Retirement Assets and the Wealth Gaps for Black and Hispanic Households

Abstract

We compare retirement wealth for Black, Hispanic, and White families age 40-59 in the Survey of Consumer Finances (SCF) and the Distributional Financial Accounts. We augment defined contribution (DC) pension wealth in the survey with household-level measures of defined benefit (DB) pension wealth and social security wealth. We find that accounting for both DB and DC pensions reduces White/non-White retirement wealth ratios when comparing averages across groups but increases White/non-White ratios when comparing families in the middle of each race-specific distribution. By contrast, social security wealth lowers White/non-White wealth ratios in both ways of comparing across groups.

Keywords: Wealth, Inequality, Social Security, Pensions, Saving

JEL Classification: D14; E21; G51; H55; J15