Across succeeding generations, nearly every worker has been urged to ‘save’ for retirement. However, yesteryear’s gold watch and pensions that came with health care benefits or even added stock options are today nearly extinct.
Instead, the emergence of varying 401(K) retirement plans has lifted many employer legacy costs by shifting the brunt of that financial responsibility to workers. Even worse, many low-wage workers have no employer-sponsored retirement plan.
For Black America, this shifting financial burden brings a new level of financial stress, worsened by the cumulative effects of life-long wealth inequality.
The Reality of Racial Economic Inequality for Black Retirees, a recent policy brief from the Joint Center for Political and Economic Studies, analyzes the harsh cyclical realities affecting multiple generations.
“[B]lack Americans are more likely to experience retirement as financially fragile, with less choice and less protection against illness, disability, or rising costs,” states the brief. “The cumulative effects of these inequalities have developed into a multi-generational cycle of low wealth for African Americans and ongoing racial wealth/ economic inequality.”
Black households have only about 61 percent of the median household income of whites. In 2025, median weekly earnings for full-time Black workers were $986, compared with $1,231 for white workers. These income gaps leave less room to save, make it harder to absorb financial shocks, and reduce the likelihood that Black workers can build meaningful retirement balances, according to the Joint Center.
Citing a 2024 Federal Reserve report, the Joint Center notes that among workers, only 26 percent of Blacks said their retirement savings were on track, compared with 41 percent of whites. Additionally, 68 percent of white working adults had a tax-preferred retirement account, with 52 percent of Black workers having the same.
Further, Black workers ages 51 to 64 are the least likely among all racial and ethnic groups to hold retirement accounts. When they do, their median balance is well below that of similarly aged white adults at every income level.
Social Security benefits are a clear depiction of the life-long racial income disparities Blacks and other people of color experience. Benefit levels are determined by a formula that factors in the number of years worked and each worker’s 35 highest paying years of income to determine monthly payments.
The median monthly Social Security benefit in 2024 for Black men age 60 and older was $1,685, compared with $2,179 for white men. For Black women, the projected median monthly benefit was $1,557, compared with $1,692 for white women. Annualized, those amounts equal $20,220 for Black men and $18,684 for Black women, compared with $26,148 for white men and $20,304 for white women.
Most importantly, by 2050 the Social Security Administration projects that Black wealth ($78,579) will be four times lower than that of whites ($320,337).
In the meantime, families still need a place to live.
Owning a home is not just the single largest bill for most families; it also remains the cornerstone to building intergenerational wealth. Homeownership is also still out of reach for most Black families. Last year only 44.7 percent of Blacks were homeowners, compared to 74.6 percent for white households, states the Joint Center.
That means more than half of Black America remain renters, spending $1,667 or more each month for a median-priced apartment in one of the 50 largest metro markets in the country, according to Realtor.com. These prices offer no assurance on when or how much the next rental increase will be.
Paying nearly $1,700 every month for rent may seem high; but it is lower than the June 2026 median monthly mortgage payment of $2,633 for a home purchased for $398,300 with an interest rate of 6.5 percent for 30 years.
Yet another key factor in racial wealth disparities is the disproportionate debt incurred by Black families to pay for college. Although most people never anticipated owing student loans in their mature years, many do. Consumers aged 60 and older also had on average $40,969 in student loan debt, according to theEducation Data Initiative.
These and other financial factors contributing to tarnished retirement years is aptly summarized by the Joint Center:
“Retirement is not just about what happens at the end of a person’s working life. It is shaped by whether households had the opportunity to build wealth, withstand shocks, and pass resources across generations long before retirement begins.”
Charlene Crowell is a senior fellow with the Center for Responsible Lending. She can be reached at Charlene.crowell@
