Category Archives: Older People

Senior Tax Breaks on the Move—but Are Seniors Actually Moving?

Source: Karen Smith Conway, University of New Hampshire, Carsey School of Public Policy, National Issue Brief #120, Spring 2017

From the press release:
Existing state income tax breaks for the elderly result in non-trivial reductions in state revenue and offer little relief to the most vulnerable elderly, according to new research released by the Carsey School of Public Policy at the University of New Hampshire.

The research also found that these tax breaks are unlikely to pay for themselves because they are not attracting significant numbers of retirees into the state or discouraging existing residents from leaving. In addition, proposed additional tax benefits would benefit high-income elderly households. Existing breaks primarily benefit middle and high income elderly households.

“If state policy makers really want to help the poorest elderly households they should consider extending the refundable earned income tax credit to those over age 65 or enacting some other kind of refundable low-income tax credit so that the household could actually receive a payment from the government,” said Karen Smith Conway, professor of economics and a fellow at the Carsey School.

Conway also noted that the lost tax revenue must be paid for in some way, presumably through cuts to spending — spending that could help the needy elderly or improve economic growth – or through increases in other taxes and fees.

Baby boomers in the United States: Factors associated with working longer and delaying retirement

Source: Xiuwen Sue Dong, Xuanwen Wang, Knut Ringen and Rosemary Sokas, American Journal of Industrial Medicine, Volume 60, Issue 4, April 2017
(subscription required)

From the abstract:
Objectives: This study estimated the self-reported probability of working full-time past age 62 (P62) or age 65 (P65) among four cohorts of Americans born between 1931 and 1959.

Methods: Data from the Health and Retirement Study (HRS) were analyzed. Respondents in four age cohorts were selected for comparison. Multivariable linear regression models were used to assess cohort differences in P62 and P65 while adjusting for covariates.

Results: P62 and P65 increased among boomers despite worsened self-rated health compared to the two preceding cohorts, with 37% and 80% increases among mid-boomers in construction trades. Cohort differences in P62 and P65 remained after controlling for covariates. Changes in pensions, income inequity, and education were significantly associated with work expectations, but SSA policy was not.

Conclusions: Baby boomers expect to work longer than their predecessors. Efforts to improve work quality and availability for older workers are urgently needed, particularly in physically demanding occupations.

Gray and Green Together: Climate Change in an Aging World

Source: Robert B. Hudson, Public Policy & Aging Report, Volume 27 Issue 1, 2017

…Beyond documenting the mounting toll that climate change is taking on elders and others, there is obviously need to design and carry out interventions to mitigate the damage that such change will inevitably bring. Importantly, it is here where elders can be cast as players as well as victims. Older adults represent an enormous latent resource that can be mobilized to address the global warming challenge. Elders have knowledge, resources, and an intergenerational as well as personal stake to bring to this effort, one which clearly has “manifest destiny” written all over it.

How to get more elders involved in addressing climate change and what form that involvement might take are core elements of this issue of Public Policy & Aging Report. The articles here address a number of questions, including how concerned about climate change—absolutely and relative to younger age groups—are today’s elders; how to understand what role older adults play around global warming—change agents or contributors; and how can older people mobilize to meet the climate change challenge on behalf of themselves, their descendants, and the population at large….

Articles include:

Greening Gray: Climate Action for an Aging World
Source: Michael A. Smyer, Public Policy & Aging Report, Volume 27 Issue 1, 2017
(subscription required)

Growing Old in a Changing Climate
Source: Gary Haq, Public Policy & Aging Report, Volume 27 Issue 1, 2017
(subscription required)

How to Effectively Debunk Myths About Aging and Other Misconceptions
Source: John Cook, Public Policy & Aging Report, Volume 27 Issue 1, 2017
(subscription required)

Mobilizing Older People to Address Climate Change
Source: Karl Pillemer, David Filiberto, Public Policy & Aging Report, Volume 27 Issue 1, 2017
(subscription required)
Elders and Climate Change: No Excuses
Source: Rick Moody, Public Policy & Aging Report, Volume 27 Issue 1, 2017
(subscription required)

The Scream of Nature
Source: Kathy E. Sykes, Public Policy & Aging Report, Volume 27 Issue 1, 2017
(subscription required)

Never Too Old to Care: Reaching an Untapped Cohort of Climate Action Champions
Source: Susanne C. Moser, Public Policy & Aging Report, Volume 27 Issue 1, 2017
(subscription required)

Coconstructing Environmental Stewardship: A Detroit-Driven Participatory Approach
Source: Peter A. Lichtenberg, Carrie Leach, Nicholas Schroeck, Brian Smith, James Blessman, Public Policy & Aging Report, Volume 27 Issue 1, 2017
(subscription required)

Retirement Security: Improved Guidance Could Help Account Owners Understand the Risks of Investing in Unconventional Assets

Source: U.S. Government Accountability Office (GAO), GAO-17-102: Published: December 8, 2016

From the fast facts:
People who invest their retirement accounts in unconventional assets—such as real estate or virtual currency—may be placing their savings at risk.

Retirement accounts allowing such unconventional investments increase owners’ responsibilities in ways they may not understand—and mistakes can trigger taxes and penalties. Moreover, account custodians may prematurely close an account or let valueless assets and fraud go undetected because they did not accurately determine the value of unconventional assets.

We recommended that IRS improve guidance for account owners with unconventional retirement assets and clarify how to annually value such assets. ….

