WOW’s recent analysis of 2010 American Community Survey data reveals a striking gap between the economic security of white retirees as compared to African-American, Hispanic and Asian retirees age 65 and older.
The figure above shows the percentage of households with incomes above and below the Elder Index—the income retired adults age 65 and older require to age in place and achieve basic economic security—by race/Hispanic origin of the householder.
While older adults face alarming rates of economic insecurity regardless of their racial or ethnic backgrounds, US residents of color are especially at risk of economic insecurity throughout and across the lifespan. During their working-age years, minority adults are significantly more likely to report incomes that fall short of economic security than their white counterparts. WOW’s 2012 research brief finds that, among elder households studied, retired minority adults report household incomes that lag substantially behind those of white retirees. Further, older African-American, Hispanic and Asian adults studied were more likely to have household incomes below the Elder Index regardless of whether or not they cohabit with a partner. Similarly, African-American and Hispanic adults studied are more likely than white retirees to lack security incomes regardless of whether they own their own homes.
Perhaps unsurprisingly, WOW’s analysis also finds that older women of color are particularly at risk for economic insecurity. As the figure above shows, nearly one-half of white women studied live in households with incomes below the US Elder Index; that percentage rises to 61% among Asian women, 74% among African-American women and 75% of Hispanic women studied.
Additional research into the retirement security prospects for women and individuals of color in the Baby Boomer and GenX cohorts is necessary. While some recent analysis suggests that retirement savings accounts may be recovering from the recession and retirement incomes are likely to continue to rise in absolute terms, research also suggests increasing income inequality among retired cohorts is a risk, as is retirees’ decreasing ability to maintain pre-retirement standards of living.
Identifying the implications of these forecasts for already-vulnerable populations, as well as policy levers that may promote increased security for all retirees is a critical goal.