How Big Is the Racial Retirement Security Gap?

"While considerable inequality exists in retirement preparedness, it is significantly less than exists in the distribution of wealth and earnings before retirement," the report states. "The reason, though, is that minorities have a lower standard of living to maintain than whites."

The report finds, though, that the pattern over time is "somewhat surprising" — with the retirement preparedness situation of blacks holding relatively steady and that of Hispanics deteriorating sharply.

From 2007 to 2016, retirement risk for all three groups increased, but the gap between whites and blacks narrowed while Hispanics fell further behind, according to the report. In 2007, the share of blacks at risk was 52% and 51% for Hispanics; comparatively, the share of whites at risk in retirement was 42%.

The data suggest that the deterioration for Hispanics reflects their buying housing in the wrong places at the wrong time.

While the decline in house values was about the same for blacks and whites, Hispanic households saw their median value drop by 41% between 2007 and 2016.

According to the report, the reason for the serious hit to Hispanics' home equity is that the housing downturn had a distinct geographic pattern, with Nevada, Florida, Arizona and California experiencing the sharpest declines.

Overall, about 40% of all Hispanic households in the country resided in the hardest-hit states, compared with only 20% of white and black households.

The decline in housing values was only part of the damage done by the bursting of the housing bubble; the other dimension is homeownership. Homeownership rates in 2016 were lower across the board than in 2007 The declines, however, have been particularly large for black and Hispanic households; less than half of which now own homes.

Meanwhile, the steadiness in retirement preparedness for blacks is a function of falling earnings at the bottom of the income distribution and Social Security's progressive benefit formula.

"Maintaining a low level of income with little wealth may not be that much more difficult than maintaining a high level of income with lots of wealth," the report states.

A key reason is that Social Security boosts the replacement rates for low earners, which helps explain why the gap in the NRRI between blacks and whites has narrowed since the financial crisis and recession, according to the report.

—Related on ThinkAdvisor:

• 4 Personality Traits That Influence the Path to Retirement
• The Growing Gap in Social Security Benefits