Wednesday, September 7, 2016
As Baby Boomer partners retire, law firms face increasing costs and client issues was published in the ABA Journal. The article focuses on the upcoming retirement of law partners from the Baby Boomer and Silent Generations cohorts. "Nearly half of the partners in the nation’s top 200 law firms are Baby Boomers or members of the older Silent Generation. And that means there will be a wave of upcoming retirements that will be the most ever experienced by BigLaw...Sixteen percent of partners will retire in the next five years and 38 percent will retire in the next decade, the American Lawyer (sub. req.) reports...."
The impact of these potential retirements will ripple across law firms, including leadership, client relations, and revenues. The firms will also face other costs-the actual costs of paying for retirements from pensions, revenues, return of capital, etc. The article also notes that some firms are taking specific steps to weather this retirement wave by "trying to reduce retirement costs by raising the retirement age; capping the annual payout from annual earnings; or changing the payout formula, and switching to defined contribution plans in which the lawyers carry the risk of a declining market."
My colleague, Becky Morgan, posted recently about the trend of senior-aged consumers as customers of Uber and other ride-hailing companies. Smart marketing for the alternatives to traditional taxi-cabs includes finding ways for seniors to use and pay for services without smart phones.
Additional research demonstrates that seniors may also play an increasing role in the work force for ride-hailing companies. They are drivers, not just passengers (both literally and metaphorically). The latest research from the JP Morgan Chase Institute introduced me to a new label -- the "gig economy," and ride-hailing services are just one part of that economy:
Our research shows that a rising number of seniors are supplementing their income -- in non-trivial amounts -- by participating in the "gig economy", or Online Platform Economy. . . Among all adults, participation in the Online Platform Economy has been growing very quickly. To measure this growth, we assembled a dataset of over 260,000 anonymized Chase customers who earned income from at least of of 30 distinct platforms between October 2012 and September 2015 -- the largest sample of platform earners to date. During this period, the cumulative participation rate grew from 0.1% of adults to 4.2%. a 47-fold growth.
Although most participants in the platform economy are younger workers, seniors are not standing on the sidelines. In the 12 months ending September 2015, about 0.9 percent of seniors were providers in the
in the platform economy, compared to 3.1 percent of the general population. With over 47 million seniors in America, this translates to over 400,000 seniors participating in the platform economy.
For those seniors who do participate, their earnings are often substantial. In our research, we distinguish between labor and capital platforms. Labor platforms, such as Uber or TaskRabbit, connect customers with freelance or contingent workers who perform discrete projects or assignments. Capital platforms, such as eBay or Airbnb, connect customers with individuals who rent assets or sell goods peer-to-peer.
For more on participation of seniors in the Gig Economy, and for other interesting data points about seniors as both workers and spenders, read Past 65 and Still Working: Big Data Insights on Senior Citizens' Financial Lives, from JP Morgan Chase Institute.
Monday, August 29, 2016
We often report on crimes against older adults on this blog, but last week an 80-year-old former University of Arizona professor pleaded guilty to theft of more than $80,000 from his employer. How did he accomplish that?
The animal sciences professor was in charge of the land-grant university's "Meat Store" in Tucson and was charged with diverting thousands of dollars in proceeds from sales of meat into his own bank accounts. John Marchello worked for U of A for more than 50 years, and retired just days before his indictment in 2015. Indeed, I attended U of A many moons ago, and as a former 4-Her who took a few Ag Sciences courses along the way, I probably even took a "meats lab" course from him.
Talk about alternative "long-term care" planning. Sadly, Marchello is scheduled to be sentenced in November and faces a potential sentence between one and three years for the Class 4 felony.
There is also a civil suit pending, alleging more than $200,000 in theft. For more, see Longtime UA Professor Pleads Guilty.
Sunday, August 21, 2016
Did you know there is such a thing? The New York Times recently ran an article, More Older People Are Finding Work, but What Kind?, that features a new brief from the Center for Retirement Research. The Times article explains
As men and women 55 and older looking for employment probably suspect, at a certain point the kinds of jobs available to them narrow significantly. New research by Matthew Rutledge, an economist at the Center for Retirement Research at Boston College, found that they are increasingly being funneled into what he describes as “old-person” jobs.
