 6%. 55% 57% 47% 41% Gen Pop White African American/ Black = significant differences between African Americans/Blacks and Gen Pop, or s and Gen Pop 44

45 Other notable findings related to borrowing behavior and debt Borrowing Behavior & Debt Among African Americans/Blacks as well as the general population, women are more apt than men to report that they (or their spouse/partner) have engaged in behaviors in the past five years that build credit card debt, including carrying balances over from month to month on credit cards and maxing out their cards.* For example: Among African Americans/Blacks, 77% of women vs. 68% of men report that they (or their spouse/partner) have carried a balance on their credit card from month to month. Among African Americans/Blacks, 32% of women vs. 21% of men report that they (or their spouse/partner) have maxed out their cards. Among African Americans/Blacks and the general population, those ages are more inclined to report debt issues within the past five years than their older counterparts (ages 55-64).* For African Americans/Blacks, differences by age are as follow: Carried balances from month to month on credit cards (77% of those ages vs. 68% of those ages 55-64) Taken out a loan from a payday lender (19% vs. 10%) Taken out a loan from a car title lender (14% vs. 6%) *Note: These differences between women and men as well as the differences by age did not emerge in the sample. 45

46 ATTITUDES TOWARD FINANCES AND MONEY MANAGEMENT 46

47 Like the general public, more than 7 in 10 s and African Americans/Blacks view themselves as savers, planning carefully for the future. Attitudes Toward Finances and Money Management s tend to be more apt than the general public to say they save as often as they can (83% vs. 77%) Roughly half across groups are comfortable with their spending levels, with African Americans/Blacks the least likely to be comfortable with their spending (47% of African Americans/Blacks, vs. 56% of s and 58% of the general public) Most do not feel that they overspend on unnecessary purchases, with only about one in three across groups (31-37%) saying they spend too much on unnecessary purchases. % Strongly/Somewhat agree Q5. Please indicate the extent to which you agree or disagree with each of the statements below. Strongly agree, Somewhat agree, Somewhat disagree, Strongly disagree Gen Pop White African American/ Black I save money as often as I can * I consider myself to be a planner and try to plan carefully for the future When it comes to investing, I am conservative and am uncomfortable with investments that aren't guaranteed I am comfortable with my spending levels and can afford to spend on 'extras' I tend to spend more money than I should on unnecessary purchases * Among African Americans/Blacks and s, the share who strongly/somewhat agree with I save money as often as I can and with I consider myself to be a planner... does not vary by income or education. For example, regardless of income, more than 8 in 10 s and more than 7 in 10 African Americans/Blacks say that they save money as often as I can. As for overspending, African American/Black women (45%) are more likely than African American/Black men (28%) to say that they engage in unnecessary spending. Bold, asterisk = significant differences between African Americans/Blacks and Gen Pop, or s and Gen Pop 47

48 African Americans/Blacks and s are more likely to be focused on the short-term when making decisions about saving and spending. Attitudes Toward Finances and Money Management More than one in three African Americans/Blacks (37%) and s (35%) plan ahead no farther than the next few months, compared to one in four (26%) among the general public. Just 10% of African Americans/Blacks and 14% of s plan ahead more than 10 years, compared to roughly twice as many in the general public (22%). % Q7. In deciding how much of their household income to spend or save, some people focus mostly on the present while others think about a longer period of time. In planning your saving and spending, how far ahead do you plan? Gen Pop White African American/ Black The next few months or less * 35* The next year * 19* The next few years The next 5-10 years * 16 Longer than 10 years * 14* Lower-income respondents are more likely than higher-income respondents to focus on the short term. Regardless of race/ethnicity, roughly half of those with less than $40,000 in household income focus on just the next few months (51% of the general public, 53% of African Americans/Blacks, and 49% of s with less than $40,000 in income.) Bold, asterisk = significant differences between African Americans/Blacks and Gen Pop, or s and Gen Pop 48

49 Access to money and privacy of finances are universally important Attitudes Toward Finances and Money Management Like the gen pop, more than 9 in 10 s (96%) and African Americans/Blacks (93%) say that it is important to have access to their money whenever they need it. Moreover, nearly as many view banks as safe places to keep their money (e.g., 88% of African Americans/Blacks and 87% of s) % Strongly/Somewhat agree Q18. Please indicate the extent to which you agree or disagree with each of the following statements. Strongly agree, Somewhat agree, Somewhat disagree, Strongly disagree Gen Pop White African American/ Black It is important to me to have access to my money whenever I need it I prefer to keep my financial records private * Bank accounts are a safe place to keep my money These three statements resonated with the vast majority of all groups, regardless of household income, education level, amount of savings, or even (for s) acculturation. Bold, asterisk = significant differences between African Americans/Blacks and the Gen Pop, or s and the Gen Pop 49

