The Social Security Administration encourages applicants for its research grants to examine “structural barriers that may contribute to disparate outcomes among people who have been marginalized, discriminated against, or adversely affected by persistent poverty.”
Many studies emerging from this research agenda reveal profound differences in how older Black and White Americans access work and retirement. Research has been done by researchers across the country, and many have been compiled on this blog over the past year, which is also supported by Social Security assistance.
Consider some studies that align with the central argument made by financial advisors — that the best path to retirement security is for older workers to delay enrolling in Social Security as long as possible to increase their monthly benefit checks. “Last long” is the mantra of millions of Americans who have not saved enough to maintain their standard of living in retirement.
But three recent studies document the serious problems that are forcing many Black workers to retire early. The first is their relatively poor health. A 51-year-old black woman has the health of a 69-year-old white woman according to some research. A black man, 51 years old, has the body of a 64-year-old white man.
Extreme hardship is also placed on Black workers due to the hazardous or toxic environments many are exposed to throughout their careers. They are more likely to hold this type of job than White workers, and Black workers in these jobs are more likely to cite poor health as a reason for retirement. They also turn to applying for federal disability benefits at twice the rate of older White workers. There is a financial cost to retirement from leaving the workforce early, which causes a decrease in income.
Social Security is the financial backbone of many US retirees. The program has some value to Black workers because they tend to earn less. Social Security fixes this by giving low-wage workers a larger percentage of their retirement income than a well-paid worker would receive. Social Security carries another, less obvious toll on Black retirees because there is so much uncertainty in their life expectancy, one study showed. For healthy black retirees who are living longer, that reliable monthly income is important.
But Social Security is not designed to provide enough income, by itself, to live comfortably. America’s retirement system also relies on workers to save for retirement. A longstanding problem is that the financial wealth of Black workers is a fraction of the wealth of Whites. A recent study with new information on the wealth gap finds that wealth inequality is increasing as people retire and age.
In the years leading up to retirement, older White households have six times more in their 401(k)s than older Black households. That increases tenfold after retirement. A small amount in savings creates a problem for black retirees who own their own homes. While many retirees are struggling to make mortgage payments after their incomes drop, black homeowners are struggling, according to another study.
Black workers face many inequities in the workplace, from low pay and discrimination from employers to heavy work that puts unnecessary strain on their bodies. This imbalance leads to retirement.
The research study reported here was conducted in accordance with a grant from the US Social Security Administration (SSA) funded as part of the Retirement and Disability Research Consortium. The opinions and conclusions expressed are solely those of the authors and do not necessarily represent the views or policy of SSA or any agency of the Federal Government. Neither the United States government nor any of its agencies, nor any of its employees, makes any warranty, express or implied, or assumes any legal responsibility or liability for the accuracy, completeness, or usefulness of the contents of this report. Reference herein to any particular commercial product, process or service by trade name, trademark, manufacturer, or otherwise does not imply endorsement, recommendation or favor by the United States Government or any agency thereof.
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