U.S. Retirement Crisis has ‘Racial Component’
By Jazelle Hunt NNPA Washington Correspondent | 1/17/2014, 6 a.m.
“A lot of retirement investment success comes from word of mouth, from transfers, from legacies. Our history doesn’t go back as far with retirement investments, as opposed to just saving what we do have,” says Braxton, who is also the CEO and founder of planning and investment firm, Financial Fountains. “But if you put what you have in retirement for the future, does that leave you with enough for the right now?”
Rhee makes similar connections in analyzing her report’s findings. “The recession did a number on family wealth, especially for communities of color who tend to hold wealth in housing as opposed to stocks, bonds, and other investments,” she explains. “Plus with the shift in structural changes, loss of manufacturing and other jobs…the past few decades have been challenging for Black families.”
Interestingly, workers who deliberately seek or currently have employer-sponsored DB pensions are more likely to also have their own retirement accounts as well. It seems that the more information and opportunity provided, the more workers will contemplate and plan for their financial futures.
“A lot of people just don’t have access to this information. They’re not taught in high school…where are the opportunities to get this information in ways that are easy to understand, and affordable?” Braxton says.
Rhee says the report has national policy implications of the report, including strengthening Social Security, supporting small-business employers’ ability to offer retirement benefits, and calling for state-based retirement systems. Braxton sat those approaching retirement should make adjustments now.
“[Near-retirees] have to look at their lifestyle. Housing, medical, and debt costs are the biggest expenses,” she recommends. “You have to be realistic about where you are, and come up with a plan that keeps income for as long as possible, and really hash out expenses that can be draining.”