Reports from Retirement Policy.org

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.

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.

Economists frequently assume that employees “pay for” employer-provided fringe benefits, such as contributions to retirement plans, in the form of reduced wages. This paper challenges these assumptions. Because low-income employees receive little tax benefit from saving in qualified retirement plans, they may not be willing to accept a one dollar reduction in their wage in return for an additional dollar contributed to their 401(k) plan. We find that employers reduce wages of high-income workers by 90 to 99 cents for every dollar contributed to a 401(k) plan, but they reduce wages of low-income workers by only 11 to 29 cents.

Economists frequently assume that employees “pay for” employer-provided fringe benefits, such as contributions to retirement plans, in the form of reduced wages. This paper challenges these assumptions. Because low-income employees receive little tax benefit from saving in qualified retirement plans, they may not be willing to accept a one dollar reduction in their wage in return for an additional dollar contributed to their 401(k) plan. We find that employers reduce wages of high-income workers by 90 to 99 cents for every dollar contributed to a 401(k) plan, but they reduce wages of low-income workers by only 11 to 29 cents.

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 demise of the Community Living Assistance Services and Supports (CLASS) Act, Program on Retirement Policy Director Richard Johnson talks us through ways it could be revitalized, new policies that could boost participation in the private market, and public-private options that could help achieve higher rates of coverage.

In this commentary for New York Times' Room for Debate, Institute fellow Sheila Zedlewski explains that many of the nation's 41 million seniors live in or very near poverty and many have assets mostly tied up in their houses. Policy makers must be ever mindful of that diversity when considering changes in policy that would affect retirement income security.

It appears the Obama administration is abandoning the Community Living Assistance Services and Supports (CLASS) Act, a program included in the Affordable Care Act that aimed to make long-term health care more affordable and accessible for most Americans. In this first video in a two-part Urban Institute package, Program on Retirement Policy Director Richard Johnson walks us through CLASS's aims and design, why greater access to long-term care is needed, and where the program ran into problems.