You and Your Money
Latinos and African Americans Dipping into their 401(k) More than Others to Survive
Photo: Latinos and African Americans Dipping into their 401(k) More than Others to Survive
According to a report by USA Today, Money, Latinos and African Americans dipped into their 401(k) retirement accounts at a higher rate than any other demographic.
The study was co-sponsored by Ariel Investments and it shows that this trend is a dangerous setback for minorities and their long-term retirement security.
Specifically 40% of Latino workers carried a 401(k) loan balance because they had either taken a hardship withdrawal or taken a loan against their retirement funds. Hispanics and African Americans also had a high rate of default on their 401(k) loans. 76% of Hispanics that left their employers then default on their loans.
A majority of Latinos who left their jobs in 2010 cashed out their 401(k) in order to make ends meet versus 39% for white employees that left their jobs.