Research by Author & Topic

Publications by Sheila R. Zedlewski on Retirement/Pensions

Americans save for retirement by building wealth in personal accounts, home equity, pension plans, retirement accounts and Social Security. We use data from the Survey of Consumer Finances (SCF) and methods to estimate the wealth values of Social Security and pension plans to show how wealth builds over the life cycle. We find that the typical household accrues wealth throughout the life cycle. Households in the bottom income quintile, those that did not complete high school and minorities accumulate much less wealth than their counterparts, and Social Security accounts for a large share of their preretirement wealth.

The slumping stock market, falling housing prices, and weakening economy have serious repercussions for older Americans who are approaching retirement or already retired. Seniors have little time to recoup the values of their homes, 401(k) plans, and individual retirement accounts-all important parts of their retirement nest eggs. More and more older adults are working to bolster their retirement incomes, but the rising unemployment rate limits their prospects. This fact sheet examines the impact of the ongoing economic turmoil on retirement savings, home values, and retirement decisions.

Retirees who want to stay in their homes can tap into home equity through a reverse annuity mortgage that pays them a tax-free monthly payment. We show that conversion of home equity into a reliable income stream could provide a significant boost in retirement income, particularly for low-income homeowners with significant equity. The cost of initiating a RAM, however, and many older adults' concerns about borrowing against this asset have limited interest in RAMs. Recent turmoil in the mortgage market and declines in home prices raise additional uncertainties about the potential for using home equity to boost retirement incomes.

The job characteristics and attitudes of adult workers age 65 and older reveal a group enjoying work and not anxious to leave the labor market. The fact that many of these workers are self-employed and working part time at jobs with relatively limited physical demands may help to explain their satisfaction with work. Older workers in all wealth groups share these positive attitudes about work. The results suggest work situations pleasing to older adults that could be emulated by other employers and encouraged by public policies with the ultimate goal of increasing health and financial well being of older Americans.

This project explores distributional consequences of Plan 2 of the President's Commission to Strengthen Social Security using dynamic microsimulation. This plan includes: voluntary personal account "carve outs," minimum benefits, widow(er)s benefit increases, and initial benefit formula shifts (from wage- to price-indexing). The analysis develops a baseline using Office of the Chief Actuary assumptions regarding portfolio allocation, rates of return, administrative costs, and annuitization. We compare results with promised benefits and current-law adjusted to match costs of the baseline without accounts. We test the estimates' sensitivity to assumptions using historical data, values from the literature, and models estimated from SCF data.

Health insurance coverage can be a significant factor in determining older individuals' economic and health security. This report uses data from the first two waves of the Health and Retirement Survey to examine the health insurance transitions of two groups: those who moved into retirement between 1992 and 1994 and those who were already retired in both years.