When it comes to retirement savings plans, African Americans and Hispanics participate less often, contribute less money, and take out more loans and early withdrawals than our white and Asian counterparts. Those are among the most eye-opening findings from a study by my company's nonprofit affiliate, Ariel Education Initiative, and Hewitt Associates. We recently partnered with several leading minority organizations to release 401(k) Plans in Living Color: A Study of 401(k) Savings Disparities Across Racial and Ethnic Groups. The study examined the saving and investing behaviors of 3 million eligible African American, Asian, Hispanic, and white workers in 57 of the largest U.S. companies across a variety of industries and sectors. The findings reveal that race and ethnicity play a significant role in investing, showing up in 401(k) positioning, contributions, and ultimately individual balances. First and foremost, black and Hispanic workers don't participate in 401(k) plans as much as white and Asian workers do. More than three-fourths of eligible whites and Asians contribute to their 401(k) plans, but only two-thirds of African Americans and Hispanics do. Among those who save, white employees set aside about 8% of their income, while Hispanics and African Americans commit roughly 6%. Some of these differences result from other factors, but even taking those into account, black savers contribute 11% less than whites. Compounding the problem, we also tap our savings before retirement more often. About 40% of all African Americans and 30% of Hispanics have withdrawn loans against their plans, double the figure for whites. African Americans and Hispanics also are much more likely to take hardship withdrawals than other Americans. African American and Hispanic workers also invest more conservatively, another reason that we generally have lower account balances. African Americans devote 66% of their portfolio to equities; Hispanics allocate 70%, while whites have 72% in stocks. Because stocks boast the highest long-term returns, investors who devote less money to them will grow their money more slowly. The end result is that for workers earning between $30,000 and $59,999, average 401(k) balances are $21,224 for African Americans, $22,017 for Hispanics, $32,590 for Asians, and $35,551 for whites. In the end, each individual is ultimately responsible for his or her retirement nest egg. Even so, employers and government can address these disparities. 1. Encourage employers to voluntarily collect and report 401(k) plan data by race and ethnicity. This would enable employers to know and manage where gaps exist. Knowledge is power. 2. Modify loan requirements to decrease the likelihood of default. Extending the amount of time an employee has to pay off a loan after leaving a job may improve overall retirement savings. Other options could include allowing loan repayments after termination or exploring new options for allowing loans to roll over from one employer to another. 3. Mandate financial education at all levels in both private and public schools to boost financial literacy. A national financial literacy curriculum would provide generations of future employees a comprehensive understanding of both the mechanics (and importance) of sound money management, saving, and investing. 4. Design 401(k) plans in a way that benefits a broad employee base. Features like automatic enrollment with high default contribution rates and periodic contribution increases can go a long way, driving participation across demographics. 5. Communicate with and educate employees in a way that helps them make wise choices. Creating user-friendly and easily understood communication enables workers to learn more about how to effectively manage and grow their savings. This communication should include different cultural perspectives. Leveling the playing field is up to all of us–employees, employers, and government institutions. Fixing these disparities is mission critical for our country. If we don't tackle the issues, and soon, the notion of a comfortable retirement will be just a dream and never a reality for far too many of us. Mellody Hobson is president of Ariel Investments L.L.C., a Chicago-based money management firm serving individual and institutional investors. She is also a regular contributor to ABC's Good Morning America. This article originally appeared in the October 2009 issue of Black Enterprise magazine.