50 Direct deposit and online bill paying are widely appreciated features across groups Attitudes Toward Finances and Money Management Like the gen pop, over 9 in 10 African Americans/Blacks and s agree that direct deposit is a benefit of having a bank account. Nearly as many agree that online bill paying is a benefit (80-85% across groups). Over 8 in 10 across groups say they prefer to keep their savings separate from the money used to pay bills. Both African Americans/Blacks (75%) and s (71%) are more likely than the general public (57%) to prefer to pay for things with a debit card. African Americans/Blacks are more likely than the general public to dislike carrying cash (84% vs. 78%). % Strongly/Somewhat agree Q18. Please indicate the extent to which you agree or disagree with each of the following statements. Strongly agree, Somewhat agree, Somewhat disagree, Strongly disagree Gen Pop White African American/ Black One of the benefits of having a bank account is having paychecks and other payments directly deposited I like to keep my savings separate from the money that I use to pay routine bills One of the benefits of having a bank account is being able to pay bills online I don't like to carry much cash with me * 81 I like to pay for things with a debit card * 71* Bold, asterisk = significant differences between African Americans/Blacks and Gen Pop, or s and Gen Pop 50

51 But, majorities also feel that banks charge high fees and prefer higherreturn accounts over checking accounts Attitudes Toward Finances and Money Management African Americans/Blacks are especially likely to feel that banks charge high fees (75% of African Americans/Blacks vs. 68% of the general public) Roughly two in three across groups say that they prefer accounts that make higher returns than checking accounts. One in four s often barters or trades instead of relying on money (25% vs. 19% among the general public) One in six s feels a checking account is not needed (16% vs. 7% among the general public) African American/ Black % Strongly/Somewhat agree Q18/Q5, item #6. Please indicate the extent to which you agree or disagree with each of the following statements. Strongly agree, Somewhat agree, Somewhat disagree, Strongly disagree Gen Pop White Most banks charge high fees * 72 I prefer to keep money in accounts that make higher returns than checking accounts I often barter or trade to get the services or products that I need instead of relying on money * I don't think I need a checking account * Tendency to barter or trade as well as the feeling that they don t need a checking account is more common among lower-income respondents, regardless of race/ethnicity. For example, among those with less than $40,000 in household income, 35% of s, 31% of African Americans/Blacks, and 30% of the general public say that they often barter or trade, twice as high as the share of respondents with incomes of $80,000 or higher who say they engage in bartering or trading. Bold, asterisk = significant differences between African Americans/Blacks and Gen Pop, or s and Gen Pop 51

52 When it comes to investing, saving, or spending money, half or more across groups say their spouse or partner shares their viewpoints, with African Americans/Blacks the least likely to feel this way. Attitudes Toward Finances and Money Management African Americans/Blacks are less apt than the general public and s to say they have similar views as their spouse or partner. For example: Just 49% of African Americans/Blacks say they and their spouse/partner have similar views on spending money, compared to 67% of the general public and 64% of s. % Very/Somewhat similar Q6. Would you say that you and your spouse/partner have similar views or different views on the following matters? Very similar, Somewhat similar, Somewhat different, Very different Gen Pop White African American/ Black Investing * 76 Saving money * 79 Spending money * 64 Base = Married or living with partner. (n=734)-gen Pop, (n=578)-white, (n=383)-african American/Black, (n=558)-s. Bold, asterisk = significant differences between African Americans/Blacks and Gen Pop, or s and Gen Pop 52

53 Other notable findings related to attitudes toward finances Attitudes Toward Finances and Money Management Those who have seen a financial advisor are more apt than those who have not consulted one to plan ahead five or more years when making decisions about saving and spending (e.g. Among African Americans/Blacks who have consulted an advisor, 41% plan ahead five or more years, compared to 17% of African Americans/Blacks who have not consulted an advisor. Among s, the figures are 41% and 26%, respectively. Among the general public, 59% vs. 30%.) Similarly, those with more education and those with higher household incomes are more inclined than those with less education and those with lower incomes to be focused on the longer term (five-plus years): 31% of African Americans/Blacks and 51% of s with a Bachelors degree plan ahead 5 years or more, compared to 20% of African Americans/Blacks and 25% of s with less than a Bachelors degree. 32% of African Americans/Blacks and 43% of s with household incomes of $80,000 or more plan ahead 5 years or more, compared to 17% of African Americans/Blacks and 17% of s with incomes under $40,

54 SAVINGS BEHAVIOR 54

55 Most African Americans/Blacks and s are not comfortable with the amount that they have saved Savings Behavior Just one in three (33%) African Americans/Blacks and two in five (41%) s are at least somewhat comfortable with their savings, compared to nearly half (48%) of the general public. Far less across all groups are very comfortable: 12% of s, 7% of African Americans/Blacks, 10% of the general public Comfort with savings increases with household income and, not surprisingly, with amount saved. For example, 25% of African Americans/Blacks with less than $40,000 in household income are at least somewhat comfortable with their savings, vs. 40% of African Americans/Blacks with incomes of $80,000 or more. Q21. Thinking about all of your savings, how comfortable are you with the amount of money that you currently have saved? Comfortable Very/somewhat Not comfortable Not too much/not at all 48% 51% 52% 49% 33% 41% 67% 59% Gen Pop White African American/ Black = significant differences between African Americans/Blacks and Gen Pop, or s and Gen Pop 55

