Posts Tagged "Social Security"

medication

Opioid Use Higher for Disability Applicants

With the nation still in the midst of an opioid crisis, a new study provides the first estimate of opioid use among people who apply for disability.

One out of every four applicants used opioids in 2017 – below the peak in 2012 but still significantly more than in the general population, according to researchers at Mathematica and the U.S. Social Security Administration.

And the researchers may be underestimating the extent of opioid use. Their data come from Social Security’s disability application forms. The forms ask applicants to list their prescriptions, including opioids taken for musculoskeletal pain such as a bad back, as well as their non-prescription drug use, and the stigma around use and abuse may encourage underreporting.

To estimate opioid use required creating a database because none existed. The researchers mined the text fields in each disability application using machine learning to find information about opioid use and then entered the information into the database.

Some interesting demographic trends emerged from the study. Opioid use is most prevalent in middle age, at around 30 percent of disability applicants in their 40s and 50s. “This is notable,” the researchers said, because if Social Security grants their requests for benefits, they “may remain on the [disability rolls] for 25 years.”

In a breakdown by education levels, the biggest opioid users had attended college but didn’t get a degree. Women’s use exceeded men’s throughout the study’s 10-year period, mirroring the population as a whole. And a state-by-state breakdown shows that applicants’ opioid use fell across the nation during that time. But Alabama, Arkansas, Michigan, and Nevada still had particularly high rates in 2017. …Learn More

Elderly couple at a window

Retirement Researchers to Meet Aug. 5-6

The pandemic will be on the marquee at this year’s annual meeting of retirement and disability researchers.

COVID-19 has encroached on every aspect of older Americans’ lives, from their day-to-day work and home life to their retirement planning. Researchers will present studies on three impacts of the pandemic in presentations funded by the U.S. Social Security Administration.

The event will be held over two days, Thursday and Friday, Aug. 5 and 6, from noon to 4 p.m. The event will be virtual again this year and anyone can sign up to attend for free.

The first study on the agenda will explore the pandemic’s impact on older workers’ ability or willingness to work and on their retirement decisions. And for the adults who lost their jobs during COVID-19’s economic downturn, a second study will explain whether the slump will affect their future Social Security benefits. In the final study relating to the pandemic, researchers will assess whether the relief bills passed by Congress helped older people.

Other prominent topics of discussion include retirement planning and retirees’ financial security. These will include new findings on workers’ decisions about saving, retirees’ decisions about spending, and the financial adjustments couples make after their children leave home.

The final major topic is federal benefits for people with disabilities. The presentations here include the relationship between the benefits and two government programs: food stamps and workers compensation insurance.

Summaries of the working papers will be posted online for the meetings. …Learn More

No-Benefit Jobs Better than Retiring Early

Woman in taxiMany workers in their 60s lose some of their stamina. Either their bodies start showing signs of wear, or they don’t tolerate on-the-job stress like they used to.

People who find themselves in this situation but can’t afford to retire will appreciate the findings in a recent study: older workers who transition to a new job – and perhaps a less demanding one – have greatly improved their retirement finances, even if the new job lacks health and retirement benefits.

The starting point for the analysis was to identify 61- and 62-year-olds employed in career jobs and follow the changes in their retirement finances over time, as they break into three groups. Some retired, some remained in longstanding jobs with benefits, and some found no-benefit jobs, whether with an employer or as an independent contractor.

Matt Rutledge and Gal Wettstein at the Center for Retirement Research compared each group’s retirement prospects in their early 60s with where they ended up years later, after the majority of them had retired. The focus was on the people who, at 62, were falling short of what they would need to retire comfortably.

The financial assessments were based on so-called replacement rates – estimated retirement income as a percentage of employment earnings. The average target required for financial security in old age is about 75 percent of past earnings, though the precise number depends on how much the individual earned.

The researchers estimated replacement rates for the 62-year-olds who fell short of the targets and estimated the rates again when they were 67 or 68. Retirement security improved over time for the under-prepared people who continued to work – in contrast to an erosion in security for the people who, despite falling short, had retired at 62 and locked in a small Social Security check.

The most interesting finding concerned the older workers who had extended their employment by switching to no-benefit jobs. Their retirement income in their late 60s replaced 68 percent of their past earnings, on average – still less than what they need but up dramatically from 52 percent if they had retired early. …Learn More

Nearly Half on Disability Want to Work

people on disability want to workAn unfortunate misperception about people on federal disability is that they’re not interested in working. In fact, nearly half of them want to work or expect to go back to work, and that share has been rising.

But getting or keeping a job has proved difficult, and the employment rate is very low for people who get Social Security disability benefits – or cash assistance from a companion program, Supplemental Security Income (SSI). Yet the vast majority of beneficiaries have past work experience that should help them in the job market.

Researchers at Mathematica mined a survey of people on disability for clues about how to help them find a job or promotion or learn a new skill.

Many of these work-oriented individuals are under extreme financial pressures and are also younger and healthier, despite their disabilities, than the people on disability who didn’t express a desire to work.

Yet only a third of the 2.6 million beneficiaries in the new study who say they want to work are either working now, were recently employed, or are looking for a job.

