A new survey from the SOA Research Institute, the research arm of the Society of Actuaries, breaks down the uneven financial impact of the crisis on race/ethnic groups. It included feedback from 520 African Americans. People were asked several questions, including what their retirement concerns are, how they supported their families financially, and how their ability to pay for housing was impacted.
The online survey polled 2,017 Americans. Its efforts included pinpointing the financial knowledge and strategies of respondents across generations. The report included an oversample of Black/African American, Asian American, and Hispanic/Latino respondents.
Dale Hall, managing director of research at the Society of Actuaries, told BLACK ENTERPRISE via email the most startling findings come from two stats. First, there were 37% of Black American respondents who experienced a negative financial impact. One-third of experienced job loss or a pay decrease because of the pandemic, showing the immediate impact it had on these individuals.
Second, he added, half of the Black American respondents indicated concerns about the pandemic’s impact on their retirement savings. Nearly one in three are changing or considering changing the timing of when they’ll retire.
“It is encouraging to see that retirement planning and preparedness are still top of mind in the midst of everything; however, the pandemic will likely have a longer-lasting impact on these individuals.”
So, how is that hurting or hindering Black Americans’ plans to retire?
“These research findings highlight how Black Americans’ retirement plans are changing for many because of the negative impact on their current financial situation,” Hall says. “The earlier you start planning for retirement, the better. The pandemic’s impact may cause individuals to delay planning and that could make a drastic difference in their retirement security down the road.”
Hall offered suggestions actions both young and old Black Americans should do now to grow their nest egg for retirement.
He says the most important effort to consider is to learn about the options for retirement planning and how to address retirement risks. He added since the research found that only 2 in 10 Black/African American respondents worked with a financial professional in 2020—lower than the other ethnic groups—you may consider consulting with a financial professional to help you understand how to prepare for a secure retirement.
Hall says though actuaries aren’t financial planners, the Society of Actuaries Research Institute has compiled a set of reports that take consumers through retirement decisions they encounter, along with a guide with tools.
“This guide can help you understand how to use different retirement planning tools to estimate how much money you should be saving to retire comfortably with a reasonable assurance of meeting your future spending needs.”