56 Across groups, a third or more have less than the recommended three months worth of savings. African Americans/Blacks (47%) are especially likely to fall short of the recommended amount. Savings Behavior If they lost their income, nearly half (47%) of African Americans/Blacks and 40% of s say their savings would last 2 months or less, compared to one in three (34%) among the general public. Although the majority across groups say their savings could last 3 months or more, the share is lower for African Americans/Blacks (52%) and s (59%) than for the general public (66%). Among African Americans/Blacks with less than $40,000 in income, nearly half (47%) say their savings would last only 1 month or less. % Q9. Suppose you / (and your spouse )/(and your partner) lost your income suddenly. For how many months would you be able to continue your current lifestyle if you had to rely only on your /( and your spouse's )/ (and your partner's) savings, without withdrawing extra money from retirement accounts? Gen Pop White African American/ Black 1 month or less * 25 2 months * 15 3 months or more * 59* 3 months months months months or more * 30* Bold, asterisk = significant differences between African Americans/Blacks and Gen Pop, or s and Gen Pop 56

57 Three in four or more are currently saving mostly for retirement and emergencies, with some differences by race/ethnicity. Savings Behavior s are roughly twice as likely as the general public to be saving for a home (15% vs. 8%) or to care for an ill/disabled family member (12% vs. 6%) African Americans/Blacks are also more likely than the general public to be saving for a home (14% vs. 8%). % Yes Q19. Are you (or your spouse/partner) currently saving money? (This could include saving money for the future in general, or saving money for particular goals.) Q20. What are you currently saving money for? Gen Pop White African American/ Black Yes, are saving Yes, are currently saving for (among those who are saving) For retirement * 78* For emergencies or for unexpected needs * For vacation For home improvements or home repairs * 56 For college/education (for myself or someone else) * To buy a car To buy a home * 15* To care for a disabled or ill family member * Other/specify Use of Savings Pools: Though relatively uncommon overall (1% among the Gen Pop), savings pools are used by 6% of African Americans/Blacks and 8% of s. s who have been in the U.S. less than 20 years are more likely to use savings pool (13%) than s who were born in the U.S. (4%). Bold, asterisk = significant differences between African Americans/Blacks and Gen Pop, or s and Gen Pop 57

58 Reasons for not saving more money center on limited funds; very few cite unnecessary spending or a lack of knowledge Savings Behavior Among those who are either not saving or are not very comfortable with their level of savings, majorities say they do not save more because they don t have enough money or don t have enough left over after covering necessities. This is especially true among s: 66% of s cite limited funds as a barrier to saving, compared to 58% of African Americans/Blacks and 59% of the general public. s are also more apt than the general public to say they do not know how to save or save more (9% vs. 5%) % Major reason Q22. People have different reasons for not saving money (more money). Why aren t you currently saving (saving more)? I don t have enough money / no money left after paying for necessities (NET) Gen Pop White African American/ Black * --I don't have enough money to save (more) I have no more money left to save after paying for necessities and meeting financial obligations to others I spend too much on unnecessary things I don't know much about how to save (more) * I don't think I need to save (more) Base: Respondents who are either not saving money or are not very comfortable with their level of savings. (n=898-gen Pop, n=693-whites, n=756 African Americans/Blacks, n=796-s) Bold, asterisk = significant differences between African Americans/Blacks and Gen Pop, or s and Gen Pop 58

59 Majorities across groups have not tried to figure out how much they will need to save in order to live comfortably once retired. Savings Behavior Both African Americans/Blacks (32%) and s (34%) are less likely than the general public (43%) to have engaged in this planning exercise Respondents who have used a financial advisor and those with higher household incomes are more likely to have engaged in this exercise. Q38. Have you (or your spouse/partner) tried to figure out how much money you will need to have saved by the time you retire so that you can live comfortably in retirement? Among African Americans/Blacks and s who have used a financial advisor, over half (55% and 53%, respectively) have tried this, compared to 1 in 4 (24%,28%) of those have not used an advisor. Among African Americans/Blacks and s with incomes over $80K, nearly half (48% and 51%, respectively) have tried this, compared to less than 1 in 5 (16%, 19%) of those with incomes under $40K. Yes No 43% 46% 32% 34% 57% 54% 68% 66% Gen Pop White African American/ Black = significant differences between African Americans/Blacks and Gen Pop, or s and Gen Pop 59

