Wednesday, September 29, 2021

Will the 2022 SSA COLA be "record-breaking"?

I don't know if it will be "record-breaking", but the buzz is that it's going to be larger than that of recent history.  CNBC reported Social Security cost-of-living adjustment could be at least 6% in 2022, the higher amount being due to inflation, but the increase in purchasing power will be tempered by the Medicare Part B premiums and income taxes.   The Senior Citizens League (the source of the estimate) explains its process "Our forecast is based on CPI data through August, and there is still one more month of consumer price data to come in before we get the official announcement in October ... [and] [t]his year is particularly difficult to forecast with certainty... [due to] inflation patterns, caused in large part due to the COVID-19 pandemic, [which] were unprecedented...."

It won't be long before we get the official news from SSA. Stay tuned....

September 29, 2021 in Consumer Information, Current Affairs, Federal Statutes/Regulations, Retirement, Social Security | Permalink | Comments (0)

Wednesday, September 15, 2021

Social Security & Medicare Trustees' Reports

We know they come out every year. This year is no exception. They are out! What do we learn from them? I'll give you the highlights here (those of you who have looked at the reports before know they are long and detailed....)

The Medicare Trustees' Report, released August 31, 2021, is available here.  The introduction explains the impact of COVID, and COVID vaccines, on Medicare, but not "Aduhelm, the Alzheimer’s disease drug that has been recently approved."  The introduction also references potential future scientific advances and how that would be factored into projections.  The one thing everyone wants to know from the Trustees Annual Report is what is the fiscal health of Medicare?  "The estimated depletion date for the HI trust fund is 2026, the same as 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 income is projected to be lower than last year’s estimates due to lower payroll taxes."  If you don't have time to peruse the entire report, read the introduction. It's very interesting!

Here's an excerpt from the conclusion:

The Trustees project that HI tax income and other dedicated revenues will fall short of HI expenditures in all future years. The HI trust fund does not meet either the Trustees’ test of short-range financial adequacy or their test of long-range close actuarial balance.


The Part B and Part D accounts in the SMI trust fund are expected to be adequately financed because income from premiums and general revenue are reset each year to cover expected costs. Such financing, however, would have to increase faster than the economy to cover expected expenditure growth.


The financial projections in this report indicate a need for substantial changes to address Medicare’s financial challenges. The sooner solutions are enacted, the more flexible and gradual they can be. The early introduction of reforms increases the time available for affected individuals and organizations—including health care providers, beneficiaries, and taxpayers—to adjust their expectations and behavior. The Trustees recommend that Congress and the executive branch work closely together with a sense of urgency to address these challenges.

The 2021 Social Security Trustees' Report is available through this page.

According to a summary provided by the SSA & Medicare Trustees, "Based on our best estimates, the 2021 reports show:"

• The Old-Age and Survivors Insurance (OASI) Trust Fund, which pays retirement and survivors benefits, will be able to pay scheduled benefits on a timely basis until 2033, one year earlier than reported last year. At that time, the fund's reserves will become depleted and continuing tax income will be sufficient to pay 76 percent of scheduled benefits.

• The Disability Insurance (DI) Trust Fund, which pays disability benefits, will be able to pay scheduled benefits until 2057, 8 years earlier than in last year's report. At that time, the fund's reserves will become depleted and continuing tax income will be sufficient to pay 91 percent of scheduled benefits.

 

September 15, 2021 in Consumer Information, Current Affairs, Federal Statutes/Regulations, Health Care/Long Term Care, Medicare, Retirement, Social Security, Statistics | Permalink

Thursday, September 2, 2021

Examining Use and Misuse of Tax-Exempt or Deferred Financial Retirement Savings Plans As Increasing Economic Disparity

Check out "America is Spending A Fortune to Help Rich People Retire in Luxury," authored by Michael Mechanic. Published this week in Mother Jones, the article examines how "America's most affluent" use Roth IRAs and similar "federally subsidized retirement accounts meant for middle-class savers" to maximize their wealth.  

But it turns out IRAs are only the tip of the iceberg. The bigger problem, according to Steve Rosenthal, a tax attorney and senior fellow at Urban-Brookings Tax Policy Center, is that, thanks to a series of bipartisan bills Congress has passed over the past quarter-century, the government spends a fortune subsidizing a whole range of retirement plans whose benefits flow overwhelmingly to America’s most affluent. “It’s unbelievable the amounts of dollars at stake, and how tilted they are to the high end,” Rosenthal told me. “It’s just staggering.”

