Get Serious About Your Retirement

By Maya Mackey

I’ll admit, the folly of youth did not allow me to care much about this topic. I was fortunate enough to have an older coworker looking out for me several years ago who implored me to contribute ten percent of my check to the 401k retirement plan offered by my employer. 

“Ten percent?” I gasped. I was already putting a percentage away for health insurance and then there were the involuntary taxes. “They’re taking all of my money,” I cried. Nevertheless, my sage of a mentor and colleague, Paula, insisted it wasn’t that much and that I’d appreciate it once I got older. And she was right.

Another folly of youth was taking it out prematurely a year ago to help me survive an unemployment spell. Even still, I didn’t sweat it too much “Well, I’ll just build it back. I’m only 30. I have time.” And while there’s truth to that notion, facing end-of-life transitional costs for a loved one has created a personal motivation to think about retirement for once. 

The type of care needed and the costs required to attain it has me taking a much harder look at my own physical and financial health. And I know I’m not alone. Retirement isn’t something a lot of us think about until it’s too late. We know one day we’ll have to but knowing something is important and actually preparing for it are two different things. And if you’re Black, failure to plan for retirement is more costly than you think. 

A 2023 report by The U.S. Government Accountability Office shows that the road to a comfortable retirement is pretty bleak for Americans right now and the gap between who can and can’t retire well is only widening. Adjusting for the cost of living and median incomes in 2022 dollars, white Americans who were low-income earners had 4.5 times what low earning

Black Americans did for their retirement. 

White middle class and high income earners had double that of Black people in the same financial bracket. The reality is there are real barriers to working class people of “color” being able to contribute to a stable future. Black, Indigenous and Latinx workers are more likely than white workers to earn lower wages, have little to no emergency savings and if they do, are far more likely to dip into their emergency or long term savings accounts in order to care for their families. 
This same study reported that low income earners are often contributing between five to eight percent of their paycheck into retirement compared to ten to fifteen percent of their White colleagues. And there are still more who don’t have access to a work sponsored retirement account at all. The following quote from the Aspen’s Institute Leadership Forum nails the dilemma perfectly. “If you don’t have income sufficient to cover day-to-day bills and accumulate the short-term savings needed to handle emergencies, how will you be able to save for the longtime but if your

primary or full-time job isn’t helping you  contribute to a retirement fund, take matters into your own hands while you’re still young and full of energy.

1. Check your state’s lost asset site. Gone are the days of lifetime employment. The average person will hold a minimum of 12 jobs in their lifetime. And if each of these jobs offers a 401k, it’s hard to keep track of all the times your money moves. Luckily, nowadays, you don’t have to.  A quick google search of  “Unclaimed Property or Funds” can show you what, if any, accounts you still have money in and help you rollover the funds to a current account.

2. Investigate an IRA (Individual Retirement Account). Although we place a lot of responsibility on whomever our current employer is, you don’t have to wait on them to open a retirement account.  You can open up a traditional (deferred tax) IRA or ROTH IRA (taxed up front) and adjust your level on contribution over the years

3. Invest! No doubt, learning how to invest and grow your money can be anxiety inducing. Most of us were not blessed with financially astute parents. And even if you did grow up with well off parents, money remains a taboo topic in many households. As an adult, deciding how you want to live and what you want your money to do for you is a task you’ll have to take on. Thankfully, we get to exist in the age of YouTube, Google and TikTok. Watch videos, read books and blogs. Utilize your local library and attend free tax preparation and financial literacy classes. 

4. Invest not only in a retirement account but a high yield savings account and stocks. Make it a community effort and pull money alongside your coworkers, family, friends or other sources of community. Buy a restaurant franchise and split the earnings evenly.

5. Practice year-round self-care. The high costs of retirement are usually due to terminal illness. The better care you take of your mind, body and spirit, the lower or later your odds are at diseases such as Alzheimer’s or diabetes. Quit poor health habits now to delay difficulty in your later years. Ensure that you are eating healthy, drinking enough water and getting regular physical and mental exercise.

These are just a handful of ideas to get started but whether you heed these tips or find your own (like moving abroad to lower cost of living), I hope you’ll learn from others past mistakes and get serious about your retirement well before you think you need it. Time is of the essence.