Individual Retirement Account (IRA) Owner Investing in a Rental Home May Unknowingly Jeopardize IRA Tax Status

SPOTLIGHT: Aging States

Source: Capitol Ideas, November/December 2016

Articles include:
Facing a wave of aging baby boomers, many states are trying to make it easier for seniors to stay in their homes—as many prefer—instead of moving into more costly nursing homes. With high stakes for state budgets, many states are undertaking long-term planning to pay for long-term care.

What is the best state for retirement? It’s a popular question among baby boomers, who increasingly seek more livable communities that will allow them to age in place. How are states responding? Drawing from an AARP scorecard on state long-term services and supports, here’s a look at top states for retirement and aging.

For many seniors, staying active in their golden years depends on staying mobile. But in many states and communities, transportation systems haven’t been developed with seniors or individuals with disabilities in mind. That’s changing as states are taking steps to improve transportation mobility for older adults.

Elder financial abuse costs older Americans $2.9 billion per year, but the harm to seniors caused by fraud often extends far beyond the checkbook. Oregon Attorney General Ellen Rosenblum shares key steps her state has taken to strengthen elder abuse prevention and response.

When state leaders discuss the fiscal challenges of an aging population, the focus is often on costs for senior services. However, as CSG Senior Fellows Katherine Barrett and Richard Greene point out, declining tax revenues are also a concern.

It Pays to Talk

Source: National Academy of Social Insurance, November 2016

From the summary:
Deciding when to take Social Security benefits is one of the most important financial decisions your parents will make. This infographic outlines thre things they should keep in mind to make smart claiming decisions. Depending on your parent’s financial situation, it may pay to wait, but definitely pays to talk.

The infographic is part of a toolkit of resources designed to educate workers approaching retirement, and their families and friends, about their options for taking Social Security benefits, and about why it can pay to wait.
it pays to talk to your parents about social security

Recoupment of Pension Overpayments: Equitable Liens and Meaningful Reform after Montanile

Source: Maria O’Brien Hylton, Jeanne Medeiros, Boston University School of Law, Public Law Research Paper No. 16-33, August 29, 2016

From the abstract:
This short paper reviews the current state of the law governing recoupment actions for defined benefit ERISA plans and focuses in particular on actions against retirees who are without fault for the overpayment. The paper argues that the current practices of many plans which focus on recovering overpayments without taking the consequences to the retiree into account are not required by either ERISA or the IRS. The practices which include ceasing all pension payments, huge cuts in payout amounts and unlimited reach back even in cases where the plan fiduciary has clearly breached its duty to participants, cause tremendous harm to participants who are invariably elderly and often disabled and/or living on a small, fixed income. The authors call for a limited reach back period of no more than three years and for a new requirement that plans obtain insurance in order to provide protection to both participants and plans when overpayment errors are discovered.

Does Socioeconomic Status Lead People to Retire Too Soon?

Source: Alicia H. Munnell, Anthony Webb and Anqi Chen, Center for Retirement Research at Boston College, IB#16-14, August 2016

The brief’s key findings are:
• The ability to stay on the job long enough for a secure retirement may vary by socioeconomic status (SES).
• Using education for SES, the analysis calculates a retirement gap – the difference between how long households plan to work and how long they need to work.
• Not surprisingly, retirement gaps are both more common and larger among households in the bottom education quartile compared to those in higher quartiles.
• Even after controlling for demographic/financial characteristics and pre-retirement shocks, the bottom-quartile households still have much larger gaps.
• Thus, premature retirement by low-SES households is a big problem. However, relatively poor health and job prospects may make it harder for them to work longer.

Protecting the Vulnerable or Ripe for Reform? State Income Tax Breaks for the Elderly—Then and Now

Source: Ben Brewer, Karen Smith Conway, Jonathan C. Rork, Public Finance Review, Published online before print September 9, 2016
(subscription required)

From the abstract:
State governments have a long history of providing income tax relief to their elderly constituents. Our research investigates the current distributional and revenue effects of these tax breaks, as well as the economic status of the elderly, and explores how these measures have changed since 1990. Using data from the 1990 Integrated Public Use Microdata Series and the 2013 American Community Survey, combined with the TAXSIM calculator, we calculate current state income tax liabilities and revenues and simulate the effects of removing all age-related tax breaks. Our analyses reveal that the economic well-being of the elderly has grown substantially relative to the nonelderly and that state tax breaks primarily benefit the middle- and upper-income elderly. Revenue costs of these tax breaks have also grown substantially, and their modest and mixed effects on income equality, measured by changes in the Gini, cast doubt on equity as a justification.

The Effect of Firms’ Phased Retirement Policies on the Labor Market Outcomes of Their Employees

Source: Martin Hube, Michael Lechner, Conny Wunsch, ILR Review, Vol 69 no. 5, October 2016
(subscription required)

From the abstract:
In this article, the authors assess the impact on male employees’ labor market outcomes of firms offering a special form of phased retirement. The goal of the program is to smooth the transition from work to retirement and to decrease the costs of public pension and unemployment insurance schemes by increasing the employment of elderly workers. Using a unique linked employer-employee data set, the authors examine whether male employees spend more time in employment and less time in unemployment or inactivity after the introduction of the program. Results suggest that phased retirement options offered by firms can help to reduce some of the public costs of low labor force attachment of elderly workers, mainly by reducing exits through unemployment and by increasing employment and earnings. Under relatively good labor market conditions, they may also encourage a small share of workers to exit the labor market earlier.