• Left unchecked, today's racial wealth gap is likely to remain as bad or worse over the next fifty years
  • We as a society must eliminate the racial wealth gap for moral reasons, but also for economic reasons
  • Consumers will learn the five key changes to make that can eliminate the racial wealth gap for their family compared to the median white family
  • Financial planners will learn the key interventions that can eliminate the racial wealth gap, even if employers and policymakers make no changes
  • Employers will understand how to maximize financial wellness for Black employees


Despite social progress in the last half-century, today's racial wealth gap remains vast: 13 cents in Black wealth for each dollar in White wealth. This paper explores how present-day racial disparities—regardless of their historical cause—will affect the future wealth of an ordinary family of each race.

Using best-in-class financial planning software, we have created an in-depth planning simulation—based on national data from a variety of reputable sources—to capture the financial trajectory of a typical Black and White family. Our probability-weighted model found that in 2064, the White family will possess $2,782,727 in wealth while the Black family's wealth will be $789,164—or more than 70% less. Even if both couples earn bachelor’s degrees, save the same percentage of income into their 401(k)s, and invest identically, the Black family’s wealth still ends up 51% less. For equal achievements and equal work, these two composite families experience drastically different outcomes. This paper examines the role of each of these contemporary disparities—from differing returns on college education to unequal home appreciation rates to inheritances, to name a few—in shaping the next 50 years of the racial wealth divide. Our findings indicate the most significant contributors to the racial wealth gap are wage inequality—due to the lack of equitable support in completing a college education as well as post-education workplace discrimination—and differences in asset allocation. Together, these inequalities prevent Black wealth accumulation with 401(k)s and non-retirement investment portfolios at the same rate as their White counterparts. Directly descending from the legacies of slavery and Jim Crow, these differences are dependent both on institutional realities and, to a lesser extent, individual behavior, and emerge in nearly every realm of financial life.

“As slavery and Jim Crow discrimination erased Black wealth, their consequences and present-day differences in median financial planning assumptions still prevent typical Black families from acquiring the same degree of wealth as typical White families, even with identical educational and professional accomplishments.”


The future wealth divide between median Black and White households
remains relatively unchanged over the next 50 years.

  • ONE

    The baseline social and financial inequities of today will continue to uphold the present racial wealth gap, in spite of the social and economic progress of the last 50 years.

  • TWO

    Most of this disparity comes from two factors—significant gaps in earnings (even after adjusting for education level); and differences in investment and retirement account growth.


    With greater access to objective financial advice, Black families can improve financial outcomes by adjusting their investment strategy and asset allocation: contribute more and increase long-term returns of retirement accounts and other investments.

“Contrary to much work about the importance of inheritance, it’s the combination of incomes, savings rates, and asset allocations that have a much greater impact on the racial wealth gap.”


  • STUDENTS & EDUCATORS Use the significant power of both knowledge and acknowledgment by understanding the many intersections of historical systemic racism and wealth creation, and how even today's inequities are perpetuating the racial wealth gap.
  • FINANCIAL ADVISORS Forge a new path in the financial services industry by learning which financial planning interventions are key to narrowing the racial wealth gap, or use Two Financial Plans to support certain recommendations you're already making.
  • EMPLOYERS Use Two Financial Plans to educate employees on maximizing the benefit of their incomes. Ensure diversity, equity, and inclusion efforts focus on pay equity and other factors identified in the paper as contributors to equitable wealth creation.
  • CONSUMERS Two Financial Plans was written for regular folks to understand the main contributors to the racial wealth gap, and more importantly, what you can do about it. Breakout boxes with financial advice bullet-points make taking action simple.
  • POLICYMAKERS Understand the tremendous impact historical and present-day policies have had on creating the racial wealth gap. Learn which future policy interventions might have the most significant impact on narrowing the future racial wealth gap.


  • 16% Predominantly White school districts receive 16% more funding per student on an annual basis than predominantly non-White districts.
  • 36% The likelihood of hiring discrimination remains unchanged since 1989, with White applicants 36% more likely to receive a callback than Black Americans.
  • $1 Every $1 increase in income adds $5.19 in wealth over a 25-year period for White households, while only 69 cents of wealth for a Black household.
  • 2X A Federal Reserve analysis of 6.4 million mortgage applications found qualified Black applicants are rejected at twice the rate of White applicants.