 

Indeed, such subsidies are the federal government’s single biggest tax-related expense, costing hundreds of billions of dollars per year. From 2020 through 2024, the JCT estimates, tax breaks and deferrals for retirement contributions will cost the Treasury $1.9 trillion—far more than the cost of the child/dependent or earned income tax credits, tax deductions for charitable donations, tax exclusions on long-term capital gains, or corporate tax breaks for employer-provided health and life insurance benefits. “These retirement reform packages are exceptionally confusing and technical and long and really hard for anyone to sort out,” says Rosenthal, a former JCT staff lawyer himself. “But embedded in every one are easter eggs: big giveaways to the retirement industry and to high-net-worth individuals.”

There is a lot to unpack here, and I could certainly see a seminar course built around this topic, including the complexity of finding solutions that don't harm the more-modest investor who will need every dime in retirement.  

My thanks to University of Virginia Law Professor Naomi Cahn for sharing the article, and to her colleague at UVA, Professor Michael Doran, who is prominently cited in the article  for his critiques of so-called savings reforms that "delivered expensive and unnecessary tax subsidies," that benefited higher income families and the financial services industry.

September 2, 2021 in Consumer Information, Current Affairs, Discrimination, Federal Statutes/Regulations, Retirement, Statistics | Permalink | Comments (1)

Monday, June 21, 2021

Debt and Elders: GAO Report

This GAO report is a couple of months old, but I think it's important enough to bring it to your attention,  Retirement Security: Debt Increased for Older Americans over Time, but the Implications Vary by Debt Type.

Here are the fast facts from the report:

Older Americans held nearly half of the total debt in 2020—debt that may affect their retirement security. We found that older Americans had significantly more debt in 2016 than in 1989.

We also found that low-income, older Americans had greater "debt stress"—the ratio of debts to assets. In 2016, debt stress was about two times higher for minority households than White households.

Experts said that different debt types (credit cards, housing debt, etc.) have varying effects on retirement security. For example, carrying credit card debt with high variable interest rates may make it difficult for the elderly to save for retirement.

The full report is available here, the highlights here.

June 21, 2021 in Consumer Information, Current Affairs, Other, Retirement, Social Security | Permalink | Comments (0)

Thursday, June 3, 2021

Unilateral Attempts to Change Scope of Services in Continuing Care and Life Plan Communities

With lockdowns being lifted in commercial arenas, I'm once again hearing from residents in Continuing Care Retirement Communities (CCRCs), also sometimes called Life Plan Communities, as well as other similar senior living settings.  The most frequently raised concern is "how can management of my community make major changes in services and amenities without asking us if we agree to a new contract?"  Sometimes I am able to recommend local legal counsel for the callers.

As a matter of theory, there's a traditional  "law-based" answer to this question, with state-specific tweaks.  And then there is what happens all too often in real life. 

Generally speaking, the law provides that unilateral attempts by one party to make significant changes in the parties' duties under a contract are not legally effective.  Here's one state Supreme Court's typical statement of the rule of law (written in the context of considering an employer's unilateral attempt to change an employment contract):

The cases dealing with employment contracts are merely part of the general rule that recognizes no difference between an express and an implied contract.... As a result, to effectively modify a contract, whether implied-in-fact or express, there must be: (1) an offer to modify the contract, (2) assent to or acceptance of that offer, and (3) consideration."

Demasse v. ITT Corp., 984 P.2d 1138, 1144 (Az. 1999).  As my law students know, "consideration" is a legal term of art, and generally means a "bargained for exchange." In the context of modification of existing agreements, this often involves new financial terms or mutual concessions in the parties' respective duties.

But, the real-life situation is that the party with the greater bargaining power simply ignores the bargaining process altogether. In employment contexts, that's the employer.  They treat their notice of major changes as "the new agreement" simply because no one objected.  That's not how the rule of law is supposed to work, but it does, all too often.  Indeed, I will confess that the very reason I started teaching Contract law was my growing familiarity with disputes in senior living scenarios that made me wonder if there was something about contract law I'd missed back in my own days as a law student.  There wasn't (although the full explanation would require a law review article) -- but the world keeps spinning along with the more powerful party in many commercial contexts able to avoid the contract because they are "in charge."  

