Rising Health-Care Costs Concern Affluent Blacks

Northern Trust surveyed 361 affluent Black households (those with total income greater than $250,000 or with at least $1 million in investable assets) and 256 other affluent households for comparison purposes.  Northern Trust found many concerns regarding retirement, and also concluded that affluent Blacks are more inclined towards charitable giving, as well as supporting adult family members.

Regarding retirement, affluent Blacks have the following concerns: 

• Rapidly rising health-care costs, 57% 
• Increases in taxes, 47% 
• Health of their self or spouse, 47% 
• Stock market volatility, 41% 
• Inflation eating into savings, 40% 
• Financial uncertainty of Social Security and Medicare, 39% 
• Possibility of outliving savings, 37% 

Using financial advisers was not very common; the study found that more than half of wealthy Blacks (58%) have not worked with a financial adviser in the past five years to establish either an estate or wealth transfer plan. Fifty-four percent have not set up a personal trust.  

On the subject of charitable causes, the survey found:

• Fifty-two percent of Black respondents give to educational institutions, compared to 39% of other households.
• Forty-seven percent of Blacks give to human-services organizations versus 38% of other households.
• Environment or animal causes, however, were more common for other households to donate to, 36%, versus 29% of affluent Black Americans.

The survey also asked respondents to answer questions regarding how much they support family members:

• Fifty percent of affluent Black households support adult children, which is significantly higher than the 24% who said so in the last survey in 2008.
• Thirty-two percent support siblings, 21% support nieces or nephews, and 18% support cousins.
• The most common reason for giving support was “general living expenses;” 59%.

“Among affluent Black families, there are strong cultural expectations to provide for others,” said Mark Welch, director of Global Diversity & Inclusion at Northern Trust. “High unemployment and home foreclosures due to the recession, along with other factors such as increasing health-care costs and longer life spans, add to the feeling that affluent Blacks need to do even more to take care of their families.”