THE COLOR OF RETIREMENT INSECURITY:

UNPACKING THE ROLE OF RACIAL DISPARITIES IN

INCOME, WEALTH, AND HEALTH
Dr. Maya Rockeymoore Cummings | October 2017
National Press Foundation
MISSION
The Center for Global Policy
Solutions is a social change
nonprofit dedicated to making
policy work for people and
their environments by
advancing innovative and
effective solutions to our
worlds most critical
challenges.
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VISION
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Solutions envisions a vibrant,
diverse, and inclusive world
in which everyone has the
opportunity to achieve health,
wealth, educational, and civic
success in safe and
sustainable environments.
www.globalpolicysolutions.org
 U.S. Retirement Crisis
Currently, 38 million working age households (45% of the US
workforce) do not have retirement account savings of any kind
(Rhee, 2013).
Fifty seven percent of private sector workers do not have access
to a tax preferred, employer-sponsored retirement savings plan of
any kind (Rhee, 2013).
Of private sector workers who do have access and participate in a
retirement plan, a substantial majority (69%) had only a defined
contribution, or 401k-style, plan while a diminishing few (7%) had
access to only a defined benefit, or traditional pension, plan
(Employee Benefit Research Institute, 2011).
The biggest reason for this gap is that access to employer-
sponsored retirement accounts varies by industry sector,
occupation, size of employer, and whether the job has union
coverage (Hiltonsmith, 2010).
Already economically disadvantaged groupssuch as people of
color and low- income workersare the least likely to have any
other form of retirement savings outside of Social Security
(Hiltonsmith, 2010).

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Median Net Worth by Race/Ethnicity

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Source: Economic Policy Institute
http://stateofworkingamerica.org/charts/homeownership-rates-by-race-1975-2009/
 Private Sector Participants in an Employment Based
Retirement Plan by Plan Type, 1979-2011 (among those
with a plan) Source: EBRI, 2014

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Life Expectancy At Birth By Race and Ethnicity
(Source: National Vital Statistics May 2011 and U.S. Census Projections)
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RECOMMENDATIONS

Better and More Jobs Fair Financial Services

Expand access to low- and no-cost

Major infrastructure investment
financial services

Require investment advisors and brokers

Federal jobs guarantee
to put needs of client first

Implement alternative credit models

Make work pay and pay workers fairly
rather than exclusive use of FICO scores

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RECOMMENDATIONS

Improve Housing Policy Expand Entrepreneurship

Provide target entrepreneurship training and assistance

Ensure mortgage relief programs are transparent and fair through school and community-based career and
technical education

Allow Freddie Mac and Fannie Mae to perform principal

Modernize the Community Reinvestment Act (CRA) to
reduction and loan modifications for distressed
include business lending and investment services
homeowners

Encourage shared-equity loans between private investors Improve data-tracking to measure impact at Minority
and struggling or first-time homeowners Business Development Centers

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RECOMMENDATIONS

More Investment in Kids Make Tax Policy Fair

Enact a universal, progressive baby bond trust Make refundable tax credit expansions permanent
program for every American child and increase the EITC for childless workers

Implement universal pre-K Create a renters tax credit

Develop a first-time homeowners tax credit scaled

Provide equitable education resources in K-12
to income

Expand the Savers Tax Credit to include savings

Expand student debt forgiveness programs
applied to a liquid account

Curb tuition and fee increases at universities Improve the overall fairness of the tax code

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RECOMMENDATIONS
Target New Investments to
Retirement Security for All
Low-Wealth Households

Target 10% of new investments towards 20% of population

Expand Social Security
that has lived in poverty for more than 30 years

When crafting universal policies, use levers to target

Protect public defined benefit plans
resources communities with low wealth

Establish universal retirement savings accounts with a

federal match

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 Principles for Strengthening Social Security
www.ModernizeSocialSecurity.org
Strengthen and Modernize Social Security
Maintain What Works
Increase Access
Improve Economic Security for Vulnerable Populations
Achieve Intergenerational Equity
Ensure Long Term Solvency and Adequacy

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Why Not Raise the Retirement Age?

Raising the retirement age to 69 would result

in about a 14-percent reduction in monthly
Social Security benefits, on average.
Life expectancy is increasing for people in the
upper half of the income distribution while it
has stalled for the bottom half.
.
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