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Black and Hispanic Households Face Retirement Challenges

Dec 20, 2018

Key Takeaways

  • Income and housing wealth are main obstacles to retirement preparedness for blacks and Hispanics.
  • A lack of wealth transfer across black and Hispanic families has exacerbated the financial situation.
  • While deep-seated and problematic, the dialogue must continue on how to address these challenges.

 

Over the 10 years from 2007 to 2016, the percentage of black households at risk of not being able to maintain their standard of living in retirement rose from 52 to 54 percent, the Center for Retirement Research (CRR) at Boston College found using the NRRI. During that same period, the number of Hispanic households at risk rose from 51 to 61 percent. By contrast, the percentage of white households at risk rose from 42 to 48 percent.

A stunning 41 percent decline in Hispanics’ median housing wealth during that period accounts for much of the retirement risk increase for Hispanic households, according to the CRR. Hispanics were especially impacted by the downturn in housing prices between 2007 and 2016.

While the latest NRRI points to a worsening retirement security gap for black and Hispanic American households, it doesn’t address the full extent of the challenges facing black and Hispanic households.

Median income for black and Hispanic households was not only much lower than white households in 2016, it had declined since 2007. Clearly, the income gap between white households and black and Hispanic households has worsened.

The findings of the CRR are consistent with those of Prudential’s Financial Wellness Census ™, which surveyed more than 3,000 adults about their financial health. In the study, blacks and Hispanics reported significantly less retirement savings and are more likely to worry about their financial future. Yet in a bright spot, among households with incomes above $50,000, a greater percentage of black and Hispanic households feel they’re on track to help their children with a down payment of a home, and more are on track to reduce or pay off student loans

Closing the retirement security gap will not be easy, but here are a few things that could help:

  • Increase partnering between private corporations and nonprofit institutions.
  • Improve access to workplace retirement plans.
  • Engage financial services firms in grassroots marketing partnerships, with trusted community leaders.
  • Increase access to financial wellness programs.

Percentage of U.S. households at risk of not being able to maintain their standard of living in retirement

  2007 2016
Black 52 54
Hispanic

51

61
White 42 48

Read More

To view a summary of the results, read Black and Hispanic Households Face Retirement Challenges  .

 You may also be interested in other Financial Wellness topics.

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