Residents don't, however, have to put up with this.  Resident groups in individual CCRCs and those living in states where there are regional organizations have learned to flex their considerable muscle, both in negotiations with management and with state regulators or legislators.  I'm also hearing from more attorneys who are representing residents in negotiations, or when necessary, in arbitrations or on  lawsuits alleging breaches of contract and fiduciary duties.  Plus, I'm hearing from more states officials who are asking good questions.

It not a secret that I like CCRCs and I like them a lot.  I've visited CCRCs throughout the U.S. and they tend to be vital examples of senior living, offering community engagement, social networks, friendly-settings, caring service providers, and the reassurance of assistance if needed.  Many forms of senior living options are struggling with the impact of the pandemic, with enhanced pressures on facilities to balance their budgets. This is probably triggering a new upswing in attempts to make unilateral changes.  

I have worried, long before the pandemic, that an episodic  history of paternalistic or peremptory changes by management in CCRCs can undermine public confidence in this format as a viable alternative for seniors.  CCRCs have their highest value for consumers when residents are making the transition before becoming too frail to appreciated the amenities and services.  New residents may be unlikely to  "invest" in CCRCs if they lack confidence that promised services will be available when needed.  

June 3, 2021 in Consumer Information, Current Affairs, Estates and Trusts, Ethical Issues, Health Care/Long Term Care, Housing, Property Management, Retirement, State Cases, State Statutes/Regulations, Statistics | Permalink | Comments (0)

Thursday, May 27, 2021

Elders in China Have to Delay Retirement?

A few weeks ago the New York Times ran an article regarding the need for delayed retirement on the part of many Chinese elders. A Graying China May Have to Put Off Retirement. Workers Aren’t Happy, notes that the "Chinese government said it would raise the mandatory retirement age, which is currently 60 for men."  Why, you ask, did China announce this unpopular plan? Because, according to the article, this phased-in "delay [of] the legal retirement age” over the next five years, [is] an attempt to address one of the country’s most pressing issues. Its rapidly aging population means a shrinking labor force. State pension funds are at risk of running out. And China has some of the lowest retirement ages in the world: 50 for blue-collar female workers, 55 for white-collar female workers, and 60 for most men."  The article notes other countries that have taken a similar approach and the bumpy road in doing so.  It also notes that this was a problem decades in the making.  There are ramifications of this approach (beyond unhappy workers), including "[the risk of] undermining another major government priority: encouraging couples to have more children, to slow the aging of the population."

Stay tuned.

May 27, 2021 in Consumer Information, Current Affairs, International, Other, Retirement | Permalink | Comments (0)

Monday, May 17, 2021

Increase in Retirements During Pandemic

The New York Times published an article,  In Reversal, Retirements Increased During the Pandemic. "After decades in which it decreased, the retirement rate rose during the pandemic, according to the latest government data. This makes retirement one exception to the many ways that the pandemic accelerated pre-existing trends .... "  The article examines the explanations for this trend, such as losing employment, an employer going out of business, and the higher risk of illness for those employees who are older.  The article predicts that the trend won't continue. "Even though the retirement rate increased during the pandemic, it won’t necessarily rise further. It’s worth emphasizing that the retirement rate rose around the start of the pandemic but did not continue to do so. After the initial spike in joblessness at the start of the pandemic, the share of those 55 to 64 who were out of work but not retired fell rapidly without a further rise in retirement."

May 17, 2021 in Consumer Information, Current Affairs, Retirement, Statistics | Permalink | Comments (0)

Monday, May 10, 2021

What Happens to Social Security Benefits If the Beneficiary Goes to Jail or Prison?

This semester at Dickinson Law, I've been teaching a comparative law module on Social Security Benefits.  We've been spending more time than usual examining issues associated with basic "retirement benefits" rather than the more complicated topics of Social Security Disability (SSD) and Supplement Security Income (SSI) benefits.  

