Inequality and Insecurity in Retirement:

Racial disparities in retirement plan coverage, assets and adequacy in the U.S. and Massachusetts

By Hope Bodenschatz and Jeffrey Thompson, the Federal Reserve Bank of Boston, Aja Kennedy and Luc Schuster, Boston Indicators

June 5, 2024

In recent years, civic leaders have come to recognize racial wealth inequality as among the most pressing issues facing our region. But the policy conversation around wealth building has somewhat overlooked the importance of retirement savings. So, in this paper, Boston Indicators partnered with Jeffrey Thompson and Hope Bodenschatz of the Federal Reserve Bank of Boston to analyze employer-based retirement plans in the U.S. and Massachusetts. We find that retirement assets are a large part of the wealth puzzle for families at the middle and upper end of the distribution. And retirement composes an even larger share of net assets when including the value of defined benefit pensions. After including those estimates, the paper finds that defined benefit pensions have been especially helpful for Black workers, as they have been a bit more likely than other workers to be enrolled in public sector pension plans nationwide. Still, large racial and income-based disparities in retirement security remain.