Social Security saves 30 percent of retired Blacks from poverty

Although many Americans are living longer, a new public policy analysis reveals that a disproportionate number of older people are also living in poverty – particularly if they are a person of color.

According to the AARP Public Policy Institute, Social Security keeps about 30 percent of African-Americans and Hispanics retirees from poverty. Yet another 20 percent of these two groups at ages 65 or older, live in poverty at a rate that is double that of Whites.

The reasons for these disparities are tied to multiple factors. Years of working for lower wages do not allow for aggressive savings or investment portfolios.

Additionally, many people of color have held jobs that did not provide for pensions or retirement accounts. For other workers whose employers provided some kind of retirement plan, often the benefits are smaller.

Asians best off
Among all people of color, AARP found that higher-income Asian-Americans were the most likely to receive diversified incomes in retirement years that included interest, dividends and rental income from assets.

For Black and Latino retirees, more than a quarter eventually rely on Social Security for 90 percent of their family income, says AARP. According to the report, “The median annual Social Security family income of older minorities is roughly 26 percent lower than that of older whites.”

The worst disparities in Social Security benefits were found in comparing women by race and marital status. Never-married African-American women usually receive benefits at much lower rates than married women of color. By contrast, older White women regardless of marital status received benefits at much similar rates to White men.

When to retire
Fortunately, the Social Security Administration provides options to increase the amount of monthly benefits by determining the best time to retire.

For example, most consumers can receive Social Security benefits as early as age 62. The trade-off is that the monthly payments will be lower than those choosing to wait for full benefits.

Full retirement age changes started taking effect in 2000, and will change gradually from age 65 to age 66 or 67, depending on date of birth. For those born between 1945 and 1954, full retirement age is 66.

Regardless of when people choose to retire, Social Security recipients are eligible for cost-of-living adjustments (COLAs). After no COLAs were offered in 2010 or 2011, this year retirees will receive a 3.6 percent adjustment. Last week, the Labor Department indicated an estimated 2013 increase will be in the range of 1.5-1.7 percent.

Anyone planning to retire is advised to contact Social Security three months before the date desired for benefits to begin.

According to AARP, “Social Security is and will continue to be the main source of income for low- and moderate-wage retirees; but improvements in other programs would alleviate poverty and income insecurity among older Americans.”

Charlene Crowell is a communications manager with the Center for Responsible Lending. She can be reached at



Please enter your comment!
Please enter your name here