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Publications by Barbara Butrica for Retirement Policy

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More about Barbara Butrica's areas of expertise can be found on this Urban Institute expert's page.

Low-wage workers find it difficult to save for retirement. Without savings, they will have to rely on Social Security and pensions. Yet these income sources are based on earnings, which means that low-wage workers will have lower Social Security and pension benefits than higher-wage workers. This brief assesses whether boomers with low earnings between ages 22 and 62 are destined for low income at age 67. We find that nearly two-thirds of this group will end up with low income at retirement, but more than one-third will manage to defy the odds and escape being among the lowest-income older Americans.

This study uses the Urban Institute's DYNASIM model to project wealth and income at retirement for low-income boomers. The findings suggest that most with low lifetime earnings will also have low incomes at older ages unless they either continue working or move in with others who help support them financially. Saving more, working more consistently over their lifetime, and delaying retirement is projected to improve outcomes for low-earning boomers, but none of these actions will increase retirement living standards dramatically.

The Census Bureau’s official poverty measure no longer reflects the true resources or needs of adults age 65 and older. Recent consumption data show that older adults generally require more to cover their basic needs and economic data show that older adults have more resources than are reflected in the official poverty measure. This paper shows the sensitivity of poverty rates for older adults to alternative measures of consumption needs and income resources. The alternative measures all show that number of older adults living in poverty is greater than the official measure indicates.

People think of retirement security as balancing on a three-legged stool, with income from assets, private pensions, and Social Security as the legs. However, despite growing awareness about the importance of saving for retirement, many elderly people cannot rely on their financial assets. According to data from the 2004 Health and Retirement Study, lower-income adults age 65 and older rely less on income from assets and traditional defined-benefit pensions than their higher-income counterparts. Instead, older adults with lower income rely primarily on Social Security and public transfers for their retirement security.

Income tax provisions affect the buildup of retirement assets during workers' careers and after-tax income following retirement. This paper uses the Urban Institute's DYNASIM model to simulate how potential changes in the tax treatment of retirement saving, Social Security benefits, and income from assets outside retirement accounts may affect boomers' retirement incomes. Changes in the income thresholds for taxing Social Security benefits have the largest impact on middle-income boomers, while changes in contribution limits for retirement saving plans and tax rates on capital gains and dividends have the largest impact on the highest-income boomers.

This paper uses data from the 2004 Health and Retirement Study to demonstrate how the poverty rate of adults 65 and older changes using alternative resource and threshold measures. Results show that alternative poverty measures that account for health spending produce higher poverty rates than the official measure, even those that include the value of housing and financial assets. Poverty remains concentrated among singles (disproportionately women), blacks and Hispanics, and adults 85 and older regardless of how it is measured because these populations have relatively little housing equity or financial assets.

According to the federal government, elderly poverty rates among blacks are nearly triple and among Hispanics are more than double those of whites. Data from the 2004 Health and Retirement Study on adults age 65 and older, living alone or with only a spouse, show how assets, which are excluded from the official poverty measure, change elderly poverty overall and between racial/ethnic groups. Adding imputed housing rent and annuitized asset values to resources reduced overall poverty by 1.8 percentage points, but increased racial disparities because blacks and Hispanics have relatively little housing equity or financial assets.

The boomers' impending retirement has spurred interest in tapping their productive energies to benefit society. This study examines older adults' decisions to stop or start formal volunteer work. The findings show that older adults usually stick with their original decisions, but more often stop than start volunteering. Volunteers who contribute a lot of hours over many years and who are married to volunteers are less likely to quit. And nonvolunteers are more likely to start volunteering if they have been uninvolved for few years and their spouses volunteer. The results highlight the importance of volunteer retention strategies for nonprofit agencies.

As the nation ages, older adults' volunteer activities are becoming increasingly important This study uses longitudinal data from a nationally representative survey to examine entries into and exits from volunteer activities by adults age 55 to 65. The findings reveal considerable persistence among both volunteers and nonvolunteers; however, older adults are more likely to stop volunteering than to start. Duration and intensity of volunteering, as well as marriage to a volunteer, are strong predictors of continued volunteer activities. And, the time spent away from volunteer activities, as well as marriage to a nonvolunteer decreases the odds of volunteer starts.

Staying engaged in work and formal volunteer activities at older ages significantly benefits the well-being of the volunteers, the organizations that count on them, the people served by those organizations, and the economy. This study, based on data from the Health and Retirement Survey, shows that over 10 million healthy older adults with no caregiving responsibilities did not work or volunteer in 2004. About half of these able seniors are under age 75 and 9 out of 10 have prior work experience. Given this untapped potential, shortages of volunteers and workers should prompt employers and nonprofits to court this talent.

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