Black Workers More Optimistic About Jobs, Less So About Retirement

Black workers with incomes above $75,000 were especially optimistic — 79 percent expected their financial situation to improve in the year ahead. Younger Black workers were almost as optimistic, with 76 percent of those ages 25–49 hopeful about their financial future.

Nevertheless, fewer Black workers say they are currently satisfied with their jobs (51 percent) than Hispanic workers (57 percent) and white workers (66 percent). And fewer Black workers express satisfaction with their overall financial situation. Just 51 percent of Black workers say they are at least somewhat satisfied with their financial positions, compared with 57 percent of Hispanic workers and 66 percent of white workers.

Retirement outlook less certain

Despite their optimism for the near future, fewer than half (46 percent) of Black workers say they are very likely to achieve financial security and avoid being a burden in retirement. Those who are 50-plus are the most pessimistic, with just 38 percent thinking that they will have a financially secure retirement, and 44 percent confident that they won't be a burden on others.

Black workers say that lack of money is their largest barrier to a secure retirement (54 percent), followed by debt burdens (40 percent) and the cost of health care (14 percent). During the pandemic, 28 percent of Black workers say they have taken money from retirement savings early or stopped contributing to retirement plans.

Managing debt and reducing expenses are the top issues that Black workers want to work on this year. Fifty percent want to reduce their debt, and 47 percent plan to work on budgeting. Ten percent feel they need to tackle issues related to caring for an adult loved one. And 16 percent of Black workers say they need advice to reach their goals.

Black workers overwhelmingly support the creation of workplace programs to help them build emergency savings. These programs, like 401(k) and other savings plans, would automatically direct money from their paychecks to an emergency savings account. A similar number approve of tax incentives to help workers save for emergencies.

"What we saw is that debt remains a barrier to saving for retirement, and there is a wide gap between what people say they want their financial futures to look like and their expectations of achieving it,” Koenig says. “A good job with steady employment is priority number one, but having a manageable amount of debt and savings for an emergency are keys to financial security today and in the long run."

Just 39 percent of Black workers have a savings account, compared with 60 percent of white workers. And only 43 percent have an employer-provided retirement account, compared with 62 percent of white workers.

The AARP study looked at adults age 25-plus to assess their financial experience from February 2020 through February 2021 — the height of the global COVID-19 pandemic. A total of 5,430 Black, Hispanic and white workers completed the survey, which was taken Jan. 13, 2021 through Feb. 8, 2021. Of those who responded, 1,911 Black workers completed the survey.