Notes: 2016 dollars. Liquid retirement savings include dollars in accounts such as 401(k), 403(b), and IRAs. Median liquid retirement savings for black and Hispanic families were zero from 1989 to 2013. Median liquid retirement savings for whites were zero through the mid-1990s, about $1,500 in 1998, and $10,000 in 2016.

In 2016, white families had about $130,000 more (or six times more) in average liquid retirement savings than black and Hispanic families. In sheer dollar terms, this disparity has increased more than fivefold over the past quarter-century: in 1989, white families had about $25,000 more (or five times more) in average retirement savings than black and Hispanic families. This gap is becoming more important as liquid retirement savings vehicles, like 401(k)s, replace more traditional defined-benefit pension plans.

Why does this gap exist? It’s not just income differences; even at the same income level, gaps remain. Black and Hispanic families have less access to retirement saving vehicles and lower participation when they have access. But lower access and participation isn’t the full story.

Black workers are somewhat less likely to participate in employer retirement plans than white workers (40 percent versus 47 percent in 2013, respectively) but have much lower average liquid retirement savings. This suggests that simply having more employers offer retirement plans will not be enough to close the gap, especially if lower-income groups contribute smaller portions of their income to retirement plans and are more likely to withdraw money early to cover financial emergencies. Lower-income families may also get lower returns on average if they invest in safer, shorter-term assets.