The December 2018 National Retirement Risk Index (NRRI) research release explores the retirement preparedness of black and Hispanic households, with findings that are worthy of discussion and analysis. Over the 10 years from 2007 to 2016, the percentage of black households at risk of not being able to maintain their standard of living in retirement rose from 52 to 54 percent while the number of Hispanic households at risk rose from 51 to 61 percent. By contrast, during that same period, the percentage of white households at risk rose from 42 to 48 percent.
While the research points to a worsening retirement security gap, it doesn’t address the full extent of the challenges facing black and Hispanic households. For instance, median income for black and Hispanic households was not only much lower than white households in 2016, it had declined since 2007. In addition, a stunning 41 percent decline in Hispanics’ median housing wealth during that period accounts for much of the retirement risk increase for Hispanic households, as Hispanics were especially impacted by the downturn in housing prices between 2007 and 2016.
The findings of the Center for Retirement Research (CRR) are consistent with those of Prudential’s Financial Wellness Census™, which surveyed more than 3,000 adults about their financial health. In the study, blacks and Hispanics reported significantly less retirement savings and are more likely to worry about their financial future. Yet in a bright spot, among households with incomes above $50,000, a greater percentage of black and Hispanic households feel they’re on track to help their children with a down payment of a home, and more are on track to reduce or pay off student loans
Closing the retirement security gap will not be easy, but here are a few things that could help:
- Increase partnering between private corporations and nonprofit institutions.
- Improve access to workplace retirement plans.
- Engage financial services firms in grassroots marketing partnerships with trusted community leaders.
- Increase access to financial wellness programs.
- Read the full report on Black and Hispanic Households Face Retirement Challenges.
Read the CRR Issue Brief, Trends in Retirement Security by Race/Ethnicity.
The National Retirement Risk Index (NRRI), published by the Center for Retirement Research (CRR) at Boston College, measures the percentage of working-age households at risk of being unable to maintain their pre-retirement standard of living during retirement.
Prudential is the exclusive sponsor of the National Retirement Risk Index.
This is being provided for informational or educational purposes only and does not take into account the investment objectives or financial situation of any client or prospective clients. The information is not intended as investment advice and is not a recommendation about managing or investing your retirement savings. Clients seeking information regarding their particular investment needs should contact a financial professional.
The Prudential Insurance Company of America and its affiliates Newark, NJ.