Financial Well-being of State and Local Government Retirees in North Carolina

Abstract

This chapter analyzes how low- and moderate-income retirees utilize retirement savings, and how financially fragile they are, relying on survey data on public employees in North Carolina. We investigate whether retirees make systematic errors when they manage their assets so as to maintain their standards of living, and whether there are notable differences in financial management skills across subgroups. We also ask whether financial literacy is positively associated with lower rates of committing such errors and, and whether low-income households have lower levels of financial literacy leaving them likely to make poor financial decisions. We show that many retirees have no emergency cash, and one quarter maintain high-interest debt while leaving low-return funds in retirement saving plans. Suboptimal debt holding is associated with lower household income and lower financial literacy.

Financial Well-being among Black and Hispanic Women

“…Fulfilling a family caregiver role is a common cause of workforce interruptions for women and limits their ability to save for retirement and qualify for an employer-provided retirement plan (Weller and Tolson, 2020). Even among career employees covered by retirement plans, women are more likely to be in financial distress in retirement (Clark and Liu, 2019). Marital status is also a major factor to be considered, with unmarried women tending to have lower incomes and greater financial difficulties.…”