The Economic Crisis Facing Seniors of Color

According to an August 2011 study by the Greenlining Institute in Berkeley, California, while the recession has affected all Americans, its effects have been more devastating for African Americans, Asian Americans, and Latinos. Among the key findings:

1. Even before the 2008 recession, independent measures found that 91% of African American and Latino seniors are financially vulnerable.

2. Current federal standards for measuring poverty are flawed and fail to consider factors that disproportionately affect elders, such as the high costs of health care, housing, and transportation for seniors on fixed incomes.

3. The three-legged stool of retirement security (pension, savings, and Social Security) is collapsing. For a variety of reasons, seniors of color have had less access to all of these sources of support, including less access to employee retirement plans.

4. Seniors of color have become increasingly reliant on Social Security as they have tapped out their modest savings.

5. Employer-based pensions have dwindled in the past 30 years to just one-in-three African Americans and slightly more than one in five Latino workers.

Among the recommendations:

1. Protect the social safety-net program, such as Supplemental Security Income, food stamps, and adult day health care centers from budget cuts, “which may bring heavy burdens for seniors, and ultimately higher costs for state and federal governments.”

2. Lift asset limits that force poor seniors to “spend down their savings before they can participate in Medicaid, cash assistance, or other programs.

3. Better protect senior’s limited assets by, among other things, curbing the abusive practices of businesses such as payday lenders, which tend to cluster in communities of color.

4. Increase access to matched and tax-deferred savings and pension plans for people of color and low-income groups, including universal retirement savings accounts that will help employees save for retirement regardless of the pension offerings of their employers.