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Many retired Blacks still rely on Social Security

Joseph Wright | 7/7/2010, 5 p.m.

The Social Security system is one that Black people have relied on for years. As of this year, Blacks in the United States are more likely than Whites to expect Social Security to be their major source of income during retirement, according to the Joint Center for Political and Economic Studies.

Because of this, Blacks and other non-Whites often have different views on proposals for reforming the Social Security system in America.

For many, Social Security is seen as a means to escape poverty. Elderly non-Whites are more likely than aging Whites (only 7.9 percent of whom are poor) to experience poverty. Social Security plays a key role in raising the incomes of many people of color above the poverty line. Aging non-Whites are less likely than elderly Whites to receive private retirement benefits.

"Additionally, Blacks are far less likely to have asset income," said Nathan James, economic specialist with Santa Barbara Savings and Loans. "That includes interest on bank accounts and investments, dividends, rental income on property, and estates and trusts."

According to American Association of Retired Persons (AARP), Blacks make up about nine percent of the elderly population in the U.S., but represent 21 percent of the elderly population living below the poverty line. In fact, AARP found that nearly one quarter of all elderly African Americans live below the poverty line.

"If the monetary benefits from all public programs were excluded from their incomes," commented Noelle Perry, an account executive with Jennings & Wilson Equity, "more than 60 percent of elderly African Americans would be poor. When Social Security is counted, the rate drops to about 30 percent. When the income from other public programs is also counted, 21 percent of elderly Blacks remain poor."

Among non-Whites, Asian Americans are the least likely to rely on Social Security. However, the poverty rates among elderly Asians is still 12 percent, which is higher than the rate for U.S. Whites.

Location is another factor in Social Security dependency in the U.S. The rural elderly have higher rates of poverty than the urban elderly, and rural areas tend to have a higher population of old people than the urban areas. These higher numbers are due to a combination of economic pressures forcing younger rural citizens to migrate to big cities in search of jobs, and the tendency of the rural elderly to "age in place," according to James. "Rural people are less likely than city people to leave their homes when they retire," the economic specialist said. "Elderly residents of rural areas may have less access to necessary services and rely more heavily on private transportation." But in addition to location, there are other factors affecting the elderly in their struggle with poverty and Social Security.

Although economists and demographers expected large volumes of people to leave the workforce as the first "baby boomers" reached age 60 in 2006, the weakened economy caused by former President George W. Bush's administration, and rising health care costs are causing many aging Americans to delay retirement. The percentage of U.S. residents ages 55 to 64 in the workforce increased from 63.3 percent in 2008 to 64.8 percent in 2009, according to the U.S. Labor Department. That represents a jump of more than a million workers. Many elderly Blacks and non-Blacks alike, who retired and were collecting Social Security, have re-entered the work force due to Bush's failed economic policies.