The retirement security gap of Blacks and Hispanics compared to Whites is likely to worsen because of lower earnings and personal savings, warns a report released today by the House and Senate Joint Economic Committee (JEC) Democrats’ staff.
“The median wealth of Black and Hispanic households is on a steady decline; trends suggest that median wealth could reach zero by 2053 for Black households, and by 2073 for Hispanic households, while median White household wealth will have reached $147,000 by 2073,” the report from the Congressional Democratic unit points out.
The JEC was created in 1946 at the same time as the President’s Council of Economic Advisers to be a Congressional counterpart to the White House group.
Overall, half of Americans may not be able to keep their lifestyle in retirement, the report asserts.
“Despite Social Security’s success, the other two major components of our nation’s retirement system– private savings and pensions – are failing hardworking Americans,” the lead Democrat on the committee, New York City Representative Carolyn Maloney says in unveiling the study.
Worries among Americans they’ll fare poorly when they stop working cuts across party lines.
“Sixty-two percent of Democrats, 57 percent of Republicans and 55 percent of Independents fear that they will not be financially secure in retirement,” the study says.
Currently, women and minorities appear destined to live worse in retirement than their white or male counterparts because of a lifetime of lower pay, time spent in unpaid care work and more severe income shocks, the report reports.
The gender gap in retirement security could be shrunk by reducing the pay discrimination women face in their later working years, the authors contend.
Women 55-64 working full-time receive around three-quarters of the income their male counterparts earn.
In addition to saving less for retirement because of pay, women are also at greater risk for financial problems in their later years then men because they have greater exposure to shocks that lead people to withdraw from their retirement savings before they stop working.
Women’s longer life expectancy makes it even more important that they have adequate retirement savings, the report adds.
Across the board, most Americans are ill-prepared for retirement, the report notes.
Three out of every five Americans have no savings at all in retirement accounts.Among those who do, the typical account balance is $40,000—far short of the industry recommended savings target of six times current income at age 50, points out the study.