Money Musings 💭 it's all connected💰
Every area of our personal finances are connected. When one area suffers, it impacts all the areas. Retirement is one of those areas.
It's expected that half of the people in the United States will not have enough money in retirement. The numbers are far worse for people of color and women.
There are reasons that are specific to retirement, like less access and eligibility to contribute to a company 401(k). Only 54% of Black and Asian employees and 38% of Latino employees ages 25-64 work for an employer that sponsors a retirement plan, compared to 62% of white employees.
But most of the other reasons are things we’ve heard before. Wage gaps allow for less money to go to retirement.
Mass incarceration in the United States, outside of its devastating non-financial consequences, also depresses job prospects, wages, and wealth building. It’s expected to impact one in three Black babies born today.
We are approaching our 12th year with a federal minimum wage of $7.25. This paltry minimum wage disproportionately impacts people of color and women, doesn’t allow for living, let alone any money left over to save for retirement.
The share of Americans earning less than $15 has fallen steadily over the past six years — and become increasingly female and increasingly Black and Hispanic.
Each area of our financial lives are all completely interconnected. They each impact the others. This compounds all the financial issues we talk about here.
That’s why there’s not only a racial wage gap, but also a racial wealth gap, a racial investing gap and a racial debt gap, and a racial retirement gap, among many other gaps.
But the good news is, that also means the solutions will have an exponential impact.
A change in policy, like raising the minimum wage, can positively impact every area of someone’s financial life.
During Women’s History Month I had the honor of hosting a roundtable called Closing the Gaps. You can learn more about what needs to be done from these incredible women.
MONEY MOVE OF THE WEEK
PULL YOUR LATEST 401(K) STATEMENT.
Opting into a 401(k) plan should be a (fairly) straightforward process, but I hear from so many people that don’t understand what it really is or how it works. A 401(k) is a “tax-advantaged” retirement investment account offered by your employer, meaning that investing in it lowers your taxable income. Plus, you don’t pay taxes on your investment earnings. Win, win.
You typically contribute a percentage of your income, have certain investment options to choose from and in some cases your company might match your contributions up to a certain percentage. If you’re not sure what’s happening with your 401(k), pulling the latest statement is a great place to start.
In there you can see:
How much you have invested
What that money is invested in
How much you are contributing per paycheck
Figuring out what you have and where is a great start to retirement planning. If you’re ready to do more check out this retirement guide.
YOU GOTTA SEE THIS
CELEBRATE PRIDE MONTH.
Happy Pride, all! 🏳️🌈🏳️⚧️To celebrate the LGBTQIA+ community this month, I’ll be committing myself (and encouraging you all!) to buy from, invest in, and promote businesses owned and led by the LGBTQIA+ community.
It’s also a great time to step back and reflect on how you (in whatever role you’re in) can make sure those in the LGBTQIA+ community feel welcome, included, and invited to be themselves in the workplace and the spaces that you are a part of. Advocate for equality.
In addition to using our dollars to celebrate Pride, I encourage you all to connect with the LGBTQIA+ community through education. Here are some lists of documentaries (I’m still working through them!) that I hope to see this month. If you have your own recommendations for resources, please share them with me. I’m always learning, and I appreciate that so many of you are doing the same!