60 Roughly six in 10 or more currently participate in employer-sponsored retirement plans; s are the exception Savings Behavior s are less likely than the general public to currently participate (48% vs. 63%). s are also more apt to have never worked for an employer that offers a plan (24% vs. 13%) s who have participated in a plan are also less likely than the general public and African Americans/Blacks to have ever received an employer match (70% of s who have participated in a plan vs. 82% of the Gen Pop and 84% of African Americans/Blacks). Participation in employer-sponsored retirement plan Currently participating Participated in the past Never participated Never offered Gen Pop 63% 18% 5% 13% White African American/Black 48% 58% 65% 18% 21% 9% 18% 5% 10% 7% 12% 24% 0% 50% 100% = significant differences between African Americans/Blacks and Gen Pop, or s and Gen Pop 60

61 The top reason for not currently participating in an employer-sponsored retirement plan is lack of access to such a plan Savings Behavior Nearly half (47%) of s who are not participating in an employer-sponsored retirement savings plan say that they (or their spouse/partner) have never worked for an employer that offers a plan. The figures for African Americans/Blacks and the general public are 31% and 36%, respectively. Other barriers commonly cited by all groups include an inability to afford to save and a reluctance to deposit the funds where they can t be accessed quickly. % Rating as major/minor reason Q13/Q14. For each item, please indicate whether it was a major reason, a minor reason, or not a reason at all that you chose not to contribute money to the retirement plan / that you are not currently contributing money to this type of retirement plan. Major reason, Minor reason, Not a reason I/my spouse/partner have never worked for an employer that offers this type of plan Gen Pop White African American/ Black * I or spouse/partner don't currently work for employer offering plan but have been offered and participated in past * Cannot / could not afford to take that money out of every paycheck Want / wanted to be able to access money quickly if I needed it Don't / didn't know whether money would be safe in the retirement plan Am / was saving for retirement in other types of accounts Do / did not have good advice to help me make the right choices Expect to have enough retirement income from other sources Don't / didn't want to pay a penalty to access the money if I needed it Do / did not have enough information about how it worked Just didn't get around to enrolling Other (specify) Base: Respondents who are not currently participating in an employer-sponsored retirement savings plan, including those who have never contributed and those who have contributed in the past but not now. (n=376 Gen Pop, n=279 Whites, n=322 African Americans/Blacks, n=477s) Bold, asterisk = significant differences between African Americans/Blacks and Gen Pop, or s and Gen Pop 61

62 Other notable findings related to savings behavior Savings Behavior Across the board, those who have a higher education (a bachelor s degree or higher) are more likely to be saving than those with less than a bachelor s degree. (e.g., Among African Americans/Blacks, 83% of those with bachelor s degrees are currently saving, compared to 71% of those without such degrees. Among s, the figures are 84% vs. 71%.) Individuals with more education are also more apt to have tried to determine the amount of money they will need in retirement (e.g., Among African Americans/Blacks, 42% of those with bachelor s degrees have tried to determine this, compared to 28% of those without such degrees. Among s, 43% vs. 32%.) Likelihood to be currently saving increases with household income. (e.g., Among African Americans/Blacks, 92% of those with incomes of $80,000 or more are saving, compared to 73% of those with incomes of $40,000-79,000, and 54% of those with incomes under $40,000. The figures among s are 92%, 78%, and 53%, respectively.) Those in all groups who have consulted a financial advisor are more likely to express comfort with their savings level (e.g., Among s, 61% of those who have used a financial advisor are at least somewhat comfortable with the amount they have saved, compared to 35% of those who have never used an advisor. For African Americans/Blacks, the corresponding figures are 43% and 29%, respectively. Among the general public, the figures are 68% vs. 37%, respectively). 62

63 RETIREMENT: CONFIDENCE AND EXPECTED INCOME 63

64 Less than 3 in 10 across groups express a high level of confidence in their ability to live comfortably through retirement, with African Americans/ Blacks expressing the least confidence. Retirement: Confidence and Expected Income % Confident in ability to live comfortably throughout retirement 8, 9, or 10 Gen Pop White African American/Black When rating their retirement confidence, just 2 in 10 (20%) African Americans/Blacks rate their confidence as a 8, 9, or 10 on a scale from 0 to 10. In contrast, this figure is closer to 3 in 10 among the general public (28%) and among s (27%) Those who have tried to figure out how much they will need to have saved by retirement are more likely to express high retirement confidence. (Among African Americans/Blacks, 33% of those who have tried this calculation are highly confident vs. 14% of those who have not tried. Among s, the figures are 43% vs. 18%. Among the Gen Pop, 44% vs. 17%. = significant differences between African Americans/Blacks and Gen Pop, or s and Gen Pop 64

