A sign that says what's your plan for retirement

Workers Lacking 401ks Need a Solution

Although COVID-19 has exposed alarming gaps in a health insurance system that revolves around the employer, the Affordable Care Act is one potential solution for workers who lack the employer coverage.

There is nothing equivalent on the retirement side, however.

Many workers between ages 50 and 64 are in jobs that provide neither health insurance nor a retirement savings plan. But, in contrast to the health insurance options available to them, “no retirement sav­ing vehicle appears effective in helping older workers in nontraditional jobs set aside money for retirement,” concluded a new analysis of workers in these nontraditional jobs.

Nontraditional workers who want to save for retirement are left with two options: their spouse’s 401(k) savings plan or an IRA operated by a bank, broker or financial firm.

A spouse’s 401(k) hasn’t been an effective fallback for a couple of reasons. First, a substantial number of the workers who lack their own 401(k)s are not married. And second, if they are married to someone with a 401(k), they’re not any better off. The researcher found that married people currently contributing to 401(k)s do not save more to compensate for the spouse without a 401(k), reinforcing other research showing these couples don’t save enough for two.

The other option – an IRA – is open to everyone. But only a small fraction of Americans currently are saving money in IRAs, and most of them already have a 401(k). So IRAs, in practice, aren’t doing much for the people who need the help: workers who lack employer benefits. … Learn More

Street worker working at night

Public-Sector Disability is Fairly Generous

About one in four state and local government employees – some 6.5 million people – do not participate in the Social Security system. They get their disability insurance, as well as their pensions, from their employers.

Whether the coverage is more or less generous than Social Security disability depends on the individual worker’s circumstance and how the state or local employer calculates benefits. But a new study concludes that public-sector workers who have a disability generally receive benefits that are at least as generous as the federal benefits.

To compare them, researchers at the Center for Retirement Research had to construct a database with each state’s and locality’s eligibility requirements and benefit payments. The sample consisted of 67 different disability programs, which cover a majority of the U.S. workers who don’t pay into Social Security.

The main thing Social Security and the public-sector have in common is eligibility – a 35-year-old must have five years of employment to receive federal disability and four to six years under most public-sector programs. One way they differ is that most state and local governments have a more liberal definition of what qualifies as a disability. Social Security pays benefits to a worker who can no longer do any job. Public-sector benefits go to a worker who can’t continue doing his current job.

The disability benefits are also calculated differently. Social Security’s progressive formula is the most generous to low-wage workers, because it replaces a higher percentage of their past earnings. But each state and local government uses the same formula for all of its workers, regardless of their earnings, and the formula gives more credit to employees who have been with their employer the longest.

What does all this add up to? The older public-sector workers, who are most at risk of developing a disability, receive relatively generous protection under the state and local programs, because the eligibility requirements are less strict than Social Security’s and because the benefits for most long-tenured employees replace a higher percentage of their earnings.

Older people who moved into the public sector late in their careers are in a different situation. …Learn More

Lost and Found art

Pension, 401k Registry Bill Resurfaces

When COVID-19 throws people out of work, their chances of retiring comfortably can deteriorate rapidly. What better time to find a new way to help?

A perennial proposal just reintroduced in Congress would do some good: establish an online database of employer retirement plans so workers and retirees can locate old pensions and 401(k) accounts.

Workers are increasingly responsible for making sure they have enough money to retire. But moving from job to job is now the norm – the one-employer career is a distant memory – and pensions get left behind and 401(k)s fall by the wayside. People who try to find old plans often can’t locate employers that have changed names, merged, relocated, or terminated a plan.

The primary way to find retirement plans now is through the lost property records kept by each state. But Anna-Marie Tabor, director of the Pension Action Center in Boston, which recovers lost pensions and 401(k)s for the center’s clients, said billions more in unclaimed funds can’t be located in the state records, because employers are not required to turn over plan information to the states. Also, 401(k)s are hard to find since many employers transfer small accounts to third-party IRAs without the account owner’s awareness.

Tabor argues in the Journal of Aging and Social Policy that the COVID-19 recession brings new urgency to passing the proposed Retirement Savings Lost and Found Act of 2020, especially for low-income workers hit hardest by layoffs and older workers who are running out of time to repair their finances prior to retiring.

“Connecting people with money they’ve already earned is an easy and inexpensive way to support the economic recovery,” she said. …Learn More

Some with Severe Mental Disability Work

Artwork of stairs

People with intellectual disabilities, autism, or schizophrenia have high rates of unemployment. But a new study finds that some can find part-time or even full-time jobs with the help of coaches funded by the government.

Having a coach doesn’t guarantee that a person with a disability will get a job. But in a 2019 study, the people who received this support “were significantly more likely to become employed” than those who did not get the help, according to researchers for the Retirement and Disability Research Consortium.

To get and keep these jobs requires a lot of personal attention. The federal-state Vocational Rehabilitation program provides coaches – often at non-profits – who find the right jobs for their clients and then act as a liaison to smooth out the bumps and guide the employer-employee relationship.

Because the cognitive disabilities of the individuals in the study varied so much, the researchers broke them out into nine groups, based on their specific disabilities, education levels, and likelihood of benefitting from the program. In all but one of the nine groups, the people who received support had significantly higher employment rates than those who did not receive the help.

