Retirement should be a time of ease, relaxation, and enjoyment after a long career spent earning an income. However, too often, this isn’t the reality for retirees of color due to systemic inequality that affects their savings and overall retirement health. This blog by Goldstone Financial Group will explore how structural racism has created racial disparities in retirement security and what can be done to fashion more equitable outcomes for older adults of varying backgrounds. From historic income inequalities based on race to data revealing modern impacts, this post digs into the roots of retirement inequity and why it’s so important to recognize these issues today.
Goldstone Financial Group Discusses The Racial Roots Of Retirement Inequality
According to Goldstone Financial Group, retirement inequality has become an increasingly controversial topic in the United States in recent years, with a growing disparity between white and non-white households when it comes to retirement savings. While much of the conversation around this issue focuses on economic disparities, such as income or access to employer 401(k) plans, there is also a deep racial history that has contributed to the current situation.
To begin unpacking this history, we must first look at slavery and its lasting effects on African Americans today. During the years of legalized slavery in America, African American workers were not allowed to own property or even keep their wages beyond immediate needs. This meant that they were unable to accumulate any sort of wealth or savings for old age—a stark contrast from their white counterparts. Even after emancipation, Jim Crow laws and other forms of discrimination prevented African Americans from accessing the same educational and employment opportunities that were available to white people. This, as per Goldstone Financial Group, meant fewer job opportunities for African Americans and much lower wages than if they had been able to work in the same fields as whites.
The long-term effects of this disparity are still felt today: African American families have significantly less wealth and are far less likely to own their own homes or businesses compared to white families, meaning they have far fewer resources to draw upon during retirement. In addition, even when non-white households do manage to accumulate some savings, studies have shown that those savings are often depleted more quickly due to financial hardship in retirement—likely because these households have fewer resources to draw upon and are more likely to have higher healthcare costs.
Goldstone Financial Group’s Concluding Thoughts
According to Goldstone Financial Group, the upshot of this history is that retirement inequality in America is deeply rooted in racism. Even today, African Americans suffer from significantly lower wages and limited access to job opportunities and educational resources compared to white people—all of which contribute to a large gap in retirement savings between the two groups. It’s clear that addressing these underlying inequalities must be part of any effort to improve the outlook for workers approaching retirement if we want to achieve true financial security for all Americans. Only then can we begin to remedy the long-standing racial disparities when it comes to building wealth and achieving financial stability during old age.