August 2015

This Retiree Is a Lucky Dog

It would be even tougher for Sher Polvinale to get by solely on her late husband’s Social Security check of $1,700 per month if he had not bought a life insurance policy that has paid off their house.

Despite her meager financial circumstances, Polvinale’s retirement is rich in rewards.

This 69-year-old former payroll administrator for a construction company said she brings in $200,000 in annual donations for her non-profit, which cares for old, unwanted dogs that need expensive medical care and attention. One can’t help thinking, while watching the National Geographic video below about the retired dog sanctuary in her home, that many elderly people would be lucky to have such a place to live out their final years.

For financial or lifestyle reasons, not everyone settles into a full-blown retirement. Some people refuse to retire altogether, while others try out retirement only to resume working, perhaps in a part-time position. Polvinale’s is one of the myriad stories of how individuals adapt and recreate their lives as they ease into old age and detach from the hard-charging work world.

“I’m kind of an odd person,” said Polvinale, explaining what motivated her to establish the non-profit in 2006. She recalls telling her husband, Joe, who would die in 2008, “I can’t agonize over whether people are going to love their dog until the end of its life. I want to keep them until they die. That’s selfish but I want to know that they’re safe and loved for the rest of their lives.” …Learn More

Workplace Benefit Inequality

Inequality goes beyond the wealth and income disparities that frequently make it into today’s headlines. Employer benefits also flow more freely to people at the top.

The newly released survey of employers by the U.S. Bureau of Labor shows how stark the differences are.

The charts below compare the share of private-sector workers in the lowest income bracket who receive benefits – their earnings are in the bottom 25 percent of all U.S. workers’ earnings – with the share in the top 25 percent. Four benefits are compared: health insurance, the percent of health premiums paid by employers, paid sick leave, and – since it’s August – paid vacations.

BLS_2_Health
 
 
 
 
 
 
 
 
 
 
 
For the other charts, click here.Learn More

the end

Paying Extra on College Debt Has Wallop

One-third of 18-24 year olds in a new Allstate poll said the best use of their extra funds is getting their college or other debts off their backs. For those considering making larger payments, a loan amortization table demonstrates the impact.

Paying down debt is just another form of saving, and larger loan payments significantly shorten the time it takes to pay it off, while reducing the total interest paid. Start with the $5,000 loan example already loaded into a Bankrate.com student loan amortization calculator:

  • Paying $96.66 per month on a $5,000 student loan with 6 percent interest eliminates it in five years. An extra $50 every month – a couple of nights out – knocks two years off the payment time. This can be seen by entering $50 in the top box under the “Extra payments” heading in the calculator and clicking “Show/Calculate Amortization Table.” …

Learn More

Illustration of the future

The Future of Retirement Is Now

Gray, small, and distinctly female.

This is what the director of MIT’s AgeLab, Joseph Coughlin, sees when he peers into the future of retirement.

“The context and definition of retirement is changing,” Coughlin said earlier this month at the Retirement Research Consortium meeting, where nearly two dozen researchers also presented their Consortium-funded work on a range of retirement topics. Their research summaries can be found at this link to the Center for Retirement Research, which supports this blog and is a consortium member.

Coughlin spooled out a list of stunning facts to impress on his audience the dramatic impact of rising longevity and graying populations in the developed world, and he urged them to think in fresh ways about retirement. In Japan, for example, adult diapers are outselling baby diapers. China already faces a looming worker shortage, and Germany’s population is in sharp decline. In 2047, there will be more Americans over age 60 than children under 15.

“The country will have the demographics of Florida,” Coughlin said. …Learn More

Retirement: a Priority for Millennials?

Saving for retirement is more crucial for Millennials than for any prior generation. Data are emerging that reveal how they’re doing.

millennialsVanguard’s 2014 data from its large 401(k) client base shows that 67 percent of young adults between 25 and 34 who are covered by an employer plan are saving – this is well above a decade ago.

A survey recently by the Transamerica Center for Retirement Studies found evidence that this generation makes retirement a priority: a majority of working adults in their 20s and early 30s – now the largest single demographic group in the U.S. labor force – view retirement benefits as “a major factor in their decision on whether to accept a future job offer.”

This indicates that Millennials are getting the message, said Catherine Collinson, president of the Transamerica Center for Retirement Studies.

The growth of automatic enrollment in 401(k) plans “has helped pull young people and non-participants into the plans,” Collinson said, “but I also believe it’s also due to heightened levels of awareness.” …Learn More

Illustration

Medicare Primer: Advantage or Medigap?

Traditional Medicare with a Medigap plan or Medicare Advantage? My Aunt Carol in Orlando wrestled with this decision for some five hours in sessions with her Medicare adviser, which she followed up with multiple phone calls – and a raft of additional questions.

“You have to ask these questions. You really have to think about it,” she said. “It’s confusing.”

Essentially every 65-year-old American enrolls in Medicare, and many get additional coverage. One form of additional coverage is through supplements to traditional Medicare, which include a Part D prescription drug plan and/or a Medigap private insurance plan to cover some or all of Medicare’s co-payments, deductibles, and other out-of-pocket costs. The other is through Medicare Advantage, a managed care option that typically provides prescription drug coverage and other services not included in the basic Medicare program.

So which to choose? Consumer choices have proliferated since private plans were added to Medicare 40 years ago. The typical beneficiary today has about 18 Medicare Advantage options, a multitude of Medigap plans for people who choose the traditional route, and 31 prescription drug programs, according to the Kaiser Family Foundation.

This primer is for new enrollees like my aunt. A future blog will provide suggestions from leading Medicare experts about ways to think about this important decision and the financial issues at stake.

The following compares the primary advantages and disadvantages of traditional Medicare and Medicare Advantage plans. But everyone is unique, and it’s impossible to simplify a process that requires each individual to research his or her best options, based on the severity of their health issues, their preferences and financial situation, and the policies available in their state’s insurance market. …Learn More

Skyline of DC

Retirement Researchers Convene Today

Why do older workers retire before they’d planned? How has the Affordable Care Act affected retirees in particular? And what’s known about U.S. immigrants’ wealth levels and Social Security contributions?

Researchers from around the country will present their findings on these and a range of other retirement topics during the 17th annual meeting of the Retirement Research Consortium, starting today at the National Press Club in Washington, D.C.

For the meeting agenda, click here.

The Consortium’s members are the Center for Retirement Research at Boston College (which supports this blog), the NBER Retirement Research Center, and the University of Michigan Retirement Research Center. The studies being presented are all funded by the U.S. Social Security Administration through the Consortium’s members.Learn More

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