And not surprisingly, older workers with the least education have the narrowest set of opportunities, though Mr. Rutledge found this effect was small.
It turns out that “old-person” jobs are a mix of high-skilled service work (like managers, sales supervisors and accountants) and low-skilled service work (like truck drivers, janitors and nursing aides). Absent from the top of the list are jobs calling for a fair amount of physical labor. Jobs in farming, manufacturing and repair represent less than a quarter of all new hires in this age bracket.
The brief from CRR, How Job Options Narrow for Older Workers by Socioeconomic Status offers these findings
Job-changers over age 50 increasingly end up in “old-person” jobs, with a high share of older hires relative to prime-age hires.
These basic findings hold by gender and by education.
However, the overall outlook has improved since the late 1990s for all groups, particularly for older women with more education.
Also, older job-changers hired into “old-person” jobs are paid no less than other jobs.
The full brief, available here as a pdf, examines "suitable" employment, with the introduction explaining
The ability of older job-changers to find "suitable" employment affects both their current income and their ability to work long enough to secure an adequate retirement income. One measure of suitable employment is the range of occupations available to them. This brief, based on a recent study, assesses the extent to which occupational options narrow for workers as they age from their early-fifties to their mid-sixties and whether the pattern varies by gender or socioeconomic status, as measured by education level.
Back to the Times article, which lists most and least common "old person" jobs (hint-lawyers are in the "least common" category). The Times story also discusses several other studies regarding elders in the work force. This would be a great article to include in an unit on economic security or in a discussion regarding ageism.
Friday, August 19, 2016
We have all heard stories about SSA determining that a beneficiary is dead, when the beneficiary isn’t. Proving you are very much alive has to be a fun experience (just joking in case anyone from SSA is reading this blog). Usually the stories about someone being “SSA-dead” is limited to a person. The Washington Post recently ran a story about a group of beneficiaries being declared dead by SSA. Dead or alive? Social Security misclassified some explains “Social Security officials have discovered 90 cases in their records where the living were listed as deceased. That’s 90 “as of today,” Mark Hinkle, an SSA spokesman, said late Thursday. “We are not yet sure how many were in error.” The 90 are from a group of 19,000 cases.” Note that means more of the 19,000 may be “SSA-dead”.
There is some humor in all of this (the 90 of you declared SSA-dead, my sympathies (no pun intended folks--sympathies for the hassle) and really I’m not making light of your situation). “Ironically, the erroneous cases are from pilot projects in Virginia, North Dakota and South Dakota, designed “to enhance the quality of our death records,” Hinkle said. … Clearly, there is more work to be done on that point.”
Clearly this is no laughing matter if you are one of those declared dead-there are significant financial implications, including a loss of benefits. Plus other federal agencies get death info from SSA, so the impact is more widespread than just SSA. SSA is on it, and as for those other folks who may be SSA-dead and not know it, “SSA plans to send letters to the 19,000 people potentially affected with information on how to find out if the agency thinks they are dead and how to correct the record if that’s the case.”
I’m just saying, if you live in VA., ND or SD and get a letter from SSA in your mailbox, you may want to sit down before you open it…
Sunday, August 7, 2016
Investment News published a story about retirement security across the globe, and reports that the U.S. ranks #14. U.S. comes in 14th in global ranking of retirement security reports on Natixis Global Asset Management's annual ranking. The article explains that Norway, Switzerland and Iceland came in 1, 2 and 3 respectively, while the U.S. finished at 14 out of 43. According to the article, we did better in some categories, even breaking the top 10, for example, "No. 7, in the health care part of the index." But bummer, we were "No. 30 for life expectancy." But even more of a bummer, "[o]ne area in which the U.S. had an abysmal ranking was in its high level of income inequality, which helped drive it down to No. 37 of the 43 countries. The U.S. and Singapore share the dubious distinction of being the only countries in the top five for income per capita and in the bottom 10 for their large gaps in income equality." According to the article "Norway joins a number of top 10 countries in having a compulsory workplace savings program. It requires employers to fund private retirement accounts with 2% of a worker's earnings annually. That pales next to Australia, No. 6, where employers must kick in at least 9.5%. "
The full Natixis report is available here.
