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RESEARCH AND POLICY BRIEF SEPTEMBER 2011
INSTITUTE ON ASSETS & SOCIAL POLICY
LIVING LONGER ON LESS SERIES
THE CRISIS OF ECONOMIC INSECURITY FOR AFRICAN-AMERICAN AND LATINO SENIORS Tatjana Meschede Laura Sullivan Thomas Shapiro
E
ven before the full impact of the Great Recession hit, seniors were seeing their retirement security steadily and rapidly destroyed.* The elimination of secure pensions for most Americans combined with rising costs of basic expenses has resulted in a dramatic rise in senior economic insecurity. While the recession slammed most seniors, people of color were especially hard hit; with very limited assets and resources to cushion the blow, many are falling deeper and deeper into the well of financial insecurity. More than half (52 percent) of African-American and 56 percent of Latino seniors are economically insecure. These seniors do not just have to watch their pennies; they are truly struggling everyday, forgoing basic expenditures, such as medical appointments and household maintenance, just to make ends meet. FIGURE 1. ECONOMIC INSECURIT Y AMONG WHITE, AFRICAN-AMERICAN AND L ATINO SENIORS 2008
50% 40%
20% 10% 0%
32% WHITE SENIORS
30%
AFRICAN-AMERICAN SENIORS
52%
PERCENT INSECURE
56%
LATINO SENIORS
60%
KEY FINDINGS The Senior Financial Stability Index (SFSI) projects essential needs over the life course and assesses available resources to meet those needs. Analysis using the SFSI reveals dramatic increases in economic insecurity in recent years: • Over half (52 percent) of African-American and 56 percent of Latino seniors are economically insecure. • Just four percent of Latino and eight percent of African-American seniors are economically secure, meaning they have adequate resources to maintain a secure standard of living for the remainder of their lives. • Ninety percent of Latino and 83 percent African-American senior households have insufficient retirement assets to last throughout their expected life spans. • Sixty-two percent of African-American and Latino households spend 30 percent or more of their incomes on housing expenses. THE SFSI WAS DEVELOPED AT THE INSTITUTE ON ASSETS AND SOCIAL POLICY IN 2008. THE FIRST PUBLISHED FINDINGS USING THE INDEX WERE PRESENTED IN THE 2009 REPORT, “LIVING LONGER ON LESS: THE NEW ECONOMIC (IN)SECURITY OF SENIORS,” BY TATJANA MESCHEDE, THOMAS M.
Today’s seniors of color spent much of their working lives in an era SHAPIRO, AND JENNIFER WHEARY. where redlining, segregation and labor market discrimination severely hampered their ability to accumulate asset wealth. While great strides have been made in the areas of employment and housing discrimination in recent decades, the cumulative effect of such discrimination means that most seniors of color are facing retirement with few resources to meet even basic, everyday expenses. How do they get by? Many rely on adult children. However these adult children are faced with the expenses of raising their own families, and have very little, if anything, left over with which to build their own retirement nest-eggs. In this way, the economic challenges of today’s seniors fuel an ongoing cycle and have long-term ripple effects that impact the security of future generations. * See, From Bad to Worse: Senior Economic Insecurity on the Rise, July 2011 for recent analysis of the rising trend of economic insecurity among all American senior populations. Available at: iasp.brandeis.edu or www.demos.org