Social Security protects families in the event that a worker retires, becomes disabled or dies. These guaranteed insurance benefits are especially crucial to people of color who tend to have fewer alternative resources, become disabled at higher rates, and rely on Social Security’s family benefit features disproportionately.
ASIAN PACIFIC ISLANDER AMERICANS ARE A DIVERSE GROUP
The Asian Pacific Islander American population is economically and culturally more diverse than other racial and ethnic minorities. While the median household income for all Asians is higher than that of the population as a whole, there is considerable variation within the Asian American, Pacific Islander American ethnic group. For example, Asian American Indians and Filipinos have the highest levels of household income, reflecting their relatively high levels of educational attainment and selective patterns of high-skill immigration to the United States. In contrast, Hmong and Laotian Americans, who came to the United States as refugees with little education, have low levels of household income.
ASIAN PACIFIC ISLANDER AMERICANS RELY ON SOCIAL SECURITY FOR MORE OF THEIR RETIREMENT INCOME
While Social Security is expected to be only one part of a person’s retirement income, many minorities rely on it extensively. Social Security is extremely important for Asian Pacific Islander American retirees because only 21 percent have pensions or annuities, compared to 40 percent of white Americans.
- In 2014, 29 percent of elderly Asian Pacific Islander American married couples and 52 percent of elderly unmarried people relied on Social Security for 90 percent or more of their income.
- The average annual Social Security benefit received by Asian Pacific Islander American men age 65 and older was $15,496 in 2014. For women it was $12,440.
- Social Security keeps 19 percent of elderly Asian and Pacific Islander Americans out of poverty.
PROGRAM ASPECTS IMPORTANT TO ASIAN AND PACIFIC ISLANDER AMERICANS
Social Security provides many elderly Asian and Pacific Islander Americans with their sole or primary source of income in retirement. Although Social Security’s benefit and contribution provisions are neutral with respect to race, ethnicity and gender, several features of the program are especially important to Asian and Pacific Islander Americans. With fewer retirement income resources than white Americans and a life expectancy three years longer than all Americans, Asian and Pacific Islander Americans benefit from Social Security’s lifetime benefit income and the program’s annual cost of living adjustment, as a hedge against inflation in their older years.
PROGRESSIVE BENEFIT FORMULA
Social Security employs a progressive formula that intentionally returns a higher percentage of wages to low-and average-wage earners than it returns to those who have had high earnings. Lifetime earnings directly factor into Social Security’s progressive benefit formula. Asian Americans tend to have lower lifetime earnings because over two-thirds of the population are immigrants and may not have had the opportunity to contribute to Social Security earlier in their working lives.
Disability income accounts for more than half the income of Asian Pacific American workers, widows and adult children with disabilities. More than 56 percent rely on Social Security Disability Insurance for more than 75 percent of their income, compared to 53 percent of white Americans and 52 percent of African Americans. Southeast Asians, particularly Cambodians, Hmong, Laotians and Vietnamese have higher rates of disability because of the effects of the Vietnam War.
LIFE EXPECTANCY/COST OF LIVING ADJUSTMENT
Asians have a higher life expectancy that any other population, making Social Security’s lifetime benefit income and annual cost of living adjustment an important tool for keeping them out of poverty after retirement. Asian American and Pacific Islander men age 65 in 2012 (the most recent year for which data are available) were expected to live to age 85, compared to age 82 for all men. Asian American and Pacific Islander women age 65 in 2012 were expected to live to age 88, compared to age 85 for all women. Given that only 24.4 percent of Asian and Pacific Islander Americans have pensions and retirement savings, the vast majority rely on Social Security as their only source of guaranteed lifetime income in retirement.
Government Relations and Policy Department, July 2017