As life expectancies grow, so do the number of studies exploring the options for older workers, social security, and retirement. One such study, from the University of Michigan, looks at the idea of eliminating social security payroll taxes for workers over the age of 55 in order to encourage them to continue working rather than opting for retirement. The research found that workers would receive a 10.6 percent increase in their take-home pay and would choose to stay on the job an additional year and a half to take advantage of the extra income. Rewarding older workers would benefit seniors as they financially prepare for retirement but would also be good for the economy as a whole. The study used data from the University of Michigan’s institute for Social Research and the Consumer Expenditure Survey conducted by the U.S. Bureau of Labor Statistics. More here and here.
A recently released breakdown of Social Security benefits found that 36 percent of recipients aren’t retired workers but, instead, are children, the disabled, and spouses and survivors of workers. Altogether, nearly one in every six Americans is getting a Social Security benefit, equaling approximately 59.2 million beneficiaries in 2010. But though a large percentage of beneficiaries aren’t retired workers, retirees rely most heavily on the program for income. According to data from 2009, Social Security provided at least half of the income for 66 percent of seniors receiving benefits. Also, the average age of disabled-worker beneficiaries was 52.8 percent in 2010. More here.
Economic security is an important part of any retirement plan. And, for most of us, our home is among our most valuable assets. But, according to a new analysis from the AARP’s Public Policy Institute, approximately 600,000 Americans over the age of 50 are in foreclosure and about 625,000 are at least three months behind on their mortgage. The study, which looked at national loan-level data for the years 2007 to 2011, found that more than 1.5 million older Americans lost their homes during the financial crisis. And, though there’s a perception that seniors enjoy more economic security than other age groups, the study found that nearly one in 30 Americans over the age of 75 were facing foreclosure. The results of the study highlight the need for more creative policy solutions to the foreclosure crisis and more focus on the needs of older Americans. More here and here.
According to Census projections, the number of Americans over the age of 85 is set to rise to 19 million by 2050. By comparison, there were only 3 million Americans older than 85 in 1990. A large part of that increase are the approximately 78 million baby boomers now approaching their retirement years. But with increasing life expectancies and dwindling government resources, today’s seniors face the risk of an uncertain financial future. A recent Gallup poll shows that a rising number of Americans say they expect to rely heavily on social security as a source of retirement income. But as people live longer, the likelihood that they’ll require costly medical care or assistance increases. The struggle to pay for the healthcare needs of an aging American population highlights the need for a proper retirement plan that goes beyond social security and accounts for increasing life spans. More here and here.
The Employee Benefit Research Institute’s annual retirement confidence survey finds Americans once again expressing concern about their ability to afford retirement. Among respondents, only 14 percent say they are very confident they’ll have enough money to live comfortably in retirement. Medical expenses and long-term care costs remain among their chief concerns, ranking far below their confidence in their ability to pay basic expenses. And though current retirees express a higher level of confidence than current workers, retirees also say they are significantly more reliant on social security as a major source of income than workers expect to be. Also in the report, the number of workers who said they expect to retire after age 65 has risen to 37 percent, up from 11 percent in 1991. And 60 percent of workers say the total amount of their household’s savings and investments, excluding the value of their primary home, is less than $25,000. More here.
The first increase in monthly social security and supplemental security income benefits since 2009 takes effect this year. The cost-of-living adjustment automatically raises benefits based on increases in the Consumer Price Index as measured during the third quarter of each year. If prices rise, so do payments. If prices fall, benefits remain the same. In 2009, payments increased 5.8 percent based on spikes in energy prices. The past two years, however, payments remained flat due to low inflation. The 3.6 percent increase for 2012 means nearly 60 million social-security recipients will get an average of an additional $467 this year. More here.
Though more seniors are aware of the costs associated with living longer than in past years, a recent survey found just 45 percent knew they’d need nearly 90 percent of their pre-retirement income to maintain their standard of living and 45 percent said they’d likely end up working longer than planned. Still, the number of respondents who were aware of the cost of living longer rose to 62 percent from 56 percent in 2008 and 23 percent in 2003. A majority of seniors were unaware of the financial tools available to them, including long-term care insurance, reverse mortgages, and delaying social security. A quarter of respondents were familiar with reverse mortgages, though 42 percent of surveyed Americans believe health insurance or Medicare will cover the price of long-term care. More here.
A poll of 1,800 seniors and their adult children conducted on behalf of the National Reverse Mortgage Lenders Association found that more than 80 percent of respondents said they’d prefer to stay in their own homes throughout their retirement years but nearly 20 percent feared, without additional income, they’d have to give up their house. Peter Bell, president of the NRMLA, said without increased social security benefits, seniors would have to rely on their own personal resources, including home equity, for retirement funding. According to the survey, 74 percent of seniors who used reverse mortgages as part of their retirement strategy described their experience as positive. And due to the current economic climate and concerns about covering monthly expenses, seniors and their children agreed that the wisest financial strategy was to use income and assets to cover living costs rather than save for an inheritance. More here.
Senior citizens are a favorite target of identity thieves largely because they have more money and tend to be less technologically savvy. They also are more likely to have a false sense of security due to the fact that they use less credit and aren’t typically sharing identifying information online. But anyone with a social-security number is at risk of fraud and, because many states display social-security numbers on medicare cards and personally identifying information can be exposed through caregiver networks, nursing homes, and doctor’s offices, seniors should take steps to protect themselves from fraud. To better protect yourself, never carry your social security card with you, lock up financial statements, pick up checks at your bank to avoid having them stolen from your mailbox, and don’t mail bills or identifying documents from your home mailbox. More tips here.