A group of us ended the semester with an interesting hypothetical.  Imagine that a retired, older client has a DWI -- his second within some number of years -- involving property damage and, thankfully, no direct endangerment to anyone's life or safety.  Assume a damaged mailbox or telephone pole. The state law might treat that as a misdemeanor, but because it is a second offense, it could still mean substantial jail time.  The client is thinking about pleading guilty, even if the sentence is 60 to 90 days.  The older client might be thinking "the faster I get this over, the faster I can get home and headed back in the right direction with my life."

Do lawyers advise such clients of the potential impact of incarceration, whether in a jail or prison, on his or her right to receive  basic Social Security benefits?  This was a new topic for me and of course that sent me scurrying for information.  Here's what I've read so far:

  • The Social Security Administration has a December 2019 brochure, entitled "What Prisoners Need to Know."  
  • Federal statutory law currently provides, at 42 U.S.C. Section 402(x)(1)(A), that "no monthly benefits shall be paid" to any individual who is "confined in a jail, prison, or other penal institution or correctional facility pursuant to his conviction of a criminal offense" for 30 continuous days or more.  Does this mean the trigger for loss of benefits is 30+ days of confinement for any crime, even a misdemeanor? While a related regulation, at 20 CFR Section 404.468, provides that no monthly benefits shall be paid if the confinement is for a "conviction of a felony," (my emphasis added) it may be that regulation's language reflects pre-1999 statutory law.  See e.g., amendments to Section 402(x) set forth in  P.L. 106-170 (Dec. 17, 1999), 113 Stat. 1860, an act with the ominous name of "Ticket to Work and Work Incentives Improvement Act." 
  • Cases explain that since 1983, the statutory mandate to suspend payments applies to basic retirement benefits, as well as SSD and SSI, and can also trigger a demand for refunds of any SS program funds "overpaid" during confinement, potentially reducing any future benefits the individual would otherwise receive once out of  jail. See e.g., Zipkin v. Heckler, 790 F.2d 16 (2d Cir. 1986). 
  • Attempts to challenge the application of Section 402(x) by arguing the law violates substantive due process, equal protection or is unconstitutional as a bill of attainder or ex post facto law have not met with success.  See e.g., Butler v. Apfel 114 F.3d 622 (9th Cir. 1998).

Back to our hypothetical.  The client might be planning to go home after 30, 60, 90 days or more in jail, but what if the client was depending on SS retirement income -- reflecting his life-time work record -- in order to keep making house payments for that time? 

Originally the theory of suspending federal SS payments focused on "disability" payments, because the confined individuals were being maintained at public expense and their inability to work is a consequence of their criminal conviction, not their disability.  But what of the 1983 amendment, expanding the suspensions to SS retirement income?  In the Zipkin case linked above, at page 18-19, the Second Circuit rejected any distinction:

"We can perceive no reason why prisoners whose retirement benefits are suspended would have a need for replacement of income while prisoners whose disability benefits are suspended do not.  Rather, prisoners, as a group, do not have the need for a continuing source of income that nonprisoners typically may have. . . .  Social Security retirement benefits are designed to satisfy certain baseline economic needs, reasonably predictable when a worker retires. . . . They are not benefits held in trust and payable per se." 

It is a tough world, right?  But does it need to be this tough?  According to the Social Security Administration's recent statistics, among elderly Social Security beneficiaries, "21% of married couples and about 45% of unmarried persons rely on Social Security for 90% or more of their income."  Feel free to add your own thoughts in the "comments."

May 10, 2021 in Crimes, Current Affairs, Ethical Issues, Federal Cases, Federal Statutes/Regulations, Retirement, Social Security, State Cases | Permalink | Comments (0)

Wednesday, May 5, 2021

Gen Xers: Retirement is Coming!

The New York Times ran a story, Generation X, Your AARP Card Awaits.

The skateboarder, wearing a flannel shirt and black sneakers, glides a board plastered with stickers toward a kick-turn in a sun-dappled concrete bowl.

The image might seem like the embodiment of the shredding youth, but something is different. The skater looks noticeably risk-averse, wearing a full ensemble of pads and traveling at a speed not much faster than a grocery cart. With his graying hair and paternal air, he could pass for a clergyman.

Still, he’s out there, doing it. Never say that the Nirvana generation stopped rocking.

The scene is plucked from an AARP television spot to debut during Sunday’s Academy Awards telecast that targets Generation X, .... In addition to Gen Xers, the spot also features a few younger baby boomers, doing tai chi and performing TikTok dances with their children (or perhaps grandchildren). 

