Retirement/Pensions

Amid much conversation about the future of Social Security, personal retirement savings are becoming more critical than ever before. Many employers contribute to their workers' retirement savings, but who benefits most from this and how much do these people lose in wages as a result of these contributions? Karen Smith, a senior research associate at the Urban Institute's Program on Retirement Policy, talks about employer contributions to retirement savings, who benefits most, and who loses the most wages in return for retirement contributions.

The lackluster economy, eroding traditional pensions, and volatile stock market suggest that baby boomers - those born between 1945 and 1965 - face increasingly uncertain retirements. Our projections show that lower - and moderate-income boomers will continue to rely on Social Security for most of their retirement income. While the projections reflect some good news - women will reap the rewards of working and earning more than previous generations - they also raise alarms. Between 30 and 40 percent of boomers will not have enough income at age 70 to replace 75 percent of their preretirement earnings, a common standard for measuring retirement income adequacy.

The recession has increased joblessness among older Americans. These graphs and tables report unemployment rates and how they have varied by age, sex, race, and education since 2007.

This report describes the work the Urban Institute performed to generate the Model of Income in the Near Term, Version 6 (MINT6). MINT is a tool developed for the Social Security Administration (SSA) to analyze the distributional consequences of Social Security reform proposals. MINT is a micro-level data file of individuals born between 1926 and 2075. It starts with a rich set of income and demographic characteristics from the 2001 and 2004 Survey of Income and Program Participation (SIPP) data linked to SSA data on earnings and benefits. MINT then projects these characteristics until death or the year 2099.

The retirement savings of American households took a big hit when the stock market crashed in 2008. Recently, however, a good portion of these losses has been reversed. This fact sheet follows trends in retirement account balances since the beginning of 2005.

A little more than a year ago, the National Commission on Fiscal Responsibility and Reform produced a report that proposed restructuring Social Security. However, the commission failed to get the supermajority needed to recommend the plan to Congress. While some in the media and on the political scene called the report a useful starting point, no action was taken to reshape Social Security in 2011. With presidential and congressional elections coming in November, the topic is sure to heat back up. This video features Melissa Favreault, a senior fellow at the Urban Institute's Program on Retirement Policy, discussing the ways the Bowles-Simpson plan would change Social Security, who would be affected the most, and what the timeframe is for taking action.

Using the Dynamic Simulation of Income Model, we project how Social Security benefits and payroll taxes would change were Congress to enact the National Commission on Fiscal Responsibility and Reform’s proposal. We show benefits at several points in time and relative to pre-retirement income, a low-income standard, and lifetime payroll tax contributions. The proposal’s projected effects are particularly deep relative to current law scheduled for those reaching retirement in several decades. Projected benefit reductions relate closely to lifetime earnings: Lower earners are largely shielded, higher earners face significant reductions. Projections are sensitive to workers’ assumed responses to certain proposal provisions.

With the CLASS Act dead, the 7 in 10 seniors who will eventually need help with eating, dressing, or bathing, and their unpaid family caregivers are wondering where they can go from here. Many relatives of the aging struggle to balance their elder care duties with employment and other family responsibilities. The care they provide equates to $375 billion a year.

Nursing home care averages about $75,000 per year (and much more in certain parts of the country), while home health aides cost about $21 per hour. Options for financing long-term care are limited. Medicare covers long-term care only under certain conditions and for only a limited time. Only 12 percent of adults age 65 or older have private insurance. As a result, many families pay out of pocket until they exhaust their resources and turn to Medicaid.