When the Federal Reserve Board issued its Survey of Consumer Finance (SCF), its findings were not surprising. The report, which is issued every three years, reflected the improved economic conditions since 2010, when the Great Recession was at its peak. The unemployment rate, though unevenly distributed, has dropped, and income and wealth have increased for some groups, but dropped for those at the bottom. Median wealth of African Americans and Latinos (grouped together by SCF reporting) fell from $21,000 to $18,100 while White wealth grew from $139,900 to $142,000. Just under half of all African Americans own homes, compared to nearly 70 percent of Whites, and housing value represents the largest portion of net worth for middle income families. When some of these SCF findings are combined with what we know about pensions and retirement preparedness, the unfortunate conclusion is that African Americans are less ready to retire than Whites, but better prepared than Latinos.

Sixty-two percent of African American households and 69 percent of Latino households have not one penny saved for retirement, along with 37 percent of Whites. When there are savings, they have been paltry—the average household has just $12,000 saved. As a result, many predict a “retirement crisis” and increasing poverty among the elderly. Some say they will avoid poverty by continuing to work, perhaps for all of their lives. Given the incidence of illness and disability among the elderly, projections for lifetime work may be unrealistic.

Some older people, but increasingly fewer, will receive pensions; with the most steady being employer-funded pensions. Other forms of retirement savings, including 401-4 or IRA savings are less reliable forms of retirement income. Because African Americans are more likely than others to work for governments, they will receive pensions that will have cost-of-living adjustments each year, but some states and some cities have put pensions on the chopping block when they experience fiscal crises. When Detroit faced a manufactured economic crisis, for example, pension cuts were proposed as one of the ways to achieve economic balance. Tellingly, more than 60 percent of these pensioners were African American. Even more appallingly, financially troubled municipalities saw the Detroit case as a forerunner of their own attempts to reduce their pension obligations.

In any case, 81 percent of all public employees have an employer-sponsored pension plan, compared to 52 percent of private employees. Overall, 62 percent of Whites have pensions of any kind, compared to 54 percent of African Americans and 36 percent of Latinos. Those numbers will drop as fewer employers offer pensions, and as the number of self-employed and part-time workers increases.

This means that African Americans and Latinos will find social security income an essential part of retirement income. According to Paul Van de Water of the Center for Budget and Policy Priorities, 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.

The retirement data is reflective of much of what we know about income, wealth, and economic progress. Some will suggest that this economist has, in the past year, written inconclusively about economic data. That’s because the data has been inconclusive overall, but almost entirely negative for African Americans, especially those on the bottom. Even the best-off African Americans, those with college degrees and six-figure incomes, experienced wealth disparities, and have lower savings than similarly situated Whites. Unfortunately, many at the bottom spend like middle-income people, with incomes so low that such spending contributes to debt.

Meanwhile, Consumer Reports says that based on current economic conditions, consumers are ready to spend. Nearly one in eight has purchased a home, nearly half plan home improvements, and one in four say they are ready to make life changes by marrying or having children. More than half plan to purchase small electronics, and many are poised to purchase larger electronics. When these spenders are African American, the best way they can guarantee a financially stable retirement is to jog past the big box stores and head straight to the bank to set up, or add to, a retirement account.

Julianne Malveaux is a D.C.-based economist and writer and president emerita of Bennett College for Women.

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