Why You Should Stop Spending and Start Saving Now
Although you may feel the sting of tight finances now, dipping into your retirement funds and saving account is not the answer to your problems. Your savings presents temporary relief; but the long term financial damage will pop up years down the road. The Sun Times reports that a new report by the Ariel Education Initiative reveals that African Americans are eroding their retirement savings at a frighteningly high rate.
The report shows that over two-thirds of workers withdrew money for unexpected emergencies in 2010. It may have looked like everyone was depleting their funds, but a closer look observes African Americans made up 8.8 percent of those workers and Hispanics made up 3.2 percent. In addition 50 percent of African Americans and 40 percent of Hispanic employees carried a loan balance into 2011 compared to 22 percent of Asians and 26 percent of whites.
“Minority workers disproportionately affected by layoffs feel like they have no choice other than drain their retirement savings in order to make ends meet while unemployed,” Mellody Hobson, president of Ariel Investments said in a press statement.
The reality behind these numbers and percentages is daunting. As Hobson points out, most of the employees who deplete their savings will never be able to rebuild that amount.
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