The Asset Index: Assessing the Progress of States in Promoting Economic Security and Opportunity
The Crisis of Economic Insecurity for African-American and Latino Seniors
Economic (In)Security: The Experience of African-American and Latino Middle Classes
From Middle to Shaky Ground: The Economic Decline of America's Middle Class
Living Longer on Less: The New Economic (In)Security of Seniors
Living Longer on Less in Massachusetts: The New Economic (In)Security of Seniors
Tips, Tools & Tactics: The Best Resources for Women's Financial Planning
Nearly half (47%) of all senior single women in America do not have adequate retirement resources to meet even their most basic needs for the remainder of their lives, and this number is rising. This distressing statistic is among the findings from a report released today by IASP and Demos, the latest in the Living Longer on Less series. This report finds that rising housing expenses, fixed and inadequate household budgets, and very low levels of retirement assets are contributing to rapidly rising economic insecurity among senior single women. Single women are especially vulnerable to economic insecurity in retirement due to the limited lifetime asset building capacity many women face, driven by the persistent wage gap, high levels of part-time work and ineligibility for retirement benefits, as well as extended periods out of the labor force due to family care-giving duties.
New research from IASP and Demos reveals crisis levels of economic insecurity among current African-American and Latino seniors. The latest report in the “Living Longer on Less” series, “The Crisis of Economic Insecurity for African-American and Latino Seniors,” found that 52% of African-American and 56% of Latino Seniors do not have adequate retirement resources to meet their basic needs throughout their expected life-spans. Driven by extremely low levels of asset wealth and high housing costs, most seniors of color are struggling financially during their elder years. Forced to rely on adult children and public programs just to get by, these distressing statistics both exacerbate and are a by-product of the growing racial wealth gap.
IASP's and Demos' newest report in the "Living Longer on Less" series. "From Bad to Worse: Senior Economic Insecurity on the Rise " shows a troublesome trend of increased economic insecurity among senior households in just four years (2004-2008). Economic insecurity among seniors increased by one-third, from 27% to 36%. These statistics are especially of concern because today's seniors are better prepared for retirement than subsequent generations will be, mostly due to the decline in employer based retirement savings and rising debt experienced by the younger households .
IASP's latest report examines the integration of services at Volunteer Income Tax Assistance (VITA) sites beyond promotion of the Earned Income Tax Credit (EITC) by using the provision of free tax preparation as a vehicle to increase access to other financial and support services. IASP researched current practices nationally and surveyed and interviewed participating tax filers and program directors to identify effective strategies outlined in this report. Through the Asset Formation Initiative, IASP has teamed up with the Massachusetts Association for Community Action (MASSCAP) to increase asset formation opportunities for low-income families across the state.
The report documents operational practices that contributed to the success of the pilot Super VITA sites and those factors that interfered with intended program development and service delivery. The report makes recommendations for effective integration of services at Super VITA sites and for the further integration of VITA tax preparation service with other asset formation programs.
A key finding reveals that those who receive additional services at the VITA sites present a different demographic profile than the recipients of the EITC who were previously surveyed for this initiative. The efforts to offer additional services linked to tax preparation provide an opportunity to reach people not as likely to be already connected to the agency and not among the traditional target population for VITA outreach that is associated with promotion of the EITC. The Super VITA site recipients were more likely to be male, over age 45, and not to have dependent children present in the home.
Assessing the wealth holdings of the same families for 23 years (1984-2007) shows that the wealth gap between whites and African Americans increased more than 4 times, from $20,000 in 1984 to $95,000 in 2003. This gap persisted for African Americans and white families in the same income range. For example, middle-income white households had greater gains in financial assets than high-income African Americans; by 2007, they had accumulated $74,000, whereas the average high-income African American family owned only $18,000. At least 25% of all African American families had no assets to turn to in times of economic hardship.
These data indicate that the general trend in lending in which consumers of color pay more for accessing credit, increases their debt and blocks opportunities to move forward, putting them at a severe economic disadvantage. Public policies have and continue to play a major role in creating and sustaining the racial wealth gap, and the research brief suggests they must now play a role in closing it.
This IASP and Demos report reveals that African Americans and Latinos are particularly at risk of poverty and financial stability in their later years. This study finds that 91% of both African American and Latino seniors face financial vulnerability. Lack of assets and housing expenses are the leading causes for the high financial insecurity among seniors of color. More than three fourths of senior households of color do not have sufficient financial resources to meet projected lifetime expenses, and high housing expenses put six in ten African American and Latino seniors' budgets at risk.
This report identifies policy action for comprehensive reforms that support working-age adults and help families prepare for retirement. To promote long-term economic security, the report's recommendations aim to enhance existing programs and resources for seniors, such as strengthening of social security and pensions provisions, and flexible employment during retirement. Recommendations also address the need of asset development for all ages.
This new improved measure of asset poverty extends past approaches in three areas: income in the absence of employment income such as unemployment benefits; an alternative poverty measure that reflects a more realistic coverage of essential needs; and capturing asset opportunities, investments and resources that can be leveraged for mobility, security, and stability. Key findings point to lack of asset security among 42 percent and lack of asset opportunity for more than half of all U.S. households of working age. Working age African American and Latino households have the lowest levels of asset security and opportunity for mobility with two-thirds among them not asset secure, and only one of five households of color with financial assets to invest in opportunities for mobility. This improved measure of assets is critical for practice and research as we continue to grow our knowledge on the role of assets in family economic security and mobility.
Full Report Press ReleaseBased on the Demos/IASP Middle Class Security Index, this new report shows that households of color experienced much larger declines in middle class economic security than the overall middle class. While nationally middle class economic security declined by 5 percentage points from 28% in 2000 to 24% in 2006, it declined by 10 percentage points (from 26% to 16%) for African Americans, and by 11 percentage points (from 23% to 12%) for Latino middle class households. These declines are mostly driven by dramatic losses in financial assets for middle class households of color.
