https://orcid.org/0000-0002-6632-1654
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Dania V Francis, Christian E Weller, Retirement Inequality by Race and Ethnicity, Public Policy & Aging Report, Volume 31, Issue 3, 2021, Pages 83–88, https://doi.org/10.1093/ppar/prab009
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Workers have to accumulate substantial savings to supplement Social Security benefits. Yet, retirement inequality has grown over the past four decades (Munnell et al., 2021). The gap in retirement security between those who are more and those who are less likely to face a secure retirement has widened, in particular, by race and ethnicity. A large and growing number of African American, Latino, and many Asian American households have less wealth to supplement their Social Security benefits than white households, as a review by the authors shows (Francis & Weller, 2021b).
A large and growing number of African Americans, Latinos, and many Asian American households have less wealth to supplement their Social Security benefits than white households.
Multiple factors contribute to this growing inequality. First, people of color are less likely to inherit wealth from their families, and thus need to save more on their own to achieve the same level of retirement security as white families. White households have historically benefited from many advantages in wealth accumulation, including but not limited to slavery, Jim Crow laws, and current-day systemic racism. These wealth advantages are passed on intergenerationally through inheritances, large gifts, and access to larger and wealthier social networks, as a review by Weller et al. (2021) shows. People of color also often face discrimination in labor markets that lowers their odds of getting well-paying, stable jobs with decent health and retirement benefits (Ajilore, 2020; Gould & Wilson, 2020; Solomon & Weller, 2018). Additionally, households of color frequently face financial and housing market discrimination that leads to higher debt loads and lower housing asset valuation: key factors that affect retirement savings (Baradaran, 2019). Fourth, many people of color have to contend with higher costs for health care before and during retirement due to outright discrimination, health-care provider biases, and lack of access to providers (Maxwell, 2020). Finally, the systematic lack of wealth and access to stable, benefited jobs among communities of color often requires that family and friends help each other out financially, putting an additional strain on their limited collective wealth (Toney & Hamilton, 2020). In the end, many African American, Latino, and Asian American households and other households of color end up with less retirement security due to greater risks and costs during their careers and in retirement.
