Many African-Americans have hoped to one day achieve the so-called American Dream. But that vision is fading fast, according to a new nationwide study in Massachusetts Mutual Life Insurance Company’s (MassMutual) State of the American Family series, conducted by Forbes Consulting Group.
Nearly 46 percent of African-Americans believe the American Dream is disappearing. Whether it’s sending their child to college, saving to retire comfortably or taking care of elderly parents, tough times and a lack of information and know-how are making it harder for African-American consumers to make their dream a reality. The reasons, according to the study, are as follows:
• Thirty percent of African-Americans say they know they should be saving for their children's college education, but they don't currently have the money to invest.
• Less than one in ten is confident that Social Security will continue to provide benefits of at least equal value to the benefits received by retirees today.
• One quarter say they have not developed a plan for retirement savings.
• Thirty-five percent feel they should be doing more to save for the future, but right now they are just struggling to get by.
• Twenty-eight percent wished they were more in control of their finances.
• Fifteen percent say that limited credit access is making it harder for them to reach some of their financial goals.
• Twenty-six percent say their financial situation is the number one stress in their life.
"The findings from the “State of the American Family” study were surprising to us because of the degree of concern that African-American families expressed about their ability to meet their financial goals. More than any other group, African-Americans reported that their idea of the American Dream was disappearing (46% vs. 32%). We were aware that the community needed more tools and information to have a sound financial plan, but the research helped us understand that their efforts were seriously being hindered by today’s tough economy," says Nicole Bremser, director, Multicultural Market Development for MassMutual Financial Group."For example, 35 percent (compared to 21% of other ethnic groups) of African-Americans surveyed felt they should be doing more to save for the future, but right now they are just struggling to get by."
According to MassMutual, African-Americans can create a more concrete foundation for the future by doing the following:
• Assessing your family’s financial goals and priorities and then create a long- and short-term strategy.
• Establish a plan for saving now and in the future.
• Seek sound financial information by taking a financial workshop in your community or working with an experienced financial service professional.
"These trends in the study can be reversed with financial education and skilled help. Most importantly, anyone making financial decisions should work with a qualified financial professional who can help them understand the different options available to help them achieve their financial goals," explains Bremser. "Additionally, it’s important to set realistic and firm financial goals and take steps to achieve them. Whether one is planning for retirement, saving for a child’s higher education, purchasing whole life insurance or simply securing the family’s financial future, having a financial plan is absolutely critical."