The article discusses various characteristics of the Xers and what it might mean as they plan for retirement.

Aging, the great equalizer!

May 5, 2021 in Consumer Information, Current Affairs, Retirement | Permalink | Comments (0)

Thursday, March 18, 2021

California Releases Master Plan FOR Aging

California has released its Master Plan FOR Aging.  Here's the rationale for having a master plan:

Aging is changing and it’s changing California. California’s over-6o population is projected to diversify and grow faster than any other age group. By 2030, 10.8 million Californians will be an older adult, making up one-quarter of the state’s population.

The Master Plan for Aging outlines five bold goals and twenty-three strategies to build a California for All Ages by 2030. It also includes a Data Dashboard on Aging to measure our progress and a Local Playbook to drive partnerships that help us meet these goals together.

This is not a plan simply for today’s older adults. Instead, the Master Plan is a blueprint for aging across the lifespan. The Master Plan calls on all California communities to build a California for All Ages: for older Californians currently living through the many different stages of the second half of life; for younger generations who can expect to live longer lives than their elders; for communities of all ages – family, friends, neighbors, coworkers, and caregivers – surrounding older adults. As Californians, we can create communities where people of all ages and abilities are engaged, valued, and afforded equitable opportunities to thrive as we age, how and where we choose.

The five goals address health, housing, equity and inclusion, affordable aging, and caregiving. The plan is available here.

PHI issued a report regarding the direct care workers and the California Master Plan For Aging. Quality Jobs Are Essential: California’s Direct Care Workforce and the Master Plan for Aging

[P]rovides a detailed overview of the state’s direct care workforce and examines how California’s Master Plan for Aging can improve jobs for this rapidly growing workforce. It describes how the Master Plan supports this workforce, highlights where it incorporated the LTSS Subcommittee’s recommendations, and proposes where and how the Master Plan can be strengthened. This report also includes various stories from direct care workers in the state.

The report is available here for download.

March 18, 2021 in Consumer Information, Current Affairs, Health Care/Long Term Care, Housing, Other, Retirement, State Statutes/Regulations, Statistics | Permalink | Comments (0)

Tuesday, March 9, 2021

Working Past Retirement Age, Because You Want To Do So

Not everyone wants to retire. Some folks continue to work because they need to while others continue to work because they want to do so. The Washington Post addressed this in a recent article,  Don’t want to retire? Here’s how to maintain a fulfilling career into your 80s and beyond. "People age 75 and over, including our fresh-on-the-job president, are the fastest-growing group in the labor force, even though “age discrimination is very real,” said Susan Weinstock, vice president of financial resilience at AARP." The author of the article explores the wellness advantages of continuing to work and reviews the habits of those interviewed for the article:

  1. view work as pleasure
  2. healthy eating and exercise is a must.
  3. Keep stress in check.
  4. Mentor and nurture others, as well as yourself.

Thanks to Professor Naomi Cahn for sending me the link to this article.

 

March 9, 2021 in Consumer Information, Current Affairs, Federal Statutes/Regulations, Health Care/Long Term Care, Other, Retirement | Permalink | Comments (0)

Monday, December 14, 2020

COVID and FInancial Harm

There's absolutely nothing good at all about COVID. I could list a number of ways it has harmed us, beyond health implications, but I just want to share one article with you from the New York Times, Female Workers Could Take Another Pandemic Hit: To Their Retirements.

Now, the pandemic recession is disproportionately damaging the careers of women — so much so that some experts call it a “shecession.”

In November, the national unemployment rate dipped to 6.7 percent from 6.9 percent, the Labor Department reported last week. But the pace of job growth has stalled, and millions have dropped out of the labor market altogether, especially women. One recent study found a disproportionate decline in employment for women of prime working age, 25 to 55, compared with men — and especially so for mothers.

The losses sustained are not just right now-but must be factored over time, including "missed wage growth, retirement savings and Social Security benefits."  Here is a great visual for this: a calculator developed by the center for American Progress.

The article discusses the importance of Social Security and includes info about President-elect Biden's plans for Social Security, which would

award work credit to people who cared for children or other relatives. It would also expand benefits for widows in certain circumstances, and bump up benefits for seniors who had collected payments for 20 years. Finally, it would adopt a new yardstick to determine Social Security’s annual cost-of-living adjustment — the CPI-E, an experimental Labor Department inflation measure designed to more accurately reflect the inflation experienced by seniors, especially health care expenses.

