By Julia Hewitt and George (Sandy) MacKenzie

Essay Overview

This essay explores the racial inequalities in retirement preparedness. Households preparing for retirement could find themselves in one of three undesirable situations: being able to maintain the standard of living in retirement achieved during working life but experiencing lifetime income below some acceptable social norm, achieving an acceptable working life income but likely to fall below that standard in retirement, and failing to achieve an acceptable income level in either period. This essay presents data implying that a large share of households of color will fall in one of these three groups. It addresses the conceptual issues that arise in evaluating a satisfactory level of retirement income and proposes possible reforms that address inadequacies.

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About the Authors

Julia D. Hewitt is a Research Assistant with the Federal Reserve.

George A. (Sandy) Mackenzie is a consulting economist and was the inaugural editor of the Journal of Retirement.

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