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Black Americans, on average, report higher incidences of lower incomes and assets coupled with higher likelihoods of problematic debt. At the same time, lower income Black Americans are more likely to feel confident about their retirement prospects and feel as knowledgeable about financing their day-to-day finances as their non-Black counterparts, according to a new research report, “2025 Retirement Confidence Survey: A Closer Look at Black Americans,” published by the Employee Benefit Research Institute (EBRI) and Greenwald Research.
For those with incomes of $75,000 or more, 63% of Black Americans considered debt a problem for their household compared with 45% of non-Black Americans. As a result, Black Americans in the same income groups were more likely to say debt is impacting their ability to save for retirement or to live comfortably in retirement.
The 35th annual Retirement Confidence Survey measured attitudes of American workers and retirees about issues surrounding retirement, however, this year, the survey also included an oversample of Black Americans to allow for a closer analysis of the challenges that they face in saving and preparing for retirement. The survey interviewed 2,047 Americans (1,042 workers and 1,005 retirees), plus the oversample of 720 non-Hispanic Black or African American respondents (520 Black workers and 481 Black retirees).
“We found that Black Americans reported disproportionately lower financial resources, and that impacts how they feel about retirement and financial security. Furthermore, Black retirees were more likely to say that their retirement lifestyle was worse than expected and that they had to retire earlier than planned because of a health problem or disability,” explained Craig Copeland, director, Wealth Benefits Research, EBRI.
While confidence in having enough money to live comfortably in retirement is lower for all Americans at lower incomes, Black Americans with incomes of less than $35,000 and $35,000-$74,999 were more likely to be confident than non-Black Americans. Black Americans with higher incomes were less likely to have personally saved for retirement. For those with incomes of $75,000 or more, 77% of Black Americans report having saved for retirement compared with 87% of non-Black Americans.
“Overall, Black Americans view retirement similar to others with comparable financial means. For example, middle- and upper-income Black Americans were just as likely to feel knowledgeable about managing their day-to-day finances and saving and investing for the future. However, Black Americans, on average, have lower financial means. They were more likely to report higher incidences of lower incomes and assets as well as higher likelihoods of problematic debt,” said Lisa Greenwald, CEO, Greenwald Research.
This survey “has consistently shown that Americans with lower incomes report feeling less confident about their retirement prospects. However, having debt is also one of the largest indicators of individuals not being able to save, build wealth, and live comfortably in retirement. Despite these challenges, Black Americans are still optimistic for their futures, as shown by their high levels of retirement confidence across the income spectrum.”
Seeking help from financial advisors
Black Americans reported disproportionately lower financial resources, and how they feel about retirement and financial security is clearly impacted by having less resources. In particular, Black retirees are struggling with higher likelihoods of their retirement lifestyle being worse than expected and having to retire earlier than planned because of a health problem or disability.
“Still, there are some modifications in the financial system that could help improve their prospects, such as more help balancing competing financial priorities, such as debt reduction, supporting family and building long-term savings. In addition, Black Americans are more likely to want help from financial advisors with figuring out their life insurance needs and creating a will or estate plan,” while non-Black Americans were more likely to be looking for help in figuring out if they have saved enough for retirement.
Related: Financial wellness coaching: How tailored solutions can help reduce employee debt
Employers can also help with these financial concerns with more education and financial wellbeing programs, as Black Americans are more likely to look to their employers for help in their retirement planning.
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