What Lessons Can Those Seeking to Narrow the Racial Retirement Income Gap Draw From Academic Research?
In 2019 the median net worth of non-Hispanic Black households was $24,100, compared with $36,050 for Hispanic households and $189,100 for non-Hispanic white households, with only a slight narrowing of the Black-white gap but a more significant narrowing of the Hispanic-white gap over the previous 30 years (Board of Governors of the Federal Reserve System [Federal Reserve Board] 2020). But, when assessing the adequacy of retirement resources, what matters is not the racial wealth gap, but rather whether household resources are sufficient to achieve some target level of post-retirement income. The exercise involves determining a target and then investigating whether and why minority households are less able to achieve that target.
I choose to compare Black and Hispanic households with white households—not because other minorities, such as East and South Asians, are less important, but because they are too diverse and the sample sizes in commonly used micro datasets are too small to make meaningful statements. I rely mainly on the findings of previous research but supplement those findings with my own analyses of the University of Michigan Health and Retirement Study, a large nationally representative panel survey of older Americans (University of Michigan n.d.).