How can changes to Social Security improve benefits for Black and Hispanic beneficiaries?

Abstract

The paper found that: (1) Racial and ethnic differences in annual and lifetime Social Security benefits are substantial. We project that average lifetime benefits received by adults born between 2001 and 2010 are 19 percent less for Black beneficiaries than white beneficiaries and 14 percent less for Hispanic beneficiaries than white beneficiaries. Black and Hispanic beneficiaries ages 62 and older in 2080 are projected to be about 10 percentage points more likely to receive limited incomes in 2080 than white beneficiaries. (2) Various benefit enhancements, including creating caregiver credits, making the benefit formula more progressive, and adding a new minimum benefit to Social Security, would disproportionately help Black and Hispanic beneficiaries. (3) However, these benefit enhancements would only modestly narrow racial and ethnic disparities in Social Security benefits. Adding a new minimum benefit tied to years of covered employment would have a particularly modest effect, because relatively few beneficiaries receiving limited benefits complete long careers.