Blacks, Latinos, Asians lagging in pension, retirement savings
Paul Kleyman | 12/30/2013, 1:48 p.m.
“Black workers are more heavily represented in the public sector than are other major racial groups,” says the report, which means they are more apt to have the older type of pensions that do not depend on stock market fluctuations.
Latino households are half as likely (12 percent) as white or black households to have a traditional pension. This is partly because far fewer Hispanics work in public sector jobs and are highly concentrated in low-wage industries, the study says.
The new analysis supplements a report NIRS published earlier this year, “The Retirement Savings Crisis: Is It Worse Than We Think?”
The study found that 45 percent, or 38 million working-age households, have zero assets in retirement accounts.
Suggesting possible solutions, NIRS called for strengthening Social Security “to stabilize system financing and enhance benefits for vulnerable populations.”
Social Security for Blacks, Latinos
The NIRS report comes on the heels of a recent paper titled, “Social Security Is Especially Important to Minorities” by economist Paul Van de Water of the Center for Budget and Policy Priorities.
Van de Water’s analysis is a response to a narrower study by the Urban Institute concluding that African Americans and Hispanics as a group pay more in Social Security taxes in a given year than they receive in benefits.
But Van de Water counters that although the share of payroll tax contributions from black and Latino workers in a single year may exceed their share of benefits, “this doesn’t change the fact that African Americans and Hispanics will typically receive above-average returns on their contributions over their lifetimes.”
Van de Water adds, “Low earners are also more likely to become eligible for Social Security disability benefits.” Many more black, Latino and Asian workers tap Social Security disability benefits prior to retirement than whites.
Among seniors, Social Security represents 90 percent or more of income for 35 percent of whites, 42 percent of Asian Americans, 49 percent of blacks and 55 percent of Hispanics, according to Van de Water.
“The fact remains that Social Security is particularly important for minorities,” Van de Water states.
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“Facts on Ethnic Elders” is a monthly column on research findings about ethnic elders present and future. It is supported by a grant from The Atlantic Philanthropies.