New report findings reveal that Massachusetts senior households face widespread economic vulnerabilities -- with 68% economically insecure in the long term. Economic risk is especially pronounced for single senior households -- with 82% facing financial insecurity. These findings are a result of analysis utilizing the new Massachusetts Senior Financial Stability Index (MSFSI) developed by IASP. This new report paints a daunting picture for the state's aging population. Trends will likely get worse unless policymakers adopt new policies to reverse existing conditions.
In partnership with MASSCAP, IASP conducted research to guide implementation of asset formation programs at Community Action Agencies. IASP's two-year study of EITC recipients found that most used the tax refund to cover everyday expenses, but it was also frequently used to pay off debt which looms large fro many. While about two-thirds of recipients intended to save some of their tax refund, only about half that number reported actually being able to do so due to unanticipated expenses or the pressure of debt. For those who did save, the most frequent goals were to buy or repair a vehicle and for education for their children or themselves.
Surveys of financial education program participants six to eight months after completing the program found positive changes in confidence regarding several core areas of financial literacy. All program participants also reported reduction in personal debt and that they had begun to save for an asset, even though about half had initially reported that they do not save regularly.
The findings of program participant surveys along with interviews and focus groups and interviews of program directors contributed to recommendations for program development and integration of asset formation into services at CAAs and other community-based organizations.
Selected by the National Academy of Social Insurance (NASI) as one of 12 scholars to compose a policy paper on improving Social Security for vulnerable groups, IASP discusses three spheres to enhance social security benefits for low-income workers. These include enhancing the existing special minimum benefit, considering program interactions to ensure economic security for beneficiaries of the new minimum, and updating asset limits in the Supplemental Social Security (SSI) program to reflect, at a minimum, inflation since program implementation.
Full Paper Press Release Full NASI Report
The new report by IASP and Demos finds 78% of all senior households are financially vulnerable when it comes to their ability to meet essential expenses and cover projected costs over their lifetimes. These sobering stats serve as an economic distress signal for older Americans and a wake-up call for younger and middle-aged Americans.
IASP and Dēmos released its third report in a series based on the Middle Class Security Index. The new report finds that as the economy continues to reel, 4 million American households are either borderline or at high risk of falling out of the middle class altogether. "From Middle to Shaky Ground" uses government data and measures the financial security of the middle class by rating household stability across five core economic factors: assets, educational achievement, housing costs, budget and healthcare. Based on how a family ranked in each of these factors, they were defined as financially "secure", "borderline" or "at risk".
Full Document Fact Sheet Document
IASP and Dēmos released a second report in the By A Thread report series on the state of the African-American and Latino middle class and its ability to achieve the American Dream. This landmark study is based on the new "Middle Class Security Index." Major findings demonstrate that three out of four African-American and four out of five Latino middle class families are either borderline or at high risk of falling out of the middle class altogether.
By A Thread: The New Experience of America's Middle Class, November 2007
When we think of the middle class, we think of having financial security, raising a family with a reasonable standard of living, building a solid future for the next generation, receiving quality healthcare, and retiring in comfort. This type of security does not just happen. Rather, it is supported by a range of factors.
By a Thread recommends a set of policies that will help open access to, and strengthen, America's middle class. Legislative proposals in this report cover a range of important issues affecting American households, including asset building and debt reduction, making higher education more accessible and affordable, and addressing the healthcare crisis.
IASP embarked on a partnership in 2006 with the War on Poverty Florida Inc. (WPI) to apply the asset development model in ten Florida minority communities. A comprehensive assessment of qualitative and quantitative data and utilization of GIS mapping software has culminated in the recently released Northwest Jacksonville Community Asset Analysis. This analysis serves as a research-based catalyst within the War on Poverty's vision of progress for minority communities.
The Asset Opportunity Ladder charts the many policies that can impact the ability to build assets over a lifetime. At each life stage innovative state and federal policies can aid in creating an asset foundation, strengthening human capacities, and building financial wealth. The gains extend not only to the social and economic well-being of individuals and their families, but also benefit the larger community and the economy.
This publication is targeted to young adults, and aims to spur thinking about the importance of asset building in their personal lives and about how larger policy decisions impact the choices they make. Young adults can use it as a reference on their own, or with help from an instructor, counselor, or mentor. The publication is a joint project with the Public and Community Affairs Department of the Federal Reserve Bank of Boston.
This report presents a state-by-state comparative study of key assets that all Americans need to succeed in today's economy. The 39 indicators of job-based and related income assets, human capital, and financial assets speak to the economic security people have and the opportunity they enjoy. Together they paint a multi-faceted portrait of the progress individuals have made in building assets in different regions of the country and in particular states. The study finds dramatic differences among states. Three states rank among the top 10 for over half of the indicators and not at all among the bottom ten. Conversely, two states rank among the bottom 10 for over half of the indicators and never among the top 10.
Full Document
State Map with Links to Individual State Data
Tips, Tools & Tactics: The Best Resources for Women's Financial Planning
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The National Center on Women and Aging for the POWERCenter.
There are thousands and thousands of resources available on financial planning. Some are terrible, many are adequate, and a few are of the highest quality. You don't have time to pore over them looking for the gems - the National Center on Women & Aging has done that for you. The directory itself is a resource that you can really use -- it is readable, understandable, accurate, and timely.
If you are ready to act and just need some good tools, click on http://iasp.brandeis.edu/womenandaging/finances/index.html.
© 2012, Institute on Assets and Social Policy, The Heller School for Social Policy and Management, Brandeis University. All rights are reserved.