Between a third and half of the people with coaching support had a job, the researchers found. Among the people who did not receive any support, employment rates were as low as one in four. …Learn More

A teacher and student

COVID: The Challenge for Older Workers

In anticipation of rambunctious children returning to the classroom in the fall, older teachers are sounding alarms about how challenging it will be to make the schools safe for themselves, as well as the children and families.

Their fears about going back to work in a pandemic are shared by older workers around the country with chronic conditions, which increase the mortality rate for people who contract COVID-19.

Workers who cannot work remotleyMore than half of U.S. workers who are between ages 55 and 64 are in jobs that can’t be done remotely, a new study estimates. Their flexibility to work at home isn’t much different than younger adults.

But older Americans who are weighing whether to return to work face a dilemma that is of less concern to young, healthy workers.

The older workers must choose between “health risks – returning to work before the virus is under control – or economic risks – delaying work until the environment is safe, which may exhaust their resources,” concluded researchers at the Center for Retirement Research, which sponsors this blog.

Jobs that can’t be performed at home were identified in the study by 14 specific tasks, ranging from interacting with the public and handling machinery to rarely using email and standing or walking for most of the workday.

By linking information about jobs to individuals in a national survey, the researchers reported on the ability to work remotely based on the characteristics of the workers themselves. They found that women, who often gravitate to jobs that give them more flexibility or the ability to work part-time, are more likely to be in jobs they can do at home – think about travel agents (85 percent are women) and freelance writers (67 percent).

The analysis also confirmed something the media have reported anecdotally: working remotely is a perk of being a well-paid professional. About six in 10 workers in the highest earnings bracket can do their jobs at home, compared with just over three out of 10 workers in the lowest two earnings brackets. …Learn More

Art of people at a job interview

Virus Complicates Boomers’ Job Searches

As laid-off baby boomers venture into the job market in the midst of the COVID-19 pandemic, they may sense it will be tough to find a position because, well, they’re too old.

New research indicates this suspicion is spot-on.

Discrimination is notoriously difficult to corroborate in academic studies. But researchers in Belgium, using a well-designed experiment conducted prior to the pandemic, found that company hiring managers working in 30 developed countries, including the United States, were much less likely to ask older job applicants to even come in for an interview.

The reason? They were perceived as having “lower technological skill, flexibility, and trainability levels,” the study concluded.

But there’s a big disconnect between this evidence of discrimination and a different report, based on a 2019 telephone survey, that employers view workers over age 55 as being at least – and sometimes more – productive than their younger colleagues. This survey also found that older workers are perceived more positively if the hiring manager is older. The findings provide some hope that, as the population ages, baby boomers who want to continue their careers may be able to do so.

However, even the authors of this study acknowledge two issues facing boomers. First, even when employers say they have positive perceptions of older workers, this posture “does not necessarily correspond with employer behavior.”

Second, given older workers’ underlying health conditions, COVID-19 is a wild card that could “adversely affect” their job prospects.

In any case, older job hunters will inevitably encounter some recruiters who will hold age against them. To overcome preconceived notions about older workers, the study of discriminatory recruiters provided some practical tips, based on the findings. …Learn More

Nursing home sign

How COVID-19 Spreads in Nursing Homes

The coronavirus has pulled back the curtain on longstanding problems in nursing homes. In 2014, the Inspector General for the U.S. Department of Health and Human Services had reported that more than one in five seniors in skilled nursing facilities experienced “adverse events.” These included poor medical care, patient neglect, and inadequate infection control, which frequently sent residents to the hospital.

Now, some nursing homes have become COVID-19 hotspots. This has contributed to disproportionate numbers of deaths among people over age 70, who may also have weakened immune systems that make them more susceptible to the virus or underlying medical conditions that increase their mortality rate.  

Anthony Chicotel, a staff attorney with California Advocates for Nursing Home Reform, discussed what he’s seen in nursing homes in the months since the pandemic began.  

Briefly, Tony, name the big three underlying problems you feel caused the virus to spread. 

Chicotel: No. 1 is chronic understaffing to meet the needs of the residents and to perform all the basic functions required every day. No. 2 would be a tolerance for poor infection control practices. This flows from No. 1 because good infection control requires time, and it’s one of the things that gets cut when you’re pressed for time. No. 3 might be the practice of staff working in multiple facilities. Because they are often low-paid, it’s not unusual for them to work for two different companies that do nursing home care, or they might also work for an assisted living provider. This cross-pollination contributes to the spread of the virus among facilities. We’ve also learned that most of the staff who had the coronavirus have been asymptomatic.

The problems in nursing homes are not new?

Chicotel: I think we should’ve anticipated this. Coronavirus has brought all this out into the open but the Centers for Disease Control cites a a pre-pandemic study that found that up to 388,000 nursing home residents die each year resulting from poor control of infections such as Methicillin-resistant bacteria (MRSA) and urinary tract and respiratory infections. We’ve just accepted this staggering breakdown of infection control for a long time. I’m an advocate, and it wasn’t something I really focused on either. It’s been begging to be addressed in a significant way for some time.

Talk about infection control. In this pandemic, everyone is aware that hand washing is critical to stopping the virus. You cited a report by the Centers for Medicare and Medicaid Services (CMS) that 36 percent of long-term care facilities do not comply with hand-washing protocols and 25 percent do not comply with protocols for personal protective equipment (PPE).  Learn More