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Social
Security primary source of retirement income
for African-Americans…New report finds
without Social Security half of older
African-Americans would live In poverty
CHICAGO, Nov. 2 /PRNewswire-USNewswire/ --
While Social Security is a key part of
retirement for most people, without the
program the overwhelming majority of African
Americans age 65 and older would live in
poverty. According to a new report by AARP's
Public Policy Institute, nearly 80 percent
of older African Americans rely on Social
Security for 50 percent or more of their
income.
AARP is working in Illinois with employers,
business and community leaders to increase
financial security within the African
American community. Some of the efforts
focus on implementing measures, such as the
auto-enrollment of employees in 401k plans,
to better prepare employees for retirement.
"Nearly 75 million working Americans do not
have a way to save or plan for their
retirement," says Evelyn Gooden, AARP
Illinois State President. "In Illinois AARP
is working hand in hand with employers and
community leaders to provide stronger
financial security for African Americans of
all ages -- this study clearly shows we have
a lot of work to do."
While the financial security of persons over
65 has generally improved over the last
30-plus years, this improvement does not
apply to all minority groups, including
African Americans. In 2005, African
Americans accounted for 8.4 percent of the
over-65 population, but 19.3 percent of
those over 65 living in poverty. For nearly
half (44.3 percent) of older African
Americans, Social Security is their sole
source of income.
"Further steps must be taken to educate
African Americans about their
options for saving and steps must be taken
in the workplace so they have
all the resources available to do so," added
Gooden. "Not taking advantage
of employer sponsored programs like a 401k,
especially since many companies
match employee contributions, is like
leaving money on the table."
While nearly half (49%) of American workers
do not participate in an employment-based
retirement plan, 30% do not take full
advantage of their 401k. With traditional
defined benefit pensions on the decline and
Americans saving less and less for their
retirement, new steps are key to
establishing financial security.
AARP also supports federal auto- IRA
legislation to provide employees with
direct-deposit payroll deductions to an IRA
at a financial institution. The employer
would not have to contribute to such an
account, nor would they hold any liability
for investment decisions.
In Illinois and across the nation AARP
members are engaged in Divided We Fail --
http://www.dividewefail.org -- a
grassroots movement to raise the issues of
financial security and health care to the
political forefront and press candidates and
lawmakers for answers and solutions.
The full report, African Americans Age 65
and Older: Their Sources of Retirement
Income can be found at:
http://www.aarp.org/research/assistance/lowincome/fs137_aaincome.html.
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