Minorities and Retirement Security (MRS) Minorities and Retirement Security (MRS) Dr. Hervani (PI) Saeid Delnavaz (RA) Third Seminar April 25, 2014 Chicago State University

The Goal For April Integrate everything that you have done together and write a broad research paper that focuses on the overall analysis of your literature review and finding (based on the 32 articles that you have reviewed).

My Equation is as fellow: ­ RS= f (Gender, Race, Education, Marital Status, Household Income) RS= Dependent Variable Gender, Race, Education, Marital Status and Household income= Independent Variable

Studies showed that females experience retirement differently from males. They found that males were likely to have a more positive attitude toward retirement than females. In contrast, female workers were found to be less prepared for retirement than their male counterparts and the 2000 Women’s Retirement Confidence Survey also showed that women had lower confidence and retirement preparation than males. (Kim, Kwon and Anderson) Gender

“Women feel much more vulnerable about their economic security than men: 29 percent of women are worried, while only 19 percent of men are. (Lovell, Hartmann and Williams)” Most important items that effect on retirement insecurity for women: 1) Occupational Segregation 2) Pay Inequality 3) Lifetime Work Experience Lower earnings and fewer years in the work force translate into less retirement income because pensions and Social Security typically reward those with higher pay and more years of paid work.

Because of the demands of 1. child-birth 2. child-rearing 3. adult care Women still tend to experience shorter and more interrupted careers than men do, and are more likely to work either part-time or in low-paying occupations.( Papke, Walker, and Dworsky 2008)

Percentage worried aboutWomenMen Their economic security29%19% Not having enough money to retire on 35%24% Social Security being reduced or eliminated 56%41% Not saving enough for retirement 63%51%

Race Minority workers such as African-American and Hispanic workers, have been reported to have lower retirement confidence and less retirement preparation primarily due to lower income (Kim, Kwon and Anderson) Less than half of African-American (48 percent) and Hispanic (41 percent) workers have saved money for retirement. More than half of African-Americans (54 percent) and Hispanics (55 percent) report having less than $10,000 in savings and investments. one-quarter of African-Americans (27 percent) and Hispanics (23 percent) have tried to calculate how much they need to save for a comfortable retirement.

Both African-Americans (41 percent) and Hispanics (38 percent) are also more likely than workers in general (25 percent) to think Social Security will be a major source of income. More than half of African-Americans (53 percent), compared with 4 in 10 of all workers (41 percent) expect to have access to retiree health insurance through an employer. A larger share of African- Americans (34 percent) than workers overall (24 percent) and Hispanics (18 percent) also think they have private coverage for long-term care expenses. (Helman and Greenwald 2007)

The report finds that while every racial group faces significant risks, people of color face particularly severe challenges in preparing for retirement. Specific findings are: 1. Workers of color, in particular Latinos, are significantly less likely than white workers to be covered by an employer-sponsored retirement plan. 2. Households of color are far less likely to have dedicated retirement savings than white households of the same age. 3. Households of color have substantially lower retirement savings than white households, even after controlling for age and income. (Rhee 2013)

Race White African- American Hispanic Worried about their economic security: Men and Women 22%30%31% Worried about their economic security: Women 27%31%38%

Education also affects retirement attitude. Joo and Pauwel (2002) found that those who had higher levels of education had higher levels of retirement confidence. Education

Less than half of women college graduates think they are doing well in saving enough for retirement (47 percent say they are saving enough). 71 percent of women who lack a high school degree, 64 percent of women who completed high school but did not attend college, and 70 percent of women with some college studies think they should save more. (The comparable numbers for men are 60 percent, 58 percent, and 51 percent, respectively.) But women are not saving enough because they just can’t.

51 percent of women with less than a high school education, 64 percent of women with a high school diploma, 56 percent of women with some college, and 55 percent of college graduates report that they cannot afford to save more for retirement. (Among men, 42, 52, 51, and 63 percent, respectively, cannot save more.) (Lovell, Hartmann and Williams)”

Marital status is also linked to attitude toward retirement. Married individuals were likely to have more positive attitudes toward retirement, while those who were never married had more negative attitudes toward retirement (Turner, et al., 1994). Women with the most comfortable retirement incomes are those who are married and living with their husbands. In 2004, more than 50 percent of such women had household incomes of $35,000 or more. By contrast, women with the lowest incomes are those who are heads of households and live alone. Fewer than one in ten had incomes of $35,000 or more; well over one-half (58.5 percent) had incomes under $15,000 (SSA, 2006). Marital Status

Unfortunately, many older women find that marriage is no protection against poverty. After counting on their husband’s benefits to support them in retirement, they often discover that widowhood or divorce can sharply reduce their income in old age. Today, nearly 60 percent of older women in America are single. They are either widowed (42.4 percent), divorced (9.1 percent), separated (1 percent), or never married (3.6 percent). (Census, 2006A).( Hounsell 2008)

Household Income Household income is critical in understanding attitude toward retirement. Feldman (1994) found that those with the highest incomes (over $75,000) generally had much more favorable attitudes toward retirement than those with lower incomes (under $25,000); those in low-income groups view retirement unfavorably. Additionally, Joo (2002) found that those with higher income (over $50,000) had more positive retirement confidence.

The gap between typical incomes for white elders and African- American elders is almost $5,000; Asian and Hispanic older adults report median annual incomes that are more than $6,000 less than white retirees’ incomes. Racial disparities in retirement income reflect racial disparities in income during adults' working-age years. Minority workers are more likely than their white counterparts to work in occupations that provide lower pay and are less likely to offer retirement plans. (Wider Opportunities for Women, 2012)

At retirement, minority adults therefore tend to have less in retirement savings. At the same time, lifetime earnings and labor force patterns result in Social Security benefits that are typically lower for elders of color than for white retirees. Wider Opportunities for Women, 2012)

Thank You