This is a good article-I plan to assign it to my students in the spring.

BTW, a shout out to the health care workers, first responders, essential personnel, everyone, who is keeping us going through this pandemic.  And to the scientists who created the vaccine, THANK YOU!!!!

December 14, 2020 in Consumer Information, Current Affairs, Federal Statutes/Regulations, Other, Retirement, Social Security | Permalink | Comments (0)

Wednesday, November 11, 2020

A Veterans' Low Interest Mortgage Program that Doesn't Quite Add Up?

Today, Veterans' Day, I caught an interesting radio piece on the marketing of supposedly low-interest-rate loans for those who are or have service in U.S. military branches. I've been teaching a Nonprofit Organizations Law course this semester at Dickinson Law, and the lack of transparency in the various loan programs reminded me of a student's presentation about a "veterans' benefit" nonprofit organization that, until recently, seemed to be doing more fundraising for the organizers than for the military service people.  Misuse of "charitable" missions is a topic we explore in the class.

But, I caught the program a second time while driving.  The second time around I realized that the story started with a curious segment with a particular veteran who was describing his recent struggle with a misleading veteran-friendly loan company that charged more, not less, than conventional loans.  This time, I realized the interview included a tour of the older vet's lovely home on the water in Florida, and of his various boats. The borrower was clearly proud, and rightly so, and the interviewer even admitted to a bit of envy.  The loan he was seeking was to refinance about $350k for what seemed to be pretty high-end living and it was easy to be glad the older gentleman has done well in his post-service life. 

The radio interview and the accompanying article at NPR's Morning Edition site described low-interest loans, "backed by the U.S. Department of Veterans Affairs" as a "perk" offered to vets and service members in honor of their service. Wait a minute.  This wasn't a struggling veteran getting started in civilian life, perhaps needing help to buy a first or second home or to fund to start a new business.  This veteran was struggling to find the best terms in a veteran-friendly program -- not to "get" a loan.  

My reaction the second time while listening to the program about misleading loans to veterans was "wouldn't it be better if all consumers could rely on transparency and fairness in lending rates and terms?" 

November 11, 2020 in Consumer Information, Ethical Issues, Federal Statutes/Regulations, Property Management, Retirement, Veterans | Permalink | Comments (0)

Wednesday, November 4, 2020

Two Updates from SSA

Last week I received two emails from SSA that I thought I'd share with you. The first concerned the unveiling of SSA's new electronic Consent Based Social Security Number (SSN) Verification (eCBSV) service.   You might be thinking "say what?"  Well here is the info you need to know, straight from SSA

Our new electronic SSN verification service helps reduce synthetic identity fraud by comparing agency records with data provided electronically by approved participants,” said Andrew Saul, Commissioner of Social Security. “This is an important online service that helps us provide participants and their customers fast, secure, and more efficient SSN verifications.”

Social Security created eCBSV, a fee-based electronic SSN verification service, to allow select financial institutions and service providers, called “permitted entities” and including subsidiaries, affiliates, agents, subcontractors, or assignees of a financial institution, to verify if a person’s SSN, name, and date of birth combination matches Social Security records. Social Security needs the person’s written consent and will accept an electronic signature in order to disclose the SSN verification to the permitted entity. eCBSV returns a match verification of “Yes” or “No.” eCBSV does not verify a person’s identity.

Next, SSA's latest blog post is about Social Security in plain language.

Some of the terms and acronyms people use when they talk about Social Security can be a little confusing. We’re here to help you understand all you need to know.

We strive to explain your benefits using easy-to-understand, plain language. The Plain Writing Act of 2010 requires federal agencies to communicate clearly in a way “the public can understand and use.” This can be particularly challenging when talking about complicated programs like Social Security, Supplemental Security Income, and Medicare. If there’s a technical term or acronym that you don’t know, you can easily find the meaning in our online glossary.