65 Employer-sponsored retirement savings plans, Social Security, and employment are most often cited as expected major sources of retirement income. Retirement: Confidence and Expected Income African Americans/Blacks and s are more apt than the general public to expect Social Security and employment to be major sources of their retirement income: Social Security: African Americans/Blacks (48% vs. 37% of gen pop), s (47% vs. 37% of gen pop) Employment: African Americans/Blacks (38% vs. 31% of gen pop), s (41% vs. 31% of gen pop) % Major source Q37. For each of the following possible sources of income in retirement, please indicate whether you expect it to be a major source of income, a minor source of income, or not a source of income in your (and your spouse s/partner s) retirement. Major source, Minor source, Not a source An employer-sponsored retirement savings plan, such as a 401(k), 403(b) or tax-deferred annuity, or a thrift savings plan Gen Pop White African American/ Black Social Security * 47* Employment * 41* An employer-provided traditional pension or cash balance plan * 23 An individual retirement account or IRA * 18 Other personal savings or investments outside of a * 18 retirement account, such as mutual funds, stocks, certificates of deposit, or annuities An employer-provided profit-sharing plan Inheritance 5 6 2* 7 Bold, asterisk = significant differences between African Americans/Blacks and Gen Pop, or s and Gen Pop 65

66 Other notable findings related to retirement confidence Retirement: Confidence and Expected Income Those with more in savings and those with greater household incomes express higher confidence in their ability to live comfortably through retirement. Confidence is highest among those with household incomes of $80,000 or more. (e.g. Among s, 44% of those with incomes of $80,000 or more rate their confidence as a 8-10, compared to just 23% of those with incomes of $40-79K, and 15% of those with less than $40K. Among African Americans/Blacks, the respective shares are 31%, 15%, and 10%.) Respondents who have $10,000 or more in savings express greater confidence than those with less saved. (e.g., Among s with $10,000 or more in savings, 37% rate their confidence as a 8-10, compared to just 11% of s with less than $10,000 in savings.) Respondents who have consulted a financial advisor also express higher retirement confidence. Among s, 43% of those who have used a financial advisor rate their confidence as a 8-10, compared to just 21% of those who have not used an advisor. Among African Americans/Blacks, the share who rate their confidence as a 8-10 is similar regardless of advisor use; however, the share who rate their confidence as a 7-10 is higher among those who have used an advisor (46%) than among those who have not used an advisor (34%). Respondents who plan ahead for the longer-term are more likely to be confident about retirement than those who are focused on the short-term. Among African Americans/Blacks, 31% of those who plan ahead for the next 5-10 years or longer rate their confidence as a 8-10, compared to 11% of those who plan for just the next few months. Among s, the corresponding figures are 36% and 14%, respectively. 66

67 ACCESS TO FINANCIAL HEALTH RESOURCES 67

68 Relatively few roughly one in four or one in five across groups say they were raised in a household with good financial health Financial Heath Resources Gen Pop % Rating financial health during childhood as 8, 9, or 10 White African American/Black Those who give themselves a high financial health rating today are more likely to say the same of their financial health during childhood. (e.g. Among African Americans/Blacks who rate their current financial health as a 8-10, 40% rate their childhood financial health as a 8-10, compared to just 15% of African Americans/Blacks who rate their current financial health as a 0-4. Among s, the figures are 32% and 12%, respectively. Among the general public, the figures are 35% and 13%.) With the exception of African Americans/Blacks, respondents with more education are more likely to give their childhood financial health a high rating. (e.g. Among s, 28% of those with a bachelor s degree rate their financial health during childhood as a 8-10, compared to 18% of those without a bachelor s degree. Among the general public, the figures are 28% and 21%, respectively. 68

69 Yet, about half or more say they received at least some guidance from family on how to save money and/or invest Financial Heath Resources Across groups, just over half (52%-55%) say they received at least some guidance from their parents or older relatives on how to save or invest. Advice on budgeting and managing debt was nearly as common, cited by nearly four in 10 or more across groups. s are somewhat less likely to report receiving advice on budgeting (40% of s vs. 47% of the general public), as well as managing debt (37% vs. 45%). % Received advice or guidance from family (A lot / Some) Q49. As a child or young adult, did your parents or other older relatives give you any advice or guidance about each of the following issues? Yes, a lot; Yes, some; No, none Gen Pop White African American/ Black Saving money or investing Budgeting * Managing debt, loans, or credit cards * Receiving guidance from family on financial matters appears to be linked to better financial outcomes. Among s who received a lot of guidance from family related to saving, 45% have more than $50,000 saved, vs. 26% of those who received no guidance on saving. Among African Americans/Blacks who received a lot of guidance from family related to debt, 62% say that debt is NOT a problem for them, vs. 41% of those who received no guidance on debt. Bold, asterisk = significant differences between African Americans/Blacks and Gen Pop, or s and Gen Pop 69