Friday, July 29, 2016
My good friend (and former New York Administrative Law Judge) Karen Miller recently had successful hip replacement surgery and I was happily amused when I realized she wasn't home two hours before she was already corresponding with me about the latest hot topics in "aging." Karen is a great example of an "active mind!"
Her latest communications focused on a topic I'd also been discussing recently with Stephen Maag, Esq., Director of Residential Communities for LeadingAge. Steve had mentioned that one of the challenges facing senior living across the board was attracting an appropriately trained and stable work force.
Karen pointed out to me that her CCRC (or, to use the latest label, Life Plan Community) in Florida was looking into partnering with a local high school and community college to provide financial support to students as well as site-based training in senior living. For example, Certified Nursing Assistants or CNAs may often think of hospitals or "nursing homes" as primary employers, but Karen pointed out that active senior living communities may offer far more attractive opportunities for employment, while still needing workers, such as CNAs, with specialized skills .
Karen pointed me to an article about a similar collaborative program in Maryland already under operation:
Thanks to a partnership with Ingleside at King Farm, a not-for-profit continuing care retirement community (CCRC) in Rockville, Maryland, students get first-hand experience in senior living and caregiving while residents enjoy participating in their education. And the partnership proves mutually beneficial, providing the CCRC access to a well-trained labor supply.
“Having a program like this exposes the younger generation to the health care field,” Adaeze Ikeotuonye, Ingleside at King Farm’s health care administrator, tells SHN. “Not many people in high school are necessarily thinking of working in the senior living industry, but bringing them in at such a young age and letting them see what the career possibilities are—that mixes up the dynamics.”
For more about creative partnerships to deal with caregiver shortages, read Senior Housing News' "CCRC Helps Forge High School-to-Senior Living Career Path."
Thanks to Karen for this link and best wishes for continued rapid recovery.
Tuesday, July 26, 2016
The Washington Post published an interesting article reporting on the recent Alzheimer's Association International Conference in Toronto. According to the article,
Two studies looked at how complex work and social engagement counteract the effects of unhealthy diet and cerebrovascular disease on cognition. One found that while a “Western” diet (characterized by red and processed meats, white bread, potatoes, pre-packaged foods, and sweets) is associated with cognitive decline, people who ate such food could offset the negative effects and experienced less cognitive decline if they also had a mentally stimulating lifestyle.
Occupations that afforded the highest levels of protections included lawyer, teacher, social worker, engineer and doctor; the fewest protections were seen among people who held jobs such as laborer, cashier, grocery shelf stocker, and machine operator.
“You can never totally forget about the importance of a good diet, but in terms of your risk of dementia, you are better able to accommodate some of the brain damage that is associated with consuming this kind of (unhealthy) diet,” said Matthew Parrott, a post-doctoral fellow at the Rotman Research Institute in Toronto, who presented the study.
In another study, researchers found that people with increased white matter hyperintensities (WMHs) – white spots that appear on brain scans and are commonly associated with Alzheimer’s and cognitive decline – were able to better tolerate WMH-related damage if they worked primarily with other people rather than with things or data.
For more of the intriguing findings, read "Complex Jobs and Social Ties Appear to Help Ward Off Alzheimer's, New Research Shows."
Sunday, July 24, 2016
Stetson Law Elder Law LL.M. alum and president of NELF, Amos Goodall, sent me the link to his most recent article. Retirement account planning can greatly benefit descendants.
The article opens
Many folks have large retirement accounts. According to the Investment Company Institute 2016 Yearbook, in 2015, members of 60 percent of U.S. households had invested $24 trillion in retirement market assets, including individual retirement accounts, 401(k)s, 403(b)s, simple IRAs and others. This article discusses IRAs, and someone with any others should consult legal and financial advisers. In fact, every general rule stated in this article is subject to exceptions, and there may also be specific situations where these rules should be purposefully ignored. This article should be considered as simply a guide for asking questions of your adviser, rather than a road map for do-it-yourself action.