So, if they are willing to work and feel able to work, why are so few of them in the labor force?

The researchers landed on two big reasons. First, the work-oriented individuals, despite their desire to work, said they can’t find a job. This is a common experience because employers are either reluctant to hire people with disabilities or the available jobs don’t accommodate them. Others are hesitant to try the job market again because they feel discouraged by past employment experiences.

Second, the majority of work-oriented beneficiaries are unaware of federal programs designed to support a return to work or connect them with employers. …Learn More

Minimum Wage and Disability Applications

Maid in hotel corridor

Do applications for federal disability benefits rise, fall, or remain unchanged when the minimum wage increases?

Understanding whether the minimum wage affects disability applications is an important issue as Congress debates an increase in the federal minimum and the states have been very active: 14 states began last year with a higher minimum wage after passing new legislation or ballot initiatives. Another seven states had previously enacted automatic yearly increases in their minimums.

One possibility considered in a new study is that applications to the U.S. Social Security Administration for disability benefits could decline if wages increase enough to make a steady paycheck that much more appealing than a modest monthly disability check. But Syracuse University economist Gary Engelhardt finds that hiking the minimum wage did not reduce applications from 2002 through 2017.

Since applications didn’t go down, could a higher minimum wage increase applications instead? Some economists argue that employers, when faced with a higher mandatory wage, may lay off some of their less-skilled hourly employees or cut back their hours. This might – indirectly – be a motivation to apply for disability.

Engelhardt tested this idea in a second analysis, recognizing that it takes time for employers to make staffing changes in response to a higher wage. Once again, he found no impact on disability applications.

“Changes in the minimum wage are not moving individuals on and off” of disability, the researcher concluded. 

To read this study, authored by Gary Engelhardt, see “The Impact of the Minimum Wage on DI Participation.” Learn More

colorful arrows

What the Research Can Tell us about Retiring

It’s difficult to envision what life will look like on the other side of the consequential decision to retire.

But research can help demystify what lies ahead – about the decision itself, the financial challenges, and even the taxes. Readers understand this, as evidenced by the most popular blog posts in the first three months of the year.

Here are the highlights:

The retirement decision. The article, “Retirement Ages Geared to Life Expectancy,” attracted the most reader traffic. Myriad considerations go into a decision to retire. But a sense of whether one might live a long time – because of good health or simply seeing that parents or neighbors are living unusually long – is a compelling reason to postpone retirement either to remain active or to build up one’s finances to fund a longer retirement.

A recent study found that as men’s life spans have increased, they have responded by remaining in the labor force longer, especially in areas of the country with strong job markets and more opportunity. This is also true, though to a lesser extent, for working women.

The planning. The second most popular blog was, “Big Picture Helps with Retirement Finances.” It described the success researchers have had with an online tool they designed, which shows older workers the impact on their retirement income of various decisions. When participants in the experiment selected when to start Social Security or how to withdraw 401(k) funds, the tool estimated their total retirement income. If they changed their minds, the income estimate would change.

The tool isn’t sold commercially. But it’s encouraging that researchers are looking for real-world solutions to the financial planning problem, since the insights from experiments like these often make their way into the online tools that are available to everyone.

The taxes. It’s common for a worker’s income to drop after retiring. So the good news shouldn’t be surprising in a study highlighted in a recent blog, “How Much Will Your Retirement Taxes Be?” Four out of five retired households pay little or no federal and state income taxes, the researchers found. But taxes are an important consideration for retirees who have saved substantial sums. …Learn More

UK Pension Reforms Show Some Promise

woman in the UK on her phone

Unlike the United States, the United Kingdom has implemented bold reforms to its retirement system over the past decade.

Two of the biggest changes were gradual increases in the minimum age for collecting a pension under the national social security program and requiring private employers to automatically enroll their workers in an employee savings plan.

The goals of the reforms were to keep government spending in check and encourage individuals – who are living longer – to work longer, while helping them build up more private savings through employer-based plans. On balance, the notion is that workers will end up better prepared financially when they retire. Time will tell how successful these reforms will ultimately be.

But, so far, the results have been somewhat promising, concludes an Institute of Fiscal Studies report on workers’ changing expectations and attitudes about their retirement prospects.

In a major reform to private-sector plans, lawmakers started expanding coverage in 2012 by requiring that employers – the largest ones were first –  automatically enroll workers earning more than £10,000 (about $14,000) in a retirement savings plan. The total contributions to the plans must now be at least 8 percent of each worker’s earnings, with employers providing at least 3 percent.

This reform seems to have enhanced workers’ sense of financial security. In 2017, 78 percent said in a survey that they expect to get some retirement income from an employer savings plan – up from 63 percent in 2013. And while workers are permitted to opt out of the plans, they are doing so at consistently low rates.

On the retirement front, the minimum age to collect benefits under the U.K. social security system, the National Insurance Scheme, has risen dramatically for women. A decade ago, they could collect a pension at 60, but that had increased to 66 by last year. They are now in line with men, whose minimum age was 65 for many years and also rose to 66 last year. In the future, the increases are expected to continue: a 50-year-old worker would not be able to collect his pension until he is 68. …Learn More