Among Aging Adults, Inequalities Affect Long-Term Financial Outlook
Most adults in the U.S. age 55 and older have a healthy financial situation and are confident about their future. However, financial situations differ greatly for renters and by race.
In a 2021 survey, Freddie Mac sought to track the attitudes and perceptions of U.S. adults age 55 years and older in several key areas, including their likelihood to age in place. Although the financial situation is generally positive for this population, the survey results underscore existing inequalities.
Overall, for all adults age 55 years and older, our survey showed:
- 72% have enough money to last beyond each payday.
- 74% are confident they will have a financially comfortable retirement.
- 80% plan to leave property or money to their family.
Among renters and non-White respondents, however, the long-term outlook is less encouraging.
Inequalities Between Homeowners and Renters
Homeowners are more financially sound — and better positioned to transfer wealth — than renters, according to the survey.
Differences in day-to-day finances: 79% of homeowners report having enough money to last beyond each payday, while 59% of renters report living payday to payday.
Differences in retirement outlook: 81% of homeowners are confident they will have a financially comfortable retirement, whereas 20% of renters — who have not yet retired — believe they will never be able to retire.
Differences in their position to transfer wealth:
- 56% of homeowning parents are financially able to provide money for a child’s down payment, compared to 17% of renting parents.
- 21% of homeowning parents have already provided a child with money for a down payment, compared to 6% of renting parents.
Inequalities also exist by race.
Inequalities by Race and Ethnicity
In the past five years, adults age 55 years and older have all improved their financial standing, according to the survey. However, Black and Hispanic adults still trail White populations.
Percent Who Have Enough Extra Money to Go Beyond Each Payday
|White||78% (+8% from 2016)|
Percent Who Are Very Confident They Will Have a Financially Comfortable Retirement
|White||39% (+26% from 2016)|
These numbers are amplified by the differences in homeownership rates between White, Black and Hispanic adults. One of the benefits of homeownership is the ability to build wealth over time, but it’s also a space these adults can comfortably control while they age.
Black homeowners (51%) are more likely than Whites (38%) and Hispanics (37%) to stress the importance of homeownership in building generational wealth. Highlighting the inequalities, however, Black adults (30%) are significantly more likely than White (16%) and Hispanic adults (18%) to believe that not everyone has access to safe and affordable housing. Black adults are also less likely than White adults to own a home.
Interested in more consumer research? Gain insights into the housing market from surveys of homebuyers, homeowners and renters in Freddie Mac Consumer Research.