Americans of all races face the growing prospect of downward mobility in retirement, the report said, but the problem is particularly acute for blacks and Hispanics.
More often than not, blacks and Latinos benefit little from the tax breaks and other policy initiatives aimed at bolstering retirement security because they typically have no money to save for retirement in IRAs and other vehicles outside the workplace, according to Diane Oakley, executive director of the National Institute on Retirement Security (NIRS), which conducted the study. In addition, they are much less likely than whites to have defined-benefit pensions, particularly outside of public sector jobs.
“Those are startling findings,” Oakley said. “The typical household of color has nothing saved in a retirement account.”
The report highlights the retirement security problems looming for a nation grappling with serious debt even as an aging population is demanding more services from government.
A broad sweep of policy makers, including the Bowles-Simpson deficit reduction commission and President Obama, have endorsed trimming future Social Security benefit increases as a way of reining in the national debt.
Charles Blahous, research fellow with the Hoover Institution and one of the trustees appointed to oversee Social Security and Medicare, argued that Social Security has the perverse effect of discouraging cash-strapped people from making a priority of retirement savings.
“A true answer to the problem would mean decreasing our society’s dependence on income transfer programs as a source of retirement income, and increasing the net amount of saving that we do,” he said in an e-mail.
Meanwhile, a host of state and local governments have been cutting back on pension benefits for public employees, saying they cannot afford their long-term cost.
Such public employee pensions, which typically pay a fixed benefit for life, have been of particular help to African Americans, who make up a disproportionate share of government workers. Similarly, trimming retirement benefits will….
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