Why Black Americans Save Less and How Advisors Can Help

Racial disparities have existed throughout America’s history. Unfortunately, they still exist today.

Across multiple income levels, Black Americans were found to have fewer savings than other demographics, according to a recent report from the Employee Benefits Research Institute. For those with incomes of $75,000 or more, 77% of Black workers reported having saved for retirement, compared with 87% of others. Even with an advisor, those patterns can still persist, and they require wealth managers to be aware of all the seen and unseen factors that may be contributing to financial well-being. 

“It’s a bit like driving a high-performance car on a track with unforeseen twists and turns,” said Roland McIntyre, principal advisor of Mountaintop Wealth. “You have the vehicle, you have the coach, but the track itself presents unique challenges.”

More than Data

While the data sheds light onto financial issues facing Black Americans, it doesn’t always give the full picture. For example, the numbers can’t quite capture issues such as the emotional weight of being the first to earn a certain level of income and trying to build generational wealth without a blueprint, said Sheena Gray, CEO of the Association of African American Financial Advisors.

“For many of us, higher income isn’t a green light to save more — it’s a lifeline to support others,” she told Advisor Upside. Often, higher earners are helping aging parents, covering tuition for siblings or nieces, or supporting loved ones. “That’s not mismanagement — that’s legacy in motion,” she added. “But it does mean our savings picture looks different.”

A little less than a third of Black respondents said they worked with an advisor compared with 40% of non-Black Americans, the EBRI report found. Black retirement plan participants were also more likely to take out loans to cover day-to-day expenses and make ends meet, while non-Black participants were more likely to use loans for large purchases like a car or a home. The report found:

• Some 63% of Black Americans earning $75,000 or more a year considered debt a problem for their household, compared with 45% of other workers with the same income
• Black retirees were more likely to retire early due to health problems and disability, continue to work in retirement, and say their lifestyle in retirement was worse than expected.

Empathy is Key. Like serving other groups, advisors need to be empathetic when working with Black clients. Wealth managers should recognize that backgrounds are diverse, and not everyone is coming in with the same generational wealth, responsibilities and goals.

“Black clients aren’t behind — we’re doing multiple jobs at once,” Gray said. “We’re navigating trauma, supporting others and still trying to dream for ourselves. That’s why representation and culturally relevant advice matters. It’s not enough to just have an advisor — that advisor has to see you.”