Brief #13 in the Older Americans' Economic Security series.
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Abstract
Although recent evidence suggests baby boomers intend
to work longer than previous generations, some demographic
groups appear less likely to delay retirement. On
average, African Americans expect to work less at older
ages than other racial groups, even after considering differences
in education, health, wealth, and other factors.
Possible explanations include labor market discrimination,
family care responsibilities, and lower levels of job
satisfaction. African American boomers risk jeopardizing
their retirement security if they leave the labor force at
relatively young ages.
Introduction
Although recent evidence suggests baby boomers intend
to work longer than previous generations, some demographic
groups appear less likely to delay retirement. On
average, African Americans expect to work less at older
ages than other racial groups, even after considering differences
in education, health, wealth, and other factors.
Possible explanations include labor market discrimination,
family care responsibilities, and lower levels of job
satisfaction. African American boomers risk jeopardizing
their retirement security if they leave the labor force at
relatively young ages.
Working Longer Would Help Secure
Boomers' Retirements
Retirement prospects for the baby boomers—the large
cohort born between 1946 and 1964—are uncertain.
Studies suggest that, while the boomers are likely to
have more wealth and higher incomes in retirement
than earlier generations, they may not retire with the
same prosperity they enjoyed as workers (Butrica and
Uccello 2004; Congressional Budget Office 2003). And
high-risk groups, including African Americans, will
remain vulnerable. For instance, 22 percent of African
American boomers are projected to have incomes below
twice the poverty level at age 67, compared to 12 percent
of white boomers (Butrica and Uccello 2004).
Working longer would brighten the boomers' retirement
outlook. Those who delay retirement avoid early
retirement cuts to their Social Security and defined-benefit
pension benefits, accumulate more savings, and reduce
the period when savings must be tapped. By working
until age 67 instead of retiring at age 62, for example, a
typical worker could gain about $10,000 in annual income
at age 75, significantly reducing the likelihood of falling
into poverty at older ages (Butrica et al. 2005).
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