November 4, 2020 in Consumer Information, Current Affairs, Federal Statutes/Regulations, Retirement, Social Security | Permalink | Comments (0)

Friday, October 30, 2020

Legislation to Raise Required Minimum Distribution Age to 75

Last week CNBC ran this story: New retirement bill has perks for seniors, student loan borrowers. Here are the key points from the story

  • A new, bipartisan bill would raise the age for required minimum distributions from accounts like 401(k)s and IRAs to 75, from 72.
  • It would also let workers repaying student loans to get a company 401(k) match even if they’re not saving in their workplace plan.
  • The Securing a Strong Retirement Act of 2020 was proposed Tuesday by Rep. Richard Neal, D-Mass., and Rep. Kevin Brady, R-Texas.

Here's the news story "The legislation, proposed by House lawmakers on Tuesday, raises the age for starting RMD from 72 to 75.  The bill, the Securing a Strong Retirement Act of 2020, is available here.

Thanks to my colleague and friend Professor Feeley for sending me the story.

 

October 30, 2020 in Consumer Information, Current Affairs, Federal Statutes/Regulations, Retirement | Permalink | Comments (1)

Thursday, October 22, 2020

Retirement Post-COVID. A Conversation with Ken Dychtwald

The New York Times recently ran an article, Rethinking Retirement,  that is a conversation with Ken Dychtwald.

When someone retires, three substantial changes take place, said Ken Dychtwald, psychologist, gerontologist and founder and chief executive of Age Wave, a consulting and research company.

“They struggle with their identity, relationships and activity,” he said. “Some people feel unsettled, anxious or even bored, but eventually they realize that relationships, wellness and purpose really matter — perhaps more than ever.”

The reporter asked him if his views of retirement have changed due to his turning 70 and COVID. The short answer-yes. One statement he made resonated with me: "The pandemic this year has given many of us an enormous appreciation for the preciousness of life. I’ve come to realize that I’d like to be useful more than youthful." He notes that many individuals who are retired have made "themselves irrelevant"  while recognizing staying relevant takes time and effort.

He responds to several interesting questions, the last of which is notable

What is the biggest mistake retirees make?

Far too many think far too small. I have asked thousands of people from all walks of life over the years who are nearing retirement what they hope to do in retirement. They tell me: “I want to get some rest, exercise some more, visit with my family, go on a great vacation, read some great books.” Then most stall. Few have taken the time or effort to study the countless possibilities that await them or imagine or explore all of the incredible ways they can spend the next period of their lives.

October 22, 2020 in Consumer Information, Current Affairs, Retirement | Permalink | Comments (0)

Sunday, October 18, 2020

Retiring and Starting a Business for Elders

The New York Times ran a recent story about elders who retired after a long career and then went into business for themselves with elders as their target clients. As They Aged, They Started Businesses for People Like Them, describes these "older entrepreneurs ... [as]  turning their lifelong skills into encore careers selling services and products in the booming senior consumer market. In some cases ... their own experiences become catalysts for career moves at a time when others are retiring."  The article notes the confluence of two factors driving this trend: the "longevity market and the increasing amount of these "later-in-life entrepreneurs."  The article offers some insights regarding the shift to becoming a late-in-life business person and the types of businesses that lend themselves to this model.  Check it out!

October 18, 2020 in Consumer Information, Current Affairs, Other, Retirement | Permalink | Comments (0)

Monday, October 5, 2020

New GAO Report: Retirement Security for Women

The GAO has released a new report, RETIREMENT SECURITY: Older Women Report Facing a Financially Uncertain Future. Here are the highlights:

In all 14 focus groups GAO held with older women, women described some level of anxiety about financial security in retirement. Many expressed concerns about the future of Social Security and Medicare benefits, and the costs of health care and housing. Women in the groups also cited a range of experiences that hindered their retirement security, such as divorce or leaving the workforce before they planned to (see fig.). Women in all 14 focus groups said their lack of personal finance education negatively affected their ability to plan for retirement. Many shared ideas about personal finance education including the view that it should be incorporated into school curriculum starting in kindergarten and continuing through college, and should be available through all phases of life.

Individual women's financial security is also linked to their household where resources may be shared among household members. According to the 2016 Survey of Consumer Finances, among households with older women, about 23 percent of those with white respondents and 40 percent of those with African American respondents fell short of a measure of retirement confidence, indicating their income was not sufficient to maintain their standard of living. The likelihood of a household reporting high retirement confidence rose in certain cases. For example among households of similar wealth, those with greater liquidity in their portfolio and those with defined benefit plan income were more likely to report high retirement confidence.

