Older African Americans and Asset Holding

Transcription

1 Older African Americans and Asset Holding Trina R. Williams Shanks University of Michigan Wilhelmina A. Leigh Joint Center for Political and Economic Studies Presentation at Conference Financial Capability Across the Life Course: Focus on Vulnerable Populations Washington University in St. Louis October 24-26, 2012

2 Predictors of Asset Deficit Among Older African Americans

3 Labor Force Participation by Race and Age Group, 2010 (Percent) Black Americans 18 White Americans Ages Ages Ages 65+ Source: U.S. Bureau of Labor Statistics, Labor Force Characteristics by Race and Ethnicity, 2010 at

4 Poverty Rate, by Race and Age, 2010 (Percent) Ages Ages African Americans White non-hispanics Source: DeNavas-Walt, Proctor & Smith, Income, Poverty, and Health Insurance Coverage in the United States: 2010 at

5 Amount Saved by Workers (25 and Older) for Retirement, by Race/Ethnicity, % % 72% $250,000 or more $100,000 - $249,999 $50,000 - $99, % $25,000 - $49,999 Less than $25, % % 13% 11% 7% 7% 10 14% 7% 6% 4% 4% 0 All workers African American workers* Hispanic workers * Percents do not sum to 100 due to rounding EBRI Minority Retirement Confidence Survey

6 Evidence of Asset Deficit Among Older African Americans

7 Net Worth and Homeownership Among Household Heads 55 and Older, by Race, 2009 Median Net Worth (Including Home Equity) Median Net Worth (Excluding Home Equity) Homeownership Rate (Percent) Black American $37,100 $5, White American $250,000 $110, Source: Tabulations from 2009 Panel Survey of Income Dynamics (PSID)

8 Pensions or Annuities Received by Aged Units 65 Years or Older, by Race, 2010 Private Pension or Annuity (Percent) Public Pension Other Than Social Security (Percent) Median Income from Employer Pension Black Americans $14,148 White Americans $12,380 Source: Social Security Administration, Income of the Population 55 or Older, 2010 at

9 Older African Americans Are Highly Dependent on Social Security 73.6 Black % or More White % or More 100% Percent of Income from Social Security Among Beneficiary Units Ages 65+ (2010) Source: SSA, Income of the Population 55 or Older, 2010, Table 9.A3 at

10 Recommendation 1 Change the legislation and regulations that govern defined benefit retirement plans to make them more attractive to employers and thereby more widely available to employees.

11 Recommendation 2 Increase monthly Social Security retirement benefit payments to lifetime low-wage earners.

12 Recommendation 3 Lessen the disadvantage embedded in the Social Security benefit formula for beneficiaries who never marry.

13 Recommendation 4 Modify the formula used to calculate Social Security benefits payable to the widowed spouses of lifetime low-wage workers.

14 Recommendation 5 Provide job and career training/retraining to enable low-wage workers to increase their lifetime earnings.

15 Recommendation 6 Enhance job flexibility and type of benefits provided to better meet the needs of the workforce 55 years and older.

16 Recommendation 7 Create a universal child development account model that allows children to build assets for the future.

17 Recommendation 8 Update and streamline current incentives in the tax code so that low- and moderate-income households have the opportunity to prepare and save for key life events.

18 Recommendation 9 Expand availability of accounts dedicated for retirement so that everyone has the opportunity to receive matched savings for use in old age regardless of employment history.

19 Discussion and Conclusion o African Americans are frequently in the most vulnerable economic circumstances. o In terms of policy, they need greater supports when young as well as ways to increase and preserve assets during retirement. o The United States rarely considers how policy shifts might impact low-income African Americans. o Promoting and prioritizing economic security is essential.