70 Financial assistance from family with post-secondary education or a home purchase is relatively rare, particularly among African Americans/ Blacks and s. Financial Heath Resources Among the general public, roughly one in four (28%) received financial assistance from family to help with college education, and about one in five (22%) received such help on a home down payment. Among African Americans/Blacks and s, these figures are even lower. Although rare, s are more apt than the general public to have received help paying for other education after high school (10% of s vs. 6% among the general public). % Received financial assistance from family Q50. Have you ever received financial assistance from your parents or other relatives to help you pay for Yes, No Gen Pop White African American/ Black College education * 16* Down payment on a home purchase * 16* Other education after high school * With the exception of African Americans/Blacks, respondents who currently have high household incomes are more likely to have received help from family with college education or a home down payment. (e.g. Among s, 23% of those with incomes of $80K+ received help with college education and 26% received help with a down payment, compared to 7% and 8%, respectively, among s with less than $40K in income. The figures for the general public are 39% and 25% of those with incomes of $80K+, compared to 15% and 12% of those with incomes less than $40K.) Bold, asterisk = significant differences between African Americans/Blacks and Gen Pop, or s and Gen Pop 70

71 Across groups, financial advisors are one of the sources most consulted on financial matters. Among African Americans/Blacks and s, friends and family, the Social Security Administration, and banks (s) are also commonly cited. Financial Heath Resources While financial advisors are one of the most frequently cited resources, s and African Americans/Blacks are less likely than the general public to use financial advisors as well as financial services/investments firms. (e.g. Just under one in four s (24%) and African Americans/Blacks (23%) have ever used a financial advisor, compared to over one in three (35%) of the general public. Even fewer currently have an advisor (11% of s and African Americans/Blacks, vs. 24% of the general public). ) Regardless of race/ethnicity, one in five or more say they have consulted friends/family as well as the Social Security Administration. Among s, banks are one of the most commonly used resources, cited by 25% of s, compared to just 14% of the general public. % Yes Q39. To the best of your knowledge, which of the following sources have you (or your spouse/partner) consulted for information on financial matters? Yes, No Gen Pop White African American/ Black Professional financial advisor/financial planner * 24* Financial services or investment firm * 16* Friends or family members Financial magazines or books Social Security Administration Professional tax preparer Financial shows on TV Bank * Q40. Do you (and/or your spouse/partner) currently have a professional financial advisor? Rebased to Total. (n=1002-gen Pop, n=779-whites, n=805 African Americans/Blacks, n=862-s) Currently Have Professional Financial Advisor Gen Pop White African American/ Black In table, percentages in bold with asterisk represent significant differences between African Americans/Blacks and Gen Pop, or s and Gen Pop. (In chart, boxes denote such significant differences.) 71

72 Less widely used, but consulted by some, are credit unions, AARP, and lawyers Financial Heath Resources African Americans/Blacks are more apt than the general public to turn to credit unions (15% vs. 9% among the general public) African Americans/Blacks are also nearly twice as likely to seek out information from AARP versus the general public (11% vs. 6%) The resources least likely to be used for financial consultation are labor unions and community centers. However, s are more inclined than the general public to have used both: labor unions (4% vs. 2%) and community centers (4% vs. 0%) % Yes Q39. To the best of your knowledge, which of the following sources have you (or your spouse/partner) consulted for information on financial matters? Yes, No Gen Pop White African American/ Black Credit union * 9 Lawyer AARP * 7 Public library Class or seminar at a local college Debt counselor 4 3 6* 6 Church 4 3 6* 5 Labor union * Community Center * Bold, asterisk = significant differences between African Americans/Blacks and Gen Pop, or s and Gen Pop 72

73 Across groups, fewer than half have had access to financial education through an employer. s are the least likely to report such access, while African Americans/Blacks are the most likely. Financial Heath Resources Roughly two in five (43%) African Americans/Blacks have worked for an employer that offers financial education to its employees, making them the group most likely to have had access to this education in the workplace. In comparison, s (25%) are the least likely to have had such workplace access. Far fewer (less than one in five across groups) say they have actually consulted an employer regarding financial matters, suggesting that employers may be an under-utilized resource. % Have worked for an employer offering financial education to employees % Have consulted employer (current or former) for information on financial matters* Gen Pop White African American/ Black Access to financial education increases with income and education. (e.g.40% of s with a Bachelors degree have had access, compared to 21% of those without a degree. For African Americans/Blacks, the figures are 59% and 37%) = significant differences between African Americans/Blacks and Gen Pop, or s and Gen Pop Q41. Have you ever worked for an employer that offered financial education to its employees (such as seminars about retirement savings, or written educational materials)? Yes, No Gen Pop White African American/ Black Q39. To the best of your knowledge, which of the following sources have you (and/or your spouse/partner) consulted for information on financial matters? (Chart shows % who responded yes to employer (current or former), ) *Note: Chart above may understate participation in financial education offered through an employer. If the financial education offered in the workplace is administered by a 3 rd party (such as a 401(k) provider or investment firm), the respondent may view the 3 rd party as the source of information rather than the employer. 73

