Updated: Wednesday, April 3, 2024

Background: DCIIA, Morningstar Retirement, and the Aspen Institute Financial Security Program created the Collaborative for Equitable Retirement Savings (CFERS) to explore how and why race and gender retirement savings differences exist and evaluate how plan design and benefits changes influence this over time.

Our inaugural report “How Large are Racial and Gender Disparities in 401(k) Account Balances and What is Causing Them: Initial Findings from the Collaborative for Equitable Retirement Savings,” provides for meaningful insights across workers with access to an employer-sponsored DC plan.

Findings: Our top-line takeaway is that income alone doesn’t explain these differences in contributions by race and gender. Other key findings include:

Black and Hispanic females contribute lower percentages of their salaries than their counterparts after controlling for age, salary, tenure, and plan design variables.

Black and Hispanic workers withdraw a larger portion of their account balances before retirement and take these pre-retirement withdrawals more frequently than their white counterparts. These differences grow more extreme the closer people get to retirement.

Black participants have a higher probability of having an outstanding loan than their white counterparts. At ages 55-59, both Black men and Black women have a 49 percent probability of having a retirement plan loan outstanding – more than any other group.

The report’s simulation results indicate that eliminating pre-retirement withdrawals would substantially mitigate race and gender disparities, particularly for early- and mid-career 401(k) participants.

Bottom line: This project is just getting started. In the coming years, CFERS intends to examine the effect of other options for mitigating the differences in account balances— and ultimately retirement outcomes—between savers of different races and genders.

Get involved with CFERS and consider connecting your data to this important initiative and/or sharing it with other employers. All data is anonymized (no PII) and employers receive a free custom analysis on their workforce.