En español | Right in the middle of all the rumbling about income inequality and the 99 percent, the University of California-Berkeley released a study recently highlighting another type of inequality.

See also: 10 things you need to know about Social Security.

Poverty rates are twice as high among older African Americans and Latinos (PDF) compared with the older U.S. population as a whole, the survey found.

That hit me hard, but so did the study’s other findings. During their working lives, African Americans and Latinos generally held lower-paying jobs that rarely offered pensions or even the employer-sponsored savings programs, like 401(k)s, that are so crucial to a secure retirement.

This left those two groups relying on Social Security for a greater share of their income than other ethnic groups — and their lower lifetime earnings resulted in smaller Social Security checks. Claiming early resulted in even smaller checks.

That study painted a pretty bleak financial picture for the lower-income members of these two minority groups. Even among higher-earning minorities with access to savings vehicles, studies show that too many people are entering retirement with not enough money saved for their future.

Why is that?

According to a February study from the ING Retirement Research Institute, it’s not for lack of trying, at least not among middle-income African Americans.

ING looked at white, African American, Hispanic and Asian American groups making at least $40,000 a year. Of those groups, more African Americans said they had contributed money at least once toward their employer-sponsored savings plans, and more African Americans said they were taking advantage of their employers’ offers to match their contributions.

Still, Asians and whites had higher average account balances than African Americans, leaving more African Americans and Hispanics less secure in retirement.

Perhaps because everyone in the survey made at least $40,000 a year, income inequality wasn’t the primary problem.

Instead, debt was the culprit.
 
When you’re diverting your would-be retirement savings to pay debt, you’ve taken the magic of compound interest and put it to work against you. Instead of earning interest on the interest in your savings account, you’ve got debts that are accumulating interest, and interest again on top of that.

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