For Black women, health plays an outsize role in retirement planning

“I’m getting older now, so it’s time for me to relax and enjoy my family.”

Webster now lives a few miles from her daughter, Rae, 46, and granddaughter, maintaining an active and social lifestyle, which she says is “healthier for me because living in Los Angeles and not having family there…gets a little lonely.”

“You know, it could be a little depressing sometimes,” she says.

Webster, a Black woman, is fortunate to have ended her career in good health and with a pension. Decades in a high-paying job and access to quality health care afforded her a comfortable retirement plan complete with the flexibility to relocate near family for mutual support. But for many Black women, the accumulation of life experiences with structural disadvantage, including inequity in wages and employment, means they face unique challenges that limit their ability to retire in good health—or at all.  

Financial disparities burden Black women 

A 2020 Brookings Institution report found that gender disparities in lifetime earnings and savings are the primary drivers of women’s dismal retirement prospects. For Black women, the “layers” of racial and gender inequality, including the racial wage gap, which worsened during the COVID-19 pandemic for both Black women and men, contribute to Black women’s lack of retirement prospects, says Geoffrey Sanzenbacher, research fellow at the Center for Retirement Research at Boston College and associate professor of the practice of economics at Boston College. 

Black women earn 63 cents for every dollar non-Hispanic white men earn, resulting in a monthly loss of $2,000, an annual loss of $24,110, and a lifetime loss of $964,400—nearly $1 million, according to analysis by the National Women’s Law Center using 2019 U.S. Census data. The same study shows white women’s typical lifetime loss, compared with white men, is $555,360.

Women are also more likely than men to be caregivers, resulting in career interruptions. During this time, they may be unable to earn income, save money, or accrue Social Security benefits. The situation went from bad to worse in 2020, when women in low-wage jobs and female-dominated service sectors bore the brunt of the COVID-19 pandemic’s economic impact.

Chronic unemployment or underpayment keeps people from saving or forces them to dig into their savings to pay for necessities, which slows or negates the accumulation of resources that people could use in later life, Sanzenbacher says. “You can only save if you’re above that point where you can afford to put some money away,” he notes.

Racial disparities negatively impact Black women’s health

It’s not just the economic disparity that hurts Black women’s retirement prospects. Experts point out that their health can play an outsize role. 

“Some of us may work in a toxic environment…being exposed to discrimination, racism, sexism, and all types of workplace traumas that could affect our bodies and minds,” says Ijeoma Opara, Ph.D., LMSW, a professor at Yale School of Public Health. 

As a result, Black women have the highest levels of what public health researchers call allostatic load—the cumulative burden of bodily “wear and tear” from chronic stress and adverse life events, compared with other groups in the workplace. Allostatic load is linked to cognitive and physical decline, breast cancer in Black women, heart disease, diabetes, and even death.    

Health issues like these can complicate retirement plans. While most U.S. adults have a chronic condition, rates are much higher for Black, Latino, Native American, low-income, and uninsured individuals. Chronic conditions require frequent doctor visits, treatment, and expensive medications to manage. Some have to delay their retirement plans to keep their employer-based insurance coverage. 

Tonya Phillips, 64, understands this all too well. Phillips lives in Conyers, Ga., with her husband of 34 years and is at the tail end of a public health and education career. She and her husband were “very diligent” with their employer-based retirement plans—“it was always a part of the discussion in my household”—and both inherited real estate that solidified their retirement plan. “I know that if things get really rough, I always have a place to lay my head,” she says.

She was on track to retire in May this year, with plans to get on Medicaid after work ended, but those plans changed after her breast cancer diagnosis in November 2021. “The reason I am still working is because health insurance is of the utmost importance for me right now. Yes, I could look in the [health insurance] marketplace and look for other things, but I know that I have good coverage right now.”

A 2018–19 University of Michigan National Poll on Healthy Aging found that one in five U.S. adults ages 50 to 64 either kept a job, considered delaying retirement, or delayed retirement to maintain their employer-based health insurance. 

Phillips had known her breast cancer surgeon for several years. The surgeon insisted that she get an earlier-than-recommended screening, which led to a “very, very” early cancer diagnosis. “But it would’ve been a much different scenario had I taken that chance of saying, ‘Okay, well, I’m healthy, and the last [mammogram] was okay,’ and to have been diagnosed with breast cancer and not have good health insurance.”

Phillips has not needed to undergo chemotherapy and is on medication for preventive measures.

“Health is an important part of the different patterns of retirement that we do see,” says Matt Mutchler, professor of health science at California State University, Dominguez Hills, pointing out that many are also “forced into an earlier retirement” owing to accumulated adverse health consequences “over the entire life course.” Being compelled to retire early means less opportunity to earn wages and contribute to savings, making it less likely that you’re retiring with financial security. Mutchler says people who retire early when not financially ready “are going have financial consequences for the rest of their lives.”

Strategic planning for older age, health, and retirement is crucial for Black women. Experts say they should work toward creating a community that can help provide trusted care and support in older age, when health is likely to decline, while also being vigilant about finances. Improving financial literacy through digital tools, books, and podcasts aimed at Black women can be empowering. Check to see if you’re maximizing your employer’s financial wellness benefits. A financial adviser, particularly one who is Black, may help you navigate issues uniquely faced by Black women. The Association of African American Financial Advisors has a tool to help locate one. Lastly, Black women should normalize money conversations by talking with family and friends about financial security and retirement.