As the 78 million boomers--more than 9 million of them Black--continue to make a gradual, but highly visible exit from the workforce, data show that pre-retirement factors, such as income and planning, are key determinants of how well off they will remain financially in their later years.
Boomer and retiree Gilda Austin, of Las Vegas, Nevada, launched her retirement savings plan the day she began her education career by taking advantage of the pension plan made available to her by the Clark County Unified School District.
"As an educator, you don't make a lot of money, especially when you're starting out," said Austin, who retired from the school district as an administrator in 2008. She returned to work as a teacher, to earn more before retiring for good in 2010.
"I was vested in the state, so my pension is nice," said Austin, who left work with about 80 percent of her pre-retirement income. And, she expects her retirement income to surpass her former salary in a few years, because Nevada laws guarantee cost of living raises.
How much is enough for retirement?
Financial planners typically say retirees will need replacement income of 70-80 percent to continue living as well as they did prior to exiting the workforce. Social Security replaces only about 40 percent of workplace earnings on average. Also, public employees in many states are not eligible for Social Security and must rely entirely on their employment pensions, investments, and savings.
Today, of course, educators like Austin and other public service employees are under new pressures, as many states aim to reduce their budget deficits partly by requiring workers to contribute more to their healthcare and pension funds.
Whether in public or private jobs, though, Austin encourages others to take advantage of employee incentives and remain in good jobs as long as possible.
A recent American Association of Retired People report found that Black baby boomers are less likely than others to contribute to a pension plan, when one is available. (Employer-based pensions are now offered to about one in three United States workers.)
"If you are relying on Social Security, invest and find opportunities to make your money grow," Austin said. "You have to set out something--even if it's just $10 a month. You have to save something."
For African Americans and other ethnic groups with low savings rates and a greater portion of individuals in low paying or government jobs, working longer or re-entering the workforce after initial retirement may become the norm, say aging experts.
Data on seniors' incomes analyzed in the federal report, "Older Americans 2010: Key Indicators of Well Being," reveals a gaping disparity between the net worth of Black and White households for those ages 65 and older. For instance, between 1984 and 2007, the median net worth of older Whites more than doubled to $280,000; whereas, the median net worth of Blacks inched up only slightly from $29,700 to $46,000.
Furthermore, a 2010 study by the Center for Economic and Policy Research in Washington, D.C., showed that among African Americans ages 58 or older who continue to work, more than four in 10 have physically demanding jobs and one in three work in difficult conditions.