The full report is available here.

October 5, 2020 in Consumer Information, Current Affairs, Federal Statutes/Regulations, Retirement, Social Security, Statistics | Permalink | Comments (0)

Wednesday, June 3, 2020

National Continuing Care Residents Association Joins Other Senior Living Advocates in Opposing COVID-19 Immunity

On June 1, 2020, the National Continuing Care Residents Association (NaCCRA) released its public statement detailing the organization's opposition to COVID-19 immunity or waivers of liability for nursing homes, adding to the growing chorus of opposition. They explain:  

CCRCs mainly provide three levels of care under one roof or on the same campus, normally comprised of independent living, assisted living, and skilled nursing care -- the latter two considered licensed long-term care facilities.  Our members can reside at various times in any of the three levels of care.  Fore example, one spouse can live independently while the other can live in assisted living or skilled nursing.  There are numerous variations of these living arrangements depending on the level of care required.

 

NaCCRA and its members are very sympathetic to the CCRC managers and front-line care/service workers as they labor during the coronavirus pandemic with its many challenges.  However, residents living and dying, many times alone, in nursing homes or assisted living apartments, should not be deprived of their legal rights or protections even in these most extraordinary times.

 

NaCCRA and its member residents living in continuing care settings are alarmed at the push to grant liability immunity to providers and operators of long-term care facilities in the face of the COVID019 epidemic.  Many states have acquiesced to provider association lobbyists at the expense of residents' legal protections.  NaCCRA believes that long term care providers must not be given a pass on negligence in any form simply due to a pandemic, which makes seniors in such congregate settings even more vulnerable.  

 

Therefore, we strongly oppose the liability waivers for COVID-19 legislated by some states.  WE urge that these be repealed and advocate on immediate moratorium on any future waivers for providers/operators of CCRCs and long-term care facilities.  It is our position that existing laws and negligence standards are more than adequate to protect long term care facilities that are sued if they have followed the proper standards of care and protocols.

My thanks to Jim Haynes, the current president of NaCCRA, for keeping us advised on their position.  

June 3, 2020 in Consumer Information, Current Affairs, Ethical Issues, Federal Cases, Federal Statutes/Regulations, Health Care/Long Term Care, Housing, Retirement, Science, State Cases, State Statutes/Regulations, Statistics | Permalink | Comments (2)

Thursday, May 14, 2020

New Research: How Timing Affects Low-Income and Aged Bill Payers

New research described in the Bulletin on Retirement and Disability published by the National Bureau of Economic Research provides new support for thinking about ways to help maximize use of benefits to pay for core living expenses.  Researchers Lint Barrage (UC Santa Barbara), Ian Chin (Michigan), Eric Chin (Dartmouth),and Justine Hastings (Brown) examine how timing of receipt of Supplemental Nutrition Assistance Program (SNAP) benefits affects a household's ability and success in paying for utilities, such as electric bills.  They observe:

Our results suggest that, for low income households, timing of income from government benefits and the timing of bills due may have long-run consequences. If bills are not received when income is received, households are more likely to miss payments, which may compound into disconnections which may further impact family financial and health outcomes.

 

These results add to a growing literature suggesting that government benefits programs and/or private industry innovate in ways to help low income households balance budgets throughout the month and avoid potential poverty traps. In the case of electricity bills, moving bill receipt to coincide with SNAP benefits receipt could improve repayment rates. This could help low income families avoid poverty traps, but also lower electricity rates for all rate payers in regulated markets, since collection and electricity service disruption are costly and must be covered by regulated electricity rates. Further research is needed to implement and measure the impact of changes in timing of bill receipt through, for example, a randomized controlled trial, and to expand the outcome measures of impact to include measures of financial well being such as credit scores. 

For more, read How Bill Timing Affects Low-Income and Aged Households, NBER RDRC Working Paper 19-09) and the Bulletin summary

Our thanks to George Washington Law Professor Naomi Cahn for this reference.  I suspect that the timing of core household bills and public receipt of pandemic-driven federal stimulus payments would make for another interesting study.  

May 14, 2020 in Consumer Information, Current Affairs, Federal Statutes/Regulations, Housing, Retirement, Social Security, Statistics | Permalink | Comments (0)