Why Do Late Boomers Have So Little Retirement Wealth?
Published: | 9:11 am | Posted in: Retirement Security
Over the last 40 years, the retirement system has shifted from defined benefit plans to defined contribution plans, primarily 401(k)s and Individual Retirement Accounts (IRAs). This shift has been accompanied by a decline in Social Security benefits relative to pre-retirement earnings as the program’s Full Retirement Age has moved from 65 to 67. Thus, the […]
The Forgotten Middle: Many Middle-Income Seniors Will Have Insufficient Resources For Housing And Health Care
Published: | 9:57 pm | Posted in: Private Pensions
As people age and require more assistance with daily living and health needs, a range of housing and care options is available. Over the past four decades the market for seniors housing and care—including assisted living and independent living communities—has greatly expanded to accommodate people with more complex needs. These settings provide housing in a […]
How Do Older Workers Use Nontraditional Jobs?
Published: | 4:37 pm | Posted in: Private Pensions
Working consistently through one’s fifties and early sixties is key to attaining retirement security. However, workers also need access to retirement plans – so they can continue to accumulate resources – and health insurance – so they can avoid withdrawing assets in the event of a health shock. Workers without access to these benefits will […]
Will More Workers Have Nontraditional Jobs as Globalization and Automation Spread?
Published: | 3:08 pm | Posted in: Private Pensions
Recent research has called attention to alternative employment arrangements that often leave workers without retirement and health benefits and with income instability. At the same time, workers are facing increasing competition from automation and globalization. This competition is of special concern for older workers, who increasingly need longer careers to secure an adequate retirement and […]
Retirement Prospects for the Millennials: What is the Early Prognosis?
Published: | 3:37 pm | Posted in: Social Security
Various policy developments and long-term economic, social, and demographic trends raise worrisome questions about the financial security of future retirees. An erosion in employer-sponsored defined benefit pension coverage and the increase in Social Security’s full retirement age could shrink future benefits. Stagnating employment and earnings for men could threaten future retirement security, because retirement benefits […]
Will the Financial Fragility of Retirees Increase?
Published: | 9:33 pm | Posted in: Retirement Security
The elderly have long been seen as financially fragile, meaning that they may be ill-equipped to absorb a financial shock. The key reason is that, once retired, they have little ability to increase their income compared to working households. Going forward, retirees will get less of their income from Social Security and traditional pensions and […]
Modernizing Social Security: Caregiver Credits
Published: | 6:48 pm | Posted in: Caregiving, Social Security
Women still tend to work fewer years and earn less than men, which leads to less income in retirement. One reason is that women are often still the main family caregiver. Traditionally, Social Security has recognized this role by providing spousal and widow benefits for married women. Today, however, many women are not eligible for […]
Replacement Rates for Hypothetical Retired Workers
Published: | 4:39 pm | Posted in: Social Security
Adequacy and equity of Social Security benefits are major policy considerations for the program. One measure of adequacy is the percentage of pre-retirement earnings that Social Security benefits replace, or the “replacement rate”. The numerator of this replacement rate is well established as the Social Security benefit. One indicator of equity is the degree of […]
Medicare and Social Security: What you paid compared with what you get
Published: | 5:41 pm | Posted in: Social Security
Earlier this week, we published a story and several charts showing that average government spending on each elderly person is $26,355, compared to $11,822 for each child. Almost immediately, readers wrote to condemn us for overlooking what they considered a key issue. “Your statements as to expenditures on the elderly is specious at best, and at the […]
401(K)/IRA HOLDINGS IN 2016: AN UPDATE FROM THE SCF
Published: | 8:18 pm | Posted in: Private Pensions
Introduction The key supplement to Social Security benefits is accumulations in employer-sponsored retirement plans. Increasingly these accumulations occur in 401(k) plans and Individual Retirement Accounts (IRAs). The release of the Federal Reserve’s 2016 Survey of Consumer Finances (SCF) is a great opportunity to see how a strengthening economy, the continued maturation of the 401(k) system, […]
Are Retirees Falling Short? Reconciling the Conflicting Evidence
Published: | 1:44 pm | Posted in: Retirement Security
Abstract This paper examines conflicting assessments of whether people will have adequate retirement income to maintain their pre-retirement standard of living. The studies that it examines use data from the Survey of Consumer Finances (SCF), the Health and Retirement Study (HRS), and the HRS supplement Consumption and Activities Mail Survey (CAMS). Critical components of the analysis are behavioral assumptions about household […]
Investment Returns: Defined Benefit vs. Defined Contribution Plans
Published: | 1:42 pm | Posted in: Private Pensions
The brief’s key findings are: The analysis compares returns by plan type from 1990-2012 using data from the U.S. Department of Labor’s Form 5500. During this period, defined benefit plans outperformed 401(k)s by an average of 0.7 percent per year, even after controlling for plan size and asset allocation. In addition, much of the money accumulated in 401(k)s […]
The Impact Of Social Security Income On Cognitive Function At Older Ages
Published: | 7:05 am | Posted in: Alzheimer's Disease: Cure & Care, Social Security
Prior literature has documented a positive association between income and cognitive function at older ages, however, the extent to which this association represents causal effects is unknown. In this study, we use an exogenous change in Social Security income due to amendments to the Social Security Act in the 1970s to identify the causal impact […]
Clearing a Path for State-based Retirement Plans
Published: | 6:11 pm | Posted in: Private Pensions
What’s the number one way that workers save for retirement? Job-based 401(k) plans, which provide a vehicle for workers to put aside pre-tax dollars that are often matched by their employers. About one-third of American workers lack access to a retirement plan at work. While workers without access to a workplace plan can save on […]
Why raising the Social Security retirement age really does hurt the poor the most
Published: | 8:57 pm | Posted in: Social Security
a Social Security check means something very different to someone with no retirement savings than it does to someone with hefty retirement savings. Cutting 11 percent of the check someone lives on and 11 percent of the check someone barely notices are not the same thing. And, finally, cutting 11 percent of the check of […]