October 1, 2003
Gearing Up For The Golden Years
Although the retirement outlook for African Americans is not quite golden, more are saving and planning for retirement, a study shows.
Released in May 2003, the Minority Retirement Confidence Survey (MRCS) concludes that, on the whole, retirement confidence for African Americans tends to be lower, and preparations are even further behind the rest of Americans. When household income is held constant, however, there are no statistical differences in confidence between African Americans and workers overall. On the positive side, nearly half of African Americans say they have a general knowledge of investing or saving for retirement.
According to the survey of 1,000 workers age 25 and over, 23% of African American workers count on Social Security to make up the largest share of their retirement income, and blacks are 13% more likely than American workers overall to say they will rely most heavily on Social Security for retirement income. Other sources of income named by a relatively large number of African Americans are savings and investments outside of work (20%) and defined benefit plans such as 401(k) plans through an employer (14%).
William Spriggs, director of Research and Public Policy for the National Urban League and a member of the BLACK ENTERPRISE Board of Economists attributes the disparity to three things: lower income, a lack of access to jobs that offer defined contribution plans (such as a pension), and lower homeownership rates. “We do earn less, so the ability for folks to have adequate savings is more limited, and then we have lower homeownership rates,” Spriggs says. “So taking equity out of the house when you retire and downsizing your lifestyle is a problem.”