The pervasive racial wealth gap has been at the forefront of many conversations for years – and with good reason.
The Brookings Institute reported that Black families are worth about $17,150 compared to the $171,000 a typical white family has. That is nearly ten times greater. This is shocking, but not new information to Thasunda Brown Duckett, President and Chief Executive Officer of TIAA, a Fortune 100 provider of secure retirement and outcome-focused investment solutions to millions of people working in higher education, healthcare, and other mission-driven organizations.
Duckett came to TIAA after serving as Chief Executive Officer of Chase Consumer Banking and other financial institutions, along with serving on the boards of NIKE, Inc., Robert F. Kennedy Human Rights, and the Economic Club of New York.
On April 11, she sat down with John C. Williams President & CEO, Federal Reserve Bank of New York and Chair of the Economic Club of New York for a webinar event to discuss the state of racial equity, and her work to combat BIPOC financial disparity. Here are some key insights she offered during the conversation.
On the Importance of nurturing the next generation of investors.
Millennials and Gen z’ers are a growing force in the investment markets and Brown Duckett says its imperative to help guide them along the way.
“Our future is our youth,” she shared. “I do think our young people are very intellectually curious when it comes to markets. Now they’re talking about everything. I think the job to be done for us is to not dismiss if they’re not interested, but to figure out a way to connect. That is the challenge of today because we do know the power of compounding. We do know that 40% Americans will run out of money. We do know that more needs to happen later on in your career. And so I take it as an opportunity to translate it in a way that our young people will understand. A dollar today is worth more than one dollars tomorrow. And putting aside a dollar today for retirement, putting aside a dollar today to save and invest is absolutely preparing yourself for all of your hopes and dreams that you want to accomplish and all those passion projects on how you want to impact the world. You will have a better shot of doing that by making decisions earlier on and maxing out on their 401k.”
On the future of work.
With the recent push from employers to get workers back in office after a large portion of labor market has spent the last two years working virtually, Brown Duckett addressed what that meant for workplace culture looking ahead.
“There is no back to normal,” she said. “Nor do I want fully back to normal. Here’s what we all know, and I think we all experienced some of these key facts: we had the technology, and during the pandemic, we were able to use it in a way that we never thought was possible. We know that we all dispelled myths, and we realized that all of our employees, I think from everyone I’ve talked to, that employees demonstrated they can be productive working remotely. The way I think about the future of work is we just inherited more plays in the playbook. I think we learned so much more about our people than ever before. The realness is, after a while we just got tired of trying to dress up for work. And I think we were all just like, okay, here I am, putting what matters first, the work. And so the future of work. goes back to, what is the future of your culture? The future of work is not about who’s doing five days, three days, two days. I think it’s about saying, let’s take a look at who we are. Let’s take a look at these new plays that we have. And how do these new plays inform and can be productive within our culture? Because ultimately, whatever they go forward in the future, work has to still deliver on the needs for our stakeholders and for the needs of our people.”
On transformation in financial services
The racial wealth gap has proven to delay the possibility of retirement for the Black community, largely because of pay inequity and lack of financial education during prime working years. It has been reported that among current retirees, the median retirement income in 2019 was $23,292 for Whites, compared to $16,863 for Blacks and $13,560 for Latinx.
Brown Duckett says being open to diverse portfolio options (within reason for one’s lifestyle) can be the key to creating a more linear path towards wealth creation in BIPOC communities. When asked whether cryptocurrency should be considered as a component of retirement portfolios, she shared that there are other challenges to overcome first.
“I lead a retirement company, and it’s all about making sure that we have high confidence that when people are ready to retire, they get the best shot at being able to retire with dignity,” she shared. And so I think right now crypto is not in our discussion, but you always stay curious, and you have to understand it. I think it has a lot of volatility, it has a lot of uncertainty, and that’s not something that is a big focus for us as a retirement company.”
She shared that acknowledging and tackling racial inequality is always at the forefront when advising on larger financial conversations.
“What keeps me up at night is when I think about how my professional North Star is tackling economic inequality,” she said. “If we all tallied up all of our public commitments, if we all tallied up all the things that we’re doing over the years, how are we doing as a collective? When we look at our report card, do we see the economic divide reducing? Do we see more people of color on a path to create wealth, or are we going in the wrong direction, recognizing that women make $0.82 on the dollar and are retiring with 30% less? We have to retire inequality, period. And so that keeps me up at night. I hope it’s something that keeps all of us up at night because ultimately, if we are able to close the economic side, we will unlock tremendous future GDP for our country. We will unlock tremendous opportunities because people are not carrying that load of not being able to just make basic needs, not being able to meet their basic needs. I would also say leading a company that’s over 100 years old, just staying laser focused, that competition is all around us, and that acknowledgement that your past success, the strength of our balance sheet, our mission, all of these things that make our company great cannot be the only thing that you are betting on to make your company relevant in the future.”