Trends in Retirement Security by Race/Ethnicity
Retirement security decreased during the 2009 global financial crisis and throughout the recession that followed. Before the Great Recession, 44 percent of Americans were at risk of depleting their retirement income. By 2016 that number had increased to 50 percent, despite the economic recovery during the intervening years. This article addresses how retirement security varies by racial group (Black, white) or ethnicity (Hispanic), and discusses ways the crisis and recovery contributed to the six-point higher retirement risk in 2016.
From 2007 to 2016 retirement risk for white, Black, and Hispanic Americans increased. And although the gap in retirement risk between white and Black Americans decreased during this same time, Hispanic Americans fell farther behind both racial groups. This article uses a risk index to measure both the retirement preparedness of today’s working-age households and the risk that a retired household will not be able to maintain its preretirement standard of living.
Differences in wealth contribute to the disparity in retirement risk. Wealth for all households remains lower in 2016 than it was in 2007, meaning the value of household assets has not recovered fully from the 2009 financial crisis. But the 2016 risk index financial data also show that white households now hold roughly six times as much wealth as Black or Hispanic households hold.