Only 26% of Latino Families Have Retirement Accounts — Plus More on Investments, Net Worth by Race

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It’s no secret that there has been and continues to be a racial wealth gap in the U.S., and that carries over into retirement readiness.

According to MagnifyMoney’s analysis of the latest data from the Federal Reserve’s Survey of Consumer Finances, only 26% of Latino families and 35% of Black families had retirement accounts in 2019, compared with 57% of white families.

While work remains to close this gap and bolster financial futures, there have been some small, yet encouraging, signs of improvement since 2016 — here’s what we discovered.

Key findings

  • Latino families have a median retirement account value of $31,000, while Black families have a median account value of $35,000. The median value for white families — $80,000 — is 258% and 229% higher, respectively, than that of Latino and Black families.
  • The percentage of Latino families with retirement accounts has dropped by 14% since 2016, when 30% of families had these accounts. The percentage of white families with retirement accounts has dropped by 5% since 2016, when 60% of families had such accounts. Black families with retirement accounts saw a 4% growth in that period.
  • 24% of Latino families hold stocks with a median value of $15,000, 34% of Black families hold stocks with a median value of $15,000 and 61% of white families hold stocks with a median value of $50,750.
  • Only 4% of Latino families and 7% of Black families invest directly in the stock market, compared with 19% of white families.
  • Black families’ median net worth of $24,100 is 13% that of the $189,100 median net worth for white families in 2019. While wealth among Black families rose by 32%, or $5,860, since 2016, it’s still 1% less than what it was in 1998. During that same period for white families, median net assets grew by 25%, or $38,143.
  • At $36,050, the median net worth for Latino families is 19% that of white families in 2019. However, that median represents a growth of 64%, or $14,013, since 2016, compared with a 4% growth for white families.

Financial assets by race: By the numbers

When we talk about financial assets, we’re discussing retirement accounts, stocks and other managed assets. It doesn’t include nonfinancial assets, such as cars or houses, that still impact one’s overall financial status.

By percentages

White families are showing stronger retirement readiness than both Black and Latino families. While 57% of white families reported having retirement accounts in 2019, only 35% of Black families and 26% of Latino families did.

The differences in stock ownership are similarly divided, with 61% of white families owning stocks in 2019, versus 34% of Black families and 24% of Latino families.

The percentages of families who invest directly in the stock market are similarly disproportionate by race. Only 4% of Latino families and 7% of Black families do so, compared with 19% of white families.

By values

So, how much are those assets worth? Again, we see significant differences across races. The median retirement account value in 2019 was:

  • $31,000 for Latino families
  • $35,000 for Black families
  • $80,000 for white families

When it comes to stocks, average holdings in 2019 were:

  • $15,000 for Black families
  • $15,000 for Latino families
  • $50,750 for white families

By 3-year changes

Here’s where we’re seeing some positive momentum among certain families of color. While the percentage of white and Latino families with retirement accounts and stocks dropped from 2016 to 2019, it rose in that period for Black families.

3-year change (2016 to 2019) in selected financial assets by race
Retirement accountsAll stocksDirectly held stocksPooled investment fundsOther managed assets
Median holdings33%18%50%203%-70%
Percent who have holdings4%7%45%4%-35%
Median holdings27%31%114%228%135%
Percent who have holdings-14%-14%3%-42%-54%
Median holdings-2%-7%-6%-12%-2%
Percent who have holdings-5%0%6%-10%9%

Source: MagnifyMoney analysis of Federal Reserve data

Between 2016 and 2019, the percentage of Latino and white families with retirement accounts dropped 14% and 5%, respectively. However, the percentage of Black families with retirement accounts grew 4% during that same period.

Nonfinancial assets

A quick note on nonfinancial assets, such as cars and real estate: Only Black families saw a decrease (2%) between 2016 and 2019. Latino families and white families saw increases of 4% and 1%, respectively.

Examining the Latino-Black-white wealth gap

There remains a pronounced division in the wealth gap between Latino, Black and white families. The median net worth — assets minus debt — for Latino families is 19% that of white families. For Black families, it’s 13% that of white families.

The statistics do show some recent gains for families of color. Latino families saw their median net worth rise 64% between 2016 and 2019. From 1998 to 2019, their median net worth has increased 133%.

Black families haven’t fared as well financially between the extended periods, with their median net worth falling 1% between 1998 and 2019. The needle shifted, however, with the median net worth rising 32% for Black families between 2016 and 2019.

White families have continued to see growth, but at lower rates. Between 1998 and 2019, the median net worth of white families rose 25% — but just 4% between 2016 and 2019.

How to narrow the racial investment and wealth gaps

Much work still needs to be done to narrow the racial investment and wealth gaps. Doing so can make a huge impact on the economy as a whole. According to an August 2019 report from McKinsey & Co., the U.S. gross domestic product could be 4% to 6% higher by 2028 if the racial wealth gap were closed.

Some necessary changes to narrow the gap may be institutional in nature, such as changing tax, job and other policies. However, there are also things that can be done at the individual level.

Bank with minority-owned institutions

Make sure to consider institutions owned by people of color. “Banking with minority-owned institutions is important, because these banks often work to combat the wealth disparity gap through various programs and offerings for minority communities,” said Ismat Mangla, content director at LendingTree (which owns MagnifyMoney). “When you support these institutions, you are supporting the organizations that are actively focusing on the problem.”

Consider community development financial institutions (CDFIs)

Another way to support disadvantaged communities is to choose to bank with a CDFI. These banks and credit unions offer many of the same services as traditional institutions, but they also offer more flexibility for those who might not be eligible for traditional services. Their focus is to help revitalize their local communities.

Invest in your interests

When choosing to invest your hard-earned dollars, choose companies that have a mission you believe in. Do you research to find out how they’re run and how they’re involved in supporting minority communities.

Budget for investing

While it’s often difficult to find extra money for investing when you’re just trying to cover the day-to-day bills, it’s possible with enough scrutiny and sacrifice. Look for ways you can save, no matter how small — even 3% or 5%. “The important part is taking the first step and being consistent,” Mangla said. “Then, you can increase that number by another percentage point every year or every six months.” MagnifyMoney can help you find a financial advisor.

Understand why you’re investing

Retirement often seems like eons away, but understanding the beauty of compound interest working for you can help you realize how important investing can be for your future. It may make putting that money away a bit easier when you realize just how much it can grow over the years with interest.

Take advantage of employer-matching programs

When it comes to 401(k) and other retirement plans, some employers will offer to match employee contributions up to a certain amount. While it may be tempting to pocket more take-home pay, not contributing at least up to the amount that will be matched is walking away from money.

Use a robo-advisor

One of the easiest ways to start investing money is to use a robo-advisor. “Robo-advisors offer an excellent way to access low-cost investing advice,” Mangla said. “Traditional portfolio management services often require high balances, but robo-advisors are accessible to a wider swath of investors, especially beginners.”


MagnifyMoney researchers analyzed data from the Federal Reserve’s Survey of Consumer Finances from 1998 to 2019. New data is collected every three years and released the next.

The “Find a Financial Advisor” links contained in this article will direct you to webpages devoted to MagnifyMoney Advisor (“MMA”). After completing a brief questionnaire, you will be matched with certain financial advisers who participate in MMA’s referral program, which may or may not include the investment advisers discussed.