Congratulations Amos and thanks for bringing the article to our attention!
Wednesday, July 6, 2016
Not everyone retires. Some don't retire because they love the work they do. Others can't afford to retire. Still others change professions, but keep working. What will you do?
The Pew Research Center released a new FactTank report on June 20, 2016 about elders and work, More older Americans are working, and working more, than they used to. Using data from the Bureau of Labor Statistics, the Pew report explains
More older Americans – those ages 65 and older – are working than at any time since the turn of the century, and today’s older workers are spending more time on the job than did their peers in previous years ... In May, 18.8% of Americans ages 65 and older, or nearly 9 million people, reported being employed full- or part-time, continuing a steady increase that dates to at least 2000 (which is as far back as we took our analysis). In May of that year, just 12.8% of 65-and-older Americans, or about 4 million people, said they were working.
The report shows that the increase in elders working is steady across the age ranges (65-69, 70-74, and 75+) but with a slightly greater percentage of elder men over women. And when I say working, I mean they are working. "Not only are more older Americans working, more of them are working full-time. In May 2000, 46.1% of workers ages 65 and older were working fewer than 35 hours a week (the BLS’ cutoff for full-time status). The part-time share has fallen steadily, so that by last month only 36.1% of 65-and-older workers were part-time."
The jobs elders hold fall across a spectrum of mainly white-collar type jobs, "older workers are more likely to be in management, legal and community/social service occupations than the overall workforce, and less likely to be in computer and mathematical, food preparation, and construction-related occupations."
In New Jersey, ORANJ is an organization for residents of "continuing care retirement communities" (or CCRCs, also sometimes known as "Life Plan Communities," following a LeadingAge marketing study and plan announced in November 2015). Founded in May 1991, members recently celebrated their 25th anniversary. In a summer 2016 newsletter, called, appropriately ORANJ Tree, residents from three communities reported on major changes in ownership of their facilities, and how such changes can affect community moral and future prospects. The CCRCs discussed were:
- 2016: Cadbury at Cherry Hill (reporting a new ownership is part of a conversion from nonprofit status to for-profit)
- 2016: Franciscan Oaks
- 2013: Fountains at Cedar Parke
In my observation, these New Jersey transactions, especially a conversion from nonprofit to for-profit, are part of a larger, national picture of communities struggling for identity in a competitive senior living market.
Tuesday, July 5, 2016
Modern Healthcare ran an article that got me thinking about whether we will see mandatory retirement being applied to the certain doctors. More hospitals screen aging surgeons to make sure their skills are still sharp was published on June 11, 2016. The article starts with relating the story of one facility and a 79 year old surgeon returning to work after some health problems. The facility had concerns but the article notes, "[t]hey had few tools at their disposal, though. Hospital policy limited interventions to clinicians who had made medical mistakes. [The surgeon] had never had an adverse event with a patient under his care." The chief of surgery at this hospital suggested a program from "Maryland that provides cognitive and physical examinations for aging surgeons."
We all know that conversations with someone about their diminished abilities are very difficult to have. The article offers a nod to that. Everyone is living longer, even doctors, and longevity along with "[a]dvances in medicine, personal wellness and public health, along with the desire to preserve a sense of purpose and their lifelong identity, have led many to work well beyond traditional retirement age." Some facilities are developing policies to evaluate their continued practice of medicine, "policies that require clinicians of a certain age to undergo physical, cognitive and clinical testing. Those programs have been met with ire by career practitioners, who argue that age is just a number. Doctors—no matter what their age—already must renew their medical licenses at regular intervals with state medical boards." Critics note that renewals of licenses don't test "for age-related cognitive and physical decline that could harm the quality of care provided to patients." (does this debate sound familiar to anyone?)
The article then moves into a discussion of the ADEA and mandatory retirement and whether mandatory retirement should be applied to doctors. The American Medical Association (AMA) issued a report in 2015 on age-related declines with clinicians and is working on the beginnings of "research opportunities to inform preliminary guidelines for assessing senior and late-career physicians." This year the American College of Surgeons (ACS) "recommended that surgical specialists undergo voluntary and confidential baseline physical examinations at regular intervals starting between ages 65 and 70."
