Sara Routhier, Managing Editor of Features and Outreach, has professional experience as an educator, SEO specialist, and content marketer. She has over five years of experience in the insurance industry. As a researcher, data nerd, writer, and editor she strives to curate educational, enlightening articles that provide you with the must-know facts and best-kept secrets within the overwhelming worl...

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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He also has an MBA from the University of South Florida. ...

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Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Apr 30, 2013

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A new report from the Urban Institute has found that black and Hispanic households have had little to no economic improvement compared to white households. However, there may be opportunities for improvement as the economy rebounds.

The report, Less than Equal: Racial Disparities in Wealth Accumulation, revealed that while having roughly twice the income of blacks and Hispanics, white households had nearly six times the wealth thanks to retirement savings and homes. More beneficial to helping the savings and expenses of all three types of households is the Affordable Healthcare Act.

Caroline Ratcliffe, Senior Fellow at the Urban Institute, told loans.org that Obamacare is expected to have a positive impact on overall debt by reducing bankruptcies and medical debt for households.

Ratcliffe explained that black and Hispanic households are simply on a far different wealth creation path than white households.

“They are less likely to own homes and less likely to have retirement accounts”, she said. “As you pay off a mortgage loan each month you are building wealth each month.”

She also elaborated on the fact that African and Hispanic households have lower home ownership and mortgage loan borrowing rates. Worse still, only about half of all total workers have an employer-sponsored retirement plan. Lower income workers, whom are disproportionately represented amongst blacks and Hispanics, are less likely to have an employer-sponsored plan.

Ratcliffe sees hope in the ongoing economic recovery though.

“The stock market has recovered so people who kept their money in retirement stocks have benefited,” she said. “People who were well enough off to continue investing into stocks are going to benefit.”

She explained that those households that withdrew their money from the stock market would be falling further behind and would have greater difficulty reclaiming wealth. African Americans and Hispanics lost over 10 percent of their wealth during the stock market collapse, while whites only lost 9 percent.

Ratcliffe said that in the housing market, those households that made steady payments on their mortgage loans and kept their homes are likely to experience a wealth increase as the housing market recovers.