By Suzanne Woolley
Many white Americans are retiring earlier than planned because they can afford to. But for Black Americans, health problems or disabilities are more likely to force them to stop working prematurely.
That’s one of the findings of a survey recently released that focused on challenges facing Black and Hispanic Americans when saving and preparing for retirement.
The January survey found that Black Americans and Hispanic Americans were more likely than white Americans to say they’d retired earlier than anticipated. Some 53 percent of Black American and Hispanic American retirees said they’d retired earlier than planned, compared with 46 percent for white American retirees.
The top reason for retiring earlier than planned for white Americans, cited by 44 percent, was because they could afford it, according to the survey by the Employee Benefit Research Institute and Greenwald Research. Some 32 percent of white Americans said it was because of a health problem or disability unrelated to Covid.
The top reason cited by Black Americans, at 40 percent, was a health problem or a disability, and 28 percent said they retired early because they could afford it. Among Hispanic American retirees, 40 percent said they retired earlier than planned due to a health issue or disability and 39 percent said it was because they could afford it.
One big obstacle to any kind of savings is debt. More than half of Black American and Hispanic American households with at least $75,000 in annual income said debt was a problem, according to the survey. For white Americans in the same income group, only 37 percent cited debt as an impediment.
Nearly half of Black American and Hispanic American households in that income group said they strongly or somewhat agreed that it’s more important to help friends and family now than save for their own retirement, but the percentage fell to 33 percent for white Americans.
The financial impact of the pandemic came through in the survey results. While 14 percent of white Americans who were still working said that they had pushed out their retirement date since Jan. 1, 2020, 21 percent of employed Black Americans and 25 percent of Hispanic American workers said they’d done the same.
Other findings in the report:
- Among Black Americans with household incomes of less than $35,000, 58 percent said they had savings of less than $1,000, not including their primary home or any defined benefit plan. Thirty-eight percent of white people at the same income level said that.
- Overall, 70 percent of people expect to work for pay during their retirement. But just 30 percent of those who are already retired say they actually worked in a paying job while retired. That could mean that finances for retirees are tighter than they had expected.
- A majority across all groups agreed with this statement: “Preparing for retirement makes you feel stressed.”
More stories like this are available on bloomberg.com.