The article notes that some health care facilities have instituted their own requirements. "The policies vary in terms of the ages at which clinicians begin screening and what the exams require. Some call for clinicians to complete clinical skill and physical health screening every couple of years. Others require a more controversial cognitive test, which the AMA is leery of supporting." There is no uniformity yet with these programs. As far as the doctor at the beginning of the article? He did go through a program and passed. The surgeon "did recently decide to shift some of his responsibilities and now spends more time on training and education with another physician taking the role of chief of vascular surgery. [The surgeon] also became an advocate who encourages his colleagues to consider it."
Monday, June 27, 2016
Do retirement advisors have to comply with the fiduciary standard when giving clients advice? If you said yes, you'd be right in line with what most folks think. After all, isn't your financial advisory giving you advice about your retirement investments? The New York Times article, Isn’t Honesty the Best Policy? explores this issue.
"The Department of Labor has been working since 2010 to hold everyone who provides financial retirement advice to this standard. After multiple public comment periods and significant consultation with industry leaders, consumer advocates and other experts, the department published a final rule that went into effect this week but provides the industry with a realistic transition period." But not all are on board with using the fiduciary standard for financial advisors. So there was lobbying and action in Congress. "Their lobbying worked. Republican majorities in the House and Senate pushed through a bill to block the Department of Labor’s rule. On Wednesday, President Obama rightly vetoed it."
But that isn't the end of it. "[T]he Chamber of Commerce and other industry groups are trying a different route. Using similar arguments they made when lobbying Congress, they filed a last-ditch lawsuit in United States District Court for the Northern District of Texas ... to prevent the rule from being enforced." The lawsuit claims that it creates an "unwarranted burden" but the author of the article responds to that point: "I almost can’t believe this even needs to be said, but it’s not unwarranted to burden retirement advisers with a requirement that they act in their clients’ best interest."
According to the article, the opposition of the regulations may be speaking from both sides of their mouths, because "[w]hile financial executives complained to the Department of Labor that the rule was “immensely burdensome” and “very difficult” to comply with, they were telling investors on Wall Street that they “don’t see it as a significant hurdle” and that efficiently complying with the rule could provide a competitive edge in the market."
"If the fiduciary standard is good enough for medical care, legal advice and accounting, it is good enough for financial retirement advice. We don’t accept less anywhere else in commerce. Why should we accept it from those we trust to protect our retirement savings?"
Ask your advisor about the advisor's compliance with the fiduciary standard. It's important.
Wednesday, June 22, 2016
It's that time of the year! The Social Security Trustees and the Medicare Trustees released their 2016 reports. There is always a lot of information in these reports, but what everyone wants to know is when these programs are "running out" of money. According to the Social Security Trustees 2016 report, the SSDI and Retirement funds (combined) are "good" through 2034, although individually the SSDI fund isn't as robust, with its solvency at risk in 2023.
Here is an excerpt from the summary:
The Bipartisan Budget Act of 2015 was projected to postpone the depletion of Social Security Disability Insurance (DI) Trust Fund by six years, to 2022 from 2016, largely by temporarily reallocating a portion of the payroll tax rate from the Old Age and Survivors Insurance (OASI) Trust Fund to the DI Trust Fund. The effect of updated programmatic, demographic and economic data extends the DI Trust Fund reserve depletion date by an additional year, to the third quarter of 2023, in this year's report. While legislation is needed to address all of Social Security's financial imbalances, the need remains most pressing with respect to the program's disability insurance component.
The OASI and DI trust funds are by law separate entities. However, to summarize overall Social Security finances, the Trustees have traditionally emphasized the financial status of the hypothetical combined trust funds for OASI and DI. The combined funds satisfy the Trustees' test of short-range (ten-year) close actuarial balance. The Trustees project that the combined fund asset reserves at the beginning of each year will exceed that year's projected cost through 2028. However, the funds fail the test of long-range close actuarial balance.