74 Other notable findings related to financial health resources Financial Heath Resources Guidance from Family Among African Americans/Blacks and the general public, those with a bachelor s degree are more likely to have received advice from family about saving and investing than those with less than a bachelor s degree; s are the exception. (e.g., Among African Americans/Blacks, 59% of those with a bachelor s degree received advice on saving/investing, vs. 49% of those without a bachelor s degree.) Among s and the general public, those with higher household incomes are more likely to have received advice from family on several financial matters, including saving/investing, managing debt, and budgeting. This is not the case for African Americans/Blacks. (e.g. Among s with incomes over $80K, 63% received advice from family on saving, 49% on budgeting, 43% on debt, vs. 48%, 30%, and 31% of those with incomes under $40K, respectively.) Financial Advisors Regardless of race/ethnicity, those in higher-income households are more inclined than their lower-income counterparts to have consulted a financial advisor (e.g. Among s with incomes over $80K, 38% have used an advisor, vs. 12% of those with incomes under $40K. Among African Americans/Blacks, the figures are 37% and 11%, respectively. Among the general public, 45% and 16%. Among s and the general public, those who have used a professional financial advisor are less likely to report a problem with debt. (This is not the case for African Americans/Blacks.) (e.g. Among s who have used an advisor, 59% say that debt is not a problem for them, vs. 35% of those who have not used an advisor.) Those who have used a financial advisor are also more likely to report higher savings. (e.g. Among s who have used an advisor, 54% have $50K or more saved, vs. 30% of those who have not used an advisor. Among African Americans/Blacks, the figures are 56% and 25%, respectively.) 74

75 INTEREST IN FINANCIAL INFORMATION AND TRUST OF SOURCES 75

76 Professional financial advisors are seen as the most trustworthy source on financial matters Interest in Financial Information and Trust of Sources s are less likely than the general public to view financial advisors and credit unions as trustworthy (Among s, 75% view advisors as trustworthy and 67% view credit unions as trustworthy, compared to 82% and 78% of the general public, respectively.) African Americans/Blacks are especially likely to view AARP as trustworthy (80% of African Americans/Blacks vs. 68% of the general public.) % Rating as very/somewhat trustworthy Q42. Please rate how trustworthy you feel each of the following would be as a source of information about financial matters. Very trustworthy, Somewhat trustworthy, Not too trustworthy, Not at all trustworthy Gen Pop White African American/ Black Professional financial advisors or financial planners * Credit unions * Banks AARP * 66 Debt counselors Trust of financial advisors increases with income. (e.g. Just 65% of s with incomes under $40K trust advisors as do 73% of African Americans/Blacks and 68% of the general public in this income range, compared to roughly 80% or more of those with incomes of $80K+.) Among s, trust of credit unions and advisors also increases with acculturation. (e.g. 82% of highly acculturated s trust credit unions, vs. 53% of less acculturated s.) Bold, asterisk = significant differences between African Americans/Blacks and Gen Pop, or s and Gen Pop 76

77 The general consensus is that financial advisors can be helpful to anyone, not just people with money Interest in Financial Information and Trust of Sources Still, this leaves three in 10 or more across groups believing that financial advisors are only for people with a lot of money (e.g., 35% of African Americans/Blacks hold this view) Q43. Which of the following best describes your attitudes about professional financial advisors? Advisors are only for people with a lot of money Advisors can be helpful to anyone, even people who don t have much money 30% 29% 35% 31% 69% 70% 64% 67% The belief that advisors are only for people with money is more common among the lower-income. (e.g. 51% of African Americans/Blacks with incomes under $40K feel this way as do 39% of s and 46% of the general public in this income range. Gen Pop White African American/ Black 77

78 Information on saving for retirement and managing money while in retirement are viewed as especially useful and have broad appeal. Interest in Financial Information and Trust of Sources For most of these topic areas, African Americans/Blacks and s are more likely than the general public to express interest. For example, roughly half of s (52%) and African Americans/Blacks (45%) would like advice on creating a budget, compared to just 30% of the general public. % Yes Q44. Below is a list of financial topics. Would information or advice about any of the following topics be useful to you? Yes, No Gen Pop White African American/ Black How to manage your money in retirement How to save for retirement * 71* How to choose the right investments for your needs How to save generally * 62* How to reduce your spending * 56* How to create a budget * 52* How to pay off credit card debt * 44* How to get a job that uses your skills * 42* How to handle mortgage debt * 40* How to pay off other debt (car loans, student loans, etc.) * 38* How to determine if you might be eligible for public benefits to help make ends meet * 41* How to start your own business * 38* How to save for college * 28* How to buy a home * 30* Bold, asterisk = significant differences between African Americans/Blacks and Gen Pop, or s and Gen Pop 78

79 When it comes to preferred method of receiving financial education, no one method stands out as especially popular. Among the more popular are personalized consultations and written materials on paper. Mail and are also top preferences among African Americans/Blacks and s. Interest in Financial Information and Trust of Sources One-on-one consultations hold the broadest appeal, selected by a third or more across groups. s are more than twice as likely as the general public to select television as their preferred vehicle for financial education (27% vs. 13%) % Yes Q45. How would you like to receive financial education or tips on financial topics? Gen Pop White African American/Black One-on-one, in-person personalized consultations * 37 Written educational materials (paper) Educational web site Mail * 37* Books, magazines, newspapers * 33* Group seminar or class, in-person Webinar / Group seminar conducted online Television * One-on-one, personalized phone consultations Radio * 10 App for mobile phone or tablet Social media (such as Facebook, Linkedin, Twitter, etc.) * Other None of the above * Bold, asterisk = significant differences between African Americans/Blacks and Gen Pop, or s and Gen Pop 79

