Financial insecurity continues to plague Black communities, according to new Social Security data, even as they enter retirement. While one in three Americans is underprepared for retirement, 75 percent of Blacks have no retirement savings at all.
However, even as efforts are underway by financial and insurance institutions, including Prudential, to raise awareness and steer Blacks towards retirement savings, increasing numbers are finding it difficult.
Such is the case for Orlando Armstrong, whose best efforts to maintain a 401(k) savings plan with his employer over the past eight years was thwarted by “necessary withdrawals.” Armstrong, a Georgetown University graduate, said he used the account as more of an emergency fund than a true retirement fund. “My thinking initially was that I would allow the money to build and generate my retirement income; however, when my grandfather passed away without life insurance or a burial policy, I borrowed from my 401(k) to pay the funeral expenses,” Armstrong said. “The problem is that I never paid the money back into the plan.”
Armstrong’s multigenerational financial frailty speaks to a systemic lack of financial stability within segments of the Black community. William Julius Wilson, a Harvard University government professor and author of “The Truly Disadvantaged”, spoke of these issues often and noted factors that keep Blacks from financial stability are often multilayered and included the nation’s economic growth, personal economic forces, and rising inequality.
“ you had strong unions that ensured that workers got adequate pay increases,” Wilson said in a 2011 NPR interview. “You had basic supports for workers, including non-wage benefits. You had steady increases in the minimum wage. You had a thoroughly progressive tax structure.
“All of these things contributed to the broadly equal pattern of family income progress.”
But, what happens when employee earnings don’t allow for contributions into a 401(k)?
Destiny Hawkins, a poet and waitress at a local restaurant, said even with a 50-hour-a-week shift, her tips
provide for a shared apartment (with three roommates), enough money to buy food, and fare for her SmartTrip card. Two years out of college, Hawkins said she has put the idea of paying into retirement out of her head for the moment.
“I am just geeked that I no longer have to call my parents to help me pay bills,” Hawkins said. “I pray that by the time I am 30 or 35, I am able to manage that type of contribution, but honestly, I doubt that I will. We are a new generation of young people who see that the system may fail us even with a retirement plan . . . just look at the number of people losing their homes to developers and taxes.”