While the combination of Social Security, employment-based and individual retirement arrangements has demonstrated successes of the current retirement system, the global pandemic and pervasive racial inequities in America has brought into sharp focus challenges many continue to face while trying to achieve financial security.
Certain segments of the population have greater barriers to savings. This includes part-time workers, Black, brown and indigenous communities, millennials, and adult caregivers, to name a few. In particular, Federal Reserve data shows that Black and Hispanic savers have savings rates that lag significantly behind their white counterparts. These deficiencies are magnified in women. This financial insecurity, which includes a lack of retirement savings, are deeply rooted in other institutional inequities, including earnings, savings, housing and overall financial wealth.
Millennials also tend to be less prepared for retirement than earlier generations at the same stage in life with 45 percent having no dedicated retirement savings. Further exacerbating their savings challenges, almost 41 percent are burdened with student loan debt and may delay saving for retirement.
Adult caregivers are also in a difficult situation. Many financially assist their children, while an estimated 9.7 million adult children over the age of 50 care for their parents as well. Women act nearly twice as often as men as caregivers for their adult parents, which can have a significant impact on their retirement savings.
Congress has taken note of these disparities, and most recently, the House Education and Labor Subcommittee on Health, Education, Labor and Pensions held a hearing to better understand challenges and inequities Americans are facing and potential solutions.
ACLI submitted a statement for the record, reiterating the industry’s commitment that everyone, no matter their age, job, income, gender or race, deserves the chance to build financial certainty that will serve them in the good times and protect them in the hard times. Additionally, we highlighted ways in which lawmakers and stakeholders could work together in order to address barriers to financial security. To read more about these bold ideas, please click HERE.
Kathleen Coulombe serves as the Senior Vice President, Federal Relations, for the American Council of Life Insurers (ACLI). In this capacity, she is actively involved in a multitude of public policy issues on Capitol Hill that impact the life insurance industry.