80 A local financial services firm or one s home are generally the most favored locations for receiving financial information, followed by one s bank/credit union and one s place of employment. Interest in Financial Information and Trust of Sources Although a local financial services firm rises to the top among the general public (34%), s (24%) and African Americans/Black (29%) express less interest in this option. An in-home setting holds relatively broad appeal across groups but is especially appealing to s, 40% of whom express interest in this option (compared to 33% of the general public). Your bank or credit union is near the top of the list for s and African Americans/Blacks, with nearly three in ten of each expressing this preference. Place of employment is also near the top for both s and African Americans/Blacks, and is especially appealing to African Americans/Blacks. (28% of African Americans/Blacks vs. 23% among the general public). % Yes Q46. At which of the following types of locations would you like to receive financial information in a group setting or one-on-one? Gen Pop White African American/ Black A local financial services firm * 24* Your home * Your bank or credit union Your place of employment * 27 Public library * 18 Community center * 20* Your place of worship (church, synagogue, etc.) * 9 A local restaurant Other/specify Bold, asterisk = significant differences between African Americans/ Blacks and Gen Pop, or s and Gen Pop 80

81 Other notable findings related to interest in financial information Interest in Financial Information and Trust of Sources Interest in financial topics varies by household income. For example, regardless of race/ethnicity, lower-income respondents are more likely to be interested in how to buy a home, how to get a job that uses your skills, and how to determine if you might be eligible for public benefits. (e.g. Among s, 60% of those with incomes under $40K would like information about public benefits, vs. 19% of those with incomes of $80K or more. For African Americans/Blacks, these figures are 57% and 29%, respectively.) On most of the financial topics presented, lower-income s are more likely than higherincome s to express interest. Such differences by income are not as widespread among African Americans/Blacks and the general public. (e.g. s with incomes under $40K are more likely than s with incomes of $80K+ to express interest in 10 of the 14 topics presented. However, for African Americans/Blacks in particular, interest in many topics is similar--and relatively high-- regardless of income level. (e.g. Among African Americans/Blacks with incomes under $40K, 45% express interest in learning how to pay off credit card debt, which is virtually identical to the 44% of those with incomes of $80K+ who express such interest.) Interest in several of the financial topics also varies by level of savings. (e.g. Regardless of race/ethnicity, those with savings under $10,000 are more likely to express interest in how to create a budget. Among s with less than $10,000 saved, 60% express such interest, compared to 46% of those with $10,000 or more saved. For African Americans/Blacks, the figures are 53% and 40%, respectively. For the general public, 42% and 26%.) 81

82 FINANCIAL HEALTH SCORE 82

83 A financial health score was calculated for each respondent in order to develop an objective measure of financial situation. Financial Health Score The financial health score reflects the following four areas but adjusts for household income in order to focus on the degree to which the respondent has built wealth and is managing debt relative to income:* Networth (adjusted for income) (Total Assets - Total Debt) divided by Household Income Financial Assets (adjusted for income) Financial Assets (cash, savings, and investments-- excluding home/real estate) divided by Household Income Non-mortgage Debt (adjusted for income) Emergency Savings (in months) Debt excluding mortgages (student loans, car loans, credit card debt, loans from friends, other debt) divided by Household Income divided by Household Income Number of months you would be able to continue your current lifestyle if you (and spouse/partner) lost your income and had to rely only your savings without dipping into retirement accounts *See appendix for more information on how the financial health score was calculated. 83

84 Compared to the general public, s and African Americans/ Blacks in particular have significantly lower financial health scores. Financial Health Score African Americans/Blacks and s are less likely than the general public to have a financial health score in the top in good shape range. (8% of African Americans/Blacks and 17% of s vs. 28% of the general public) African Americans/Blacks are especially likely to have a score in the low struggling range. (29% of African Americans/Blacks vs. 15% of the general public) Financial Health Score (% receiving each type of score) In Good Shape On the Right Track Getting By Struggling Gen Pop Median Score (as % of possible points) White GP 58% White 64% 47% African American/Black African Americans/ Blacks 39% 0% 50% 100% Explanation of score grouping in chart: In Good Shape =earned at least 76% of the possible points. On the right track = earned 51%-75% of the possible points. Getting By =earned 26-50% of the possible points. Struggling = earned 25% or less of the possible points. Base: Respondents who answered all questions used in score computation. (n=943-gen Pop, n=735-whites, n=757 African Americans,/Blacks, n=799 s) = significant differences between African Americans/Blacks and Gen Pop, or s and Gen Pop 84