The American Dream hinges on generational wealth: the hope that your children will grow up and be better off than you were. Sadly, for Black Americans, generational wealth has been much harder to attain than their fellow citizens, keeping their American Dream at arm’s length for longer. While many people have made great progress in the name of equality, we ought to be farther along in the 160 years since the Emancipation Proclamation in ensuring Black Americans can build generational wealth.
An important part of Black History Month is remembering the past and looking toward a brighter future. The following statistics are markers on our path of progress and are meant to point the way toward the work we have to do in the future if we want to make sure Black families can build the kind of generational wealth they deserve.
Black Generational Wealth in Numbers
On average, white Americans receive about $195,000 per inheritance, while Black families average about $100,000.
For most, owning a home is the best way to grow their wealth and pass it down through generations. But Black Americans are still less likely to own homes — in 2022’s second quarter, home ownership for Black families was only 45% to the average 75% for white families.
On average, white Americans receive about $195,000 per inheritance, while Black families average about $100,000.
Black homes are typically appraised at lower values when all other factors are equal than homes owned by white families, and white homes on average are worth 2.5 times more than those owned by Black Americans.
37% of Black Americans who grow up in middle-class households drop out of the middle class as adults, while only 25% of white Americans do.
Recessions hit Black families harder than others. The middle-class wealth gap between Black and white Americans widened during the 2008 recession by about 20%.
Even when Black Americans gain wealth through rising incomes, the wealth gap still grows.
40% of Black families cite transferring wealth and leaving an inheritance as the main reason to get life insurance coverage.
Life Insurance is a Solution
A lot of complicated factors contribute to this racial wealth gap — but while structural inequality is slow to correct, there are financial products and solutions that can work wonders in building generational wealth in the meantime. Life insurance not only provides protection against wage loss and funds for final expenses, but also serves as a substantial step towards leaving behind more wealth for your family.
Many Black Americans recognize this important aspect of this financial tool — 40% of Black families cite transferring wealth and leaving an inheritance as the main reason to get life insurance coverage. The knowledge that there are solutions to the generational wealth gap that can be put in place today is empowering. The more life insurers and financial experts emphasize these stories of successful wealth transfer, the closer Black communities might come to financial equality.
FFS Agents — share this post with your networks using our resources in the ABO.