The Trustees project that the combined trust funds will be depleted in 2034, the same year projected in last year's report....
The estimated depletion date for the HI trust fund is 2028, 2 years earlier than in last year’s report. As in past years, the Trustees have determined that the fund is not adequately financed over the next 10 years. HI tax income and expenditures are projected to be lower than last year’s estimates, mostly due to lower CPI assumptions. The impact on expenditures is mitigated by lower productivity increases.
Looking at the separate programs Part A (HI) and Part B (SMI) the picture for SMI is a bit better
The SMI trust fund is adequately financed over the next 10 years and beyond because premium income and general revenue income for Parts B and D are reset each year to cover expected costs and ensure a reserve for Part B contingencies. A hold-harmless provision restricts Part B premium increases for most beneficiaries in 2016; however, the Bipartisan Budget Act of 2015 requires a transfer of funds from the general fund to cover the premium income that is lost in 2016 as a result of the provision. In 2017 there may be a substantial increase in the Part B premium rate for some beneficiaries. (See sections II.F and III.C for further details.) ...
Monday, June 13, 2016
Professor Laura L. Carstensen, PhD, who is the director of the Stanford Center on Longevity, has an intriguing essay in a recent issue of Time magazine, focusing on research on social engagement among the Boomer generation. She writes
The 55-to-65-year olds just about to join the ranks of the elderly are far less socially engaged now than their predecessors were at the same age 20 years ago. And this pattern emerged across all traditional measures of social engagement: Boomers are less likely to participate in community or religious organizations than were their counterparts 20 years ago. They are less likely to be married. They talk with their neighbors less frequently. And it doesn't stop with participation in communities and neighborhoods: boomers report fewer meaningful interactions with their spouses and partners than did previous generations, and they report weaker ties to family and friends.
She asks, "Should we be worried about these trends?" For her answers, read "Baby Boomers are Isolating Themselves as They Age." (Hint, the subtitle says: "That's bad -- for everyone.")
Friday, June 10, 2016
How long do you plan to work, if you are a Baby Boomer? According to one survey from the Center for State and Local Government Excellence, we are facing a "brain drain" in local governments. The 'Silver Tsunami' Has Arrived in Government explains the survey "indicates that governments are experiencing an uptick in retirements. More than half -- 54 percent -- of surveyed governments reported an increase in retirements last year from 2014, while just 10 percent reported a decrease." Here's where the "brain drain" comes in. According to the story "[b]aby boomers at or near retirement age make up a large share of senior-level managers in many agencies. Compared to the private sector, public-sector workers tend to be older and possess higher levels of education."
The article explores reasons why there seem to be so many retirements these days, including the expiration of union contracts, retirement benefits reductions , etc. And since not all Boomers have hit retirement age yet, the "silver tsunami" is expected to continue "over a number of years given that the youngest baby boomers just turned 52 years old."
The article explains that the survey shows not just retirements but an increase in individuals quitting their jobs.
The survey, 7 pages long with 19 questions and results, is available here as a pdf.
Tuesday, June 7, 2016
John Oliver, in his typically over-the-top, but still informative manner, focuses on the industry of debt collection and how it can be especially troublesome for older adults. Indeed, when I was running an Elder Protection Clinic for Dickinson Law, a significant percentage of our clients were struggling with "old" debts, often connected to health care costs, and were dealing with aggressive attempts to recover what has come to be known as "zombie debt." One woman interviewed about $80k in debt arising out of denial for insurance coverage for her elderly husband's hospitalization for breathing problems, describes her fear and frustration after a lifetime of working and saving. She asks, "Is this how my life is going to end?"
Our thanks to Karen Miller, Esq., in Florida, for sending this link.
Thursday, June 2, 2016
Periodically we post about an article on Social Security, and one of the hot topics of late is when to start drawing Social Security. Do you take Social Security early before you reach your full retirement age, do you wait until that magic number (66 for many) or do you delay taking Social Security to later, even age 70? When you start to claim your Social Security benefit does have ramifications. We have also seen articles about the future viability of the Social Security program.
