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.
Source: PA Times, Vol. 32 no. 9, October 2009
About 49 percent of the nations’ cities, counties and townships expect less revenue in 2010, and 21 percent expect fewer employees, according to a new survey. About 26 expect increased consolidation of local services.
With shrinking budgets and fewer staff, local officials are taking several approaches to contain long-term costs associated with employee and retiree health care.
Participation in employment-based retirement plans decreased by small amounts for most categories of workers in 2008, but those with the strongest connection to the work force experienced the smallest decline: 0.5 percentage point, according to a study released by the EBRI. Additional decreases are possible in 2009-2010, depending on economic trends, the study adds.
The brief’s key findings are:
The National Retirement Risk Index (NRRI) shows the percent of households ‘at risk’ of failing to maintain their standard of living in retirement.
The NRRI jumped from 44 percent to 51 percent today due to:
– the bursting of the housing bubble;
– the stock market crash; and
– the ongoing rise in Social Security’s Full Retirement Age.
Clearly, Americans need more retirement saving.
Even before the current recession, retirement income security had become a major national concern, as companies increasingly shifted from traditional pensions to do-it-yourself savings plans. Since the fall of 2008, the faltering stock market and dwindling 401(k) accounts have turned a major concern into a crisis, highlighting the weaknesses in our current system.
While each group involved in Retirement USA is actively working to strengthen current pension and 401(k) programs for today’s workers, they are convinced that it is critical to start now to lay the foundation for a new system to supplement Social Security.
By combining key elements of traditional pensions with those of 401(k)-type plans, and adding new ideas, the Retirement USA principles provide a framework for a system in which employers, workers, and the government share the responsibility for retirement income security.
Source: Girard Miller and Jim Link, Government Finance Review, Vol. 25 no. 4, August 2009
Many jurisdictions are concerned about the affordability of their retirement benefits. If your organization is looking for solutions, there are ways to achieve sustainable financing.
Source: John G. Kilgour, Compensation & Benefits Review, Vol. 41, No. 5, September 2009
From the abstract:
The application of social security to most of the public sector has generated measures to address the resulting inequities and a campaign to repeal or modify those measures.
What are some of the reasons workers are delaying retirement? How has the planned retirement age changed over time? What are the trends in labor-force participation?
Reasons for Delaying: The poor economy (36 percent) and the need to make up for losses in the stock market (28 percent) are the most-often cited reasons in the 2009 EBRI Retirement Confidence Survey (RCS). The chart below compares reasons given in 2008 and this year.
From the summary:
As the members of the “baby boom” generation–people born between 1946 and 1964– approach retirement, the demographic profile of the U.S. workforce will undergo a substantial shift as a large number of older workers will be joined by relatively few new entrants to the labor force. According to the Census Bureau, there will be 204 million Americans aged 25 or older in 2010. By 2030, this number will increase by 23% to more than 251 million. Most of this growth will occur among people aged 65 and older. The Census Bureau estimates that while the number of people between the ages of 25 and 64 will increase by 15.5 million (9.4%) between 2010 and 2030, the number of people aged 65 and older is projected to grow by 31.7 million, or 79.2%.
Source: Experience Works, September 2009
From the summary:
In a new study of more than 2,000 low-income unemployed workers age 55 and older, 46 percent need to find jobs so they don’t lose their homes or apartments, and approximately half (49 percent) have been looking for work for more than a year.
Many of the older workers in the study did not plan to be looking for work in their 60s, 70s and 80s, but a life event triggered their need to find employment. These triggering events include being laid off (20 percent); the death of a