More than two-fifths (44 per cent) of U.S. Black retirees said they left the workforce earlier than planned due to a health issue or disability, compared to 32 per cent of non-Black retirees, according to a new report from the Employee Benefit Research Institute.
The survey — which polled more than 2,700 American workers and retirees, including an oversample of non-Hispanic Black respondents — found among those who returned to work, two-thirds (66 per cent) of Black employees said they needed the income to make ends meet, compared to 35 per cent of their non-Black peers.
Black Americans with lower and middle incomes were more likely than non-Black respondents to say they felt confident about retiring comfortably. But that confidence gap disappeared at higher income levels, where both groups reported similar levels of optimism.
Read: Fewer than 40% of Black Americans say they’ve saved enough for retirement: survey
Even among higher earners, savings gaps remained. More than three-quarters (77 per cent) of Black Americans said they’d saved for retirement, compared to 87 per cent of non-Black Americans. Non-Black respondents were also more likely to report having at least US$100,000 in savings at every income level.
Debt played a key role in limiting financial security. Nearly two-thirds (63 per cent) of Black Americans earning $75,000 or more said debt is a problem for their household, compared to 45 per cent of non-Black Americans in the same income group.
Black Americans were also more likely to seek help from financial advisors for debt reduction, life insurance planning and estate matters, such as writing a will. Non-Black Americans were more focused on figuring out whether they’d saved enough.
Most respondents said they felt confident managing daily finances, but fewer said the same about saving or investing for the future. Among lower-income groups, Black Americans were more likely than their peers to feel knowledgeable about both day-to-day and long-term money management. That trend didn’t show up in middle- and higher-income groups.
More Black retirees said their retirement lifestyle turned out worse than expected. Many reported higher-than-anticipated expenses and said they had less freedom to spend money as they wished.