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Financial Insecurity in Retirement for Black Americans

An overview of how systemic inequity affects retirement preparedness.

To address racial inequalities, we must acknowledge they exist and understand the reasons why. Here, we leverage the Federal Reserve's Survey of Consumer Finances to explore factors that threaten financial security for many Black Americans while highlighting opportunities we see in our Fidelity research and insights to help close the financial wellness gap among underrepresented employees. 

*Charts and information for this article were  taken from  the Fidelity Artilce "What threatens financial security in retirement for Black Americans." 

What is Social Security. You'll make a lot less than you think.

Social Security Is Important to African Americans Social Security is neutral with respect to race or ethnicity – individuals with identical earnings histories are treated the same in terms of benefits. This Fact Sheet is provided by the Social Security Administration to highlight how African Americans benefit from the Social Security program and how certain demographic characteristics of African Americans compare with the entire population. 

The Social Security system is progressive in that lower-wage earners receive a higher percentage benefit than higher-wage earners do. The system returns a greater percentage of pre-retirement earnings to a lower-wage worker than to a higher-wage worker. African Americans who are low-wage workers receive back more benefits in relation to past earnings than do high-wage earners. 

In 2019, the median earnings of African Americans, aged 15–64, who worked full-time for 50 weeks or more, were $40,000 compared to $50,000 for all races. 

In 2019, the median earnings of African American men aged 15–64, who worked full-time for 50 weeks or more, were $40,000 compared to $38,300 for African American women.

In 2019, the average annual Social Security income received by African American men 65 years and older was $14,409 compared to $12,806 for African American women. 

According to the Centers for Disease Control and Prevention (CDC), African Americans have lower life expectancies than other races at age 65. 

African Americans receiving benefits are helped by Social Security's cost-of-living protection which guarantees a benefit that is annually adjusted for inflation. 

The African American population in the U.S. is expected to grow. Today, about 13.4 percent of the population is African American. This proportion is expected to grow to 13.8 percent by 2030 and to 15 percent by 2060. 

This fact sheet is designed to provide general information and does not apply to all individuals within the African American population. January 2021 SSA Press Office 440 Altmeyer Building 6401 Security Blvd. Baltimore, MD 21235 410-929-4774 FAX 410-966-9973