The Wall Street Journal ran an article recently about a recently published paper on the topic. The article, Here’s How to Get More People to Delay Claiming Social Security offers a view of regarding making Social Security more viable.
Global aging paired with pension shortfalls have led many governments to raise retirement ages and cut benefits. But this approach tends to be unpopular, as demonstrated by loud protests we’ve seen over the last few years from Greece and France to Detroit and, soon, Puerto Rico.
The article explains that the authors offer this proposal to increase the solvency of Social Security by "replacing the current Social Security delayed retirement credit with a lump-sum payment would induce many people to voluntarily defer claiming their Social Security benefits, and many would work more."
In the article, the authors explain the study they conducted to see if their idea would have merit, and they explain that
What we learned from our study is that many people would be willing to claim later and work longer, if they can get the attractive partial buyout from Social Security. Additionally, many who had initially stated that they wanted their benefit as young as possible, were also most willing to delay and work longer when offered the partial buyout.
The authors explain their idea is designed to be "cost-neutral" thus not adding to the woes regarding Social Security's long term prospects. The authors also note that "incentivizing longer work lives could lead to better mental and physical health at older ages for many people, so there could be ample positive social benefits."
The authors' paper is published on SSRN. Will They Take the Money and Work? An Empirical Analysis of People's Willingness to Delay Claiming Social Security Benefits for a Lump Sum. Here is the abstract for the paper:
This paper investigates whether exchanging the Social Security delayed retirement credit, currently paid as an increase in lifetime annuity benefits, for a lump sum would induce later claiming and additional work. We show that people would voluntarily claim about half a year later if the lump sum were paid for claiming any time after the Early Retirement Age, and about two-thirds of a year later if the lump sum were paid only for those claiming after their Full Retirement Age. Overall, people will work one-third to one-half of the additional months, compared to the status quo. Those who would currently claim at the youngest ages are likely to be most responsive to the offer of a lump sum benefit.
Have a plan to retire? Know how you will spend your time? AgeWave, along with Bank of America Merrill Lynch did a study on how people spend their retirements. Beyond the Bucket List: Experience Leisure in a Whole New Way provides the highlights from the study.
Huffington Post ran two blog posts that discussed the report. New Study Uncovers the Upside of Retirement Leisure: The Freedom Zone was published on May 12, 2016 and New Study Reveals Four Distinct Stages of Retirement Leisure on May 13, 2016. The report notes that people who are retired have more free time, but transitioning from work to retirement may be a challenge for some, since, according to the report, many folks work even when they are on vacation. The report discusses emotional well-being and the value of experience over acquisition. The report also discusses the importance of saving for retirement. The report identifies "4 stages of retirement leisure" from "winding down & gearing up" to "contentment & accommodation."
To read the full report, register with Merrill Lynch to download it.
Thursday, May 26, 2016
The percentage of older Americans living below the federal poverty line has decreased by two-thirds since 1966. That year, according to data from the Pew Research Center, 28.5 percent of Americans age 65 and over were poor. By 2012, that number had declined to just 9.1 percent.
But we may be at the end of that happy trendline. I think that over the next five to 10 years we will see a dramatic reversal in the economic fortunes of millions of our oldest residents. That has profound implications for governments at all levels.
Discussing how we fund retirement (the 3-legged stool), the author notes the changes in pension plans, the low amounts saved and the higher amount of debt. This is not particularly new to those of us who teach elder law. But consider the following from the author:
You can put off retirement, and many are. The labor force participation rate for those 65 and older increased from 12.4 percent in 1994 to 18.6 percent in 2014. But you can’t put off aging. The collapse of incomes for this group when they no can longer work is going be a double hit for government, decreasing the taxes they pay just as they need more public services.
The author calls on local governments to be planning for this scenario: "the consequences of dramatic increases in the older poor, including looking at affordable housing, transit and health care." Noting the potential power of the ballot box, the author concludes "Given the size of the baby boom population, a return to the poverty rates that existed among aging Americans before the War on Poverty would result in more than 8 million newly impoverished seniors. They’re not going to sit quietly on a street corner with a tin cup."