African Americans Juggle Financial Priorities

April 10, 2013 ( - African American investors report high levels of confidence in their financial future.

However, despite proactive planning and intentional cuts in spending, African American investors remain focused on day-to-day living expenses, with a large majority concerned about having enough money to retire, a Wells Fargo survey found.   

Three in five (60%) African American investors express confidence in their own financial future, slightly higher than the national response (52%), while half (52%) report they are better off now than they were three years ago, same as the general population.   

African American investors are taking necessary steps toward preparing for retirement, as 45% of those surveyed have cut back on their spending to put away money for retirement (compared to 36% of the national population), and two in five (40%) non-retired African American investors have a retirement savings plan in place (similar to the national population, 42%). Among non-retired African Americans, having a plan is most prevalent among those earning more than $100,000 annually (68% earning more than $100,000 have a plan vs. 35% of those earning less than $100,000).

Compared to the U.S. overall, African American investors are less likely to consider themselves financially comfortable (38% vs. 51% overall). More than one-third (36%) of non-retired African American investors surveyed report their biggest financial concern is paying their monthly bills; saving for retirement ranks second at 22%, followed by health care costs at 15%.   

Three in five African American investors are more focused on debt reduction (59%) than saving for retirement. And more than half (52%) of those surveyed are concerned they will not have enough saved for retirement (similar to all adults). African American investors younger than 50 years old are particularly concerned (64%, vs. 39% of those ages 50 and older).   

More than one-third (36%) of African American investors are confident in knowing where to invest in today’s market (compared to 31% of the national population).   

“The optimism and confidence articulated by African American investors is encouraging, particularly as those surveyed are feeling financially better off than they were three years ago,” said Jeff Cosby, financial adviser and vice president, investment officer in the Bloomington, Minnesota, office of Wells Fargo Advisors. “Where we see the biggest opportunity is helping people really consider how they are approaching saving and planning for retirement. It is important for financial advisers to help investors think through long-term strategies for investment planning, while also providing guidance on common concerns like how to balance paying off debt while continuing to save for retirement.”

Living in multi-generational households also has a significant impact on African American investors' savings, as a number of respondents are caring for their own children, as well as aging parents or grandparents. One in five (20%) African American investors surveyed report living in three-generational households. Three in four (77%) African American adults surveyed who live in three-generational households are concerned they will not save enough to support themselves in retirement, compared to just 46% of those outside of multi-generational households.   

Almost three-quarters of African American investors (73%) are optimistic about the political direction of the country, significantly higher than the general population (43%), while four in five (83%) feel the U.S. economy will improve in the next two years (compared to 47% of the general population). Seventy-two percent of those surveyed expect their local economy to improve in the next two years (compared to 45% of the overall adult population), and nearly three in four see improvements in their local housing market (71%, vs. 54% nationally).   

The survey findings are based on an online survey conducted November 9 through December 3, 2012, among 1,105 adults nationwide (500 African American adults). Qualified respondents were non-students, ages 25 to 75, who are the primary or joint financial decision-maker in the household with household investable assets of at least $10,000.