African Americans and Retirement
Retirement
What is retirement? Retirement is being able to enjoy the fruits of your labor. After an individual has worked many years for a job, they should be able to enjoy life with their hard, earned money. However, when deciding when to retire it all boils down to the money; the economical side of it. Some may opt for early retirement, but retirement will not be an option due to the lack of funds saved. For others, there might be more of a choice when it comes to their decision to leave the workforce. Unfortunately, for African-American’s there is a different fate. The reasons are simple and it is due to the pay/wealth gap, financial literacy, and overzealous spending.
According to the 2015 Black Investor Survey, “67% of African-Americans are invested in stocks or mutual funds, compared with 86% of whites (Sykes, 2016).” Middle –class African-Americans are more optimistic about the state of the U.S. economy and they are more likely to be invested in the stock market, but are behind when it comes to retirement. One reason solely being because they have different attitudes and challenges around saving for retirement.
Wealth
Growing up in the South I’d often hear people speak about certain folk being wealthy. It was almost common to hear on a daily basis. You’d hear things like, “Oh, Johnny comes from a wealthy family, his family, the Jones owns the restaurant on Main Street and they have several other small businesses.” Wealth is a major important measure of economic health. Being wealthy allows families to transfer earned income in the past to meet the spending demands in the future, by building up savings to finance a child’s education. Wealth is also needed to finance a comfortable retirement and to provide an inheritance to children. In order to build wealth there has to be steady well-paid employment during one’s working life is important, it allows for a decent standard of living plus the ability to save.
Pay/Wealth gap
Wealth is something that is crucial. The gap is entwined in housing discrimination and wage disparity. Wealth simply allows families to transfer income that has been accumulated in the past to meet spending demands in the future. Having wealth provides a security blanket when unemployed or for periods of taking risks. More importantly it is needed to continue a comfortable lifestyle after retirement. The pay/wealth gap has always been an issue amongst African-Americans. Segregation and the legacy of having wealth kept the racial wealth gap from closing.
During the Great Recession, there was a period of high-interest and high leverage mortgages that led to a wealth disaster for African-American families afterwards. After the recession was over the unemployment rates for African-Americans rose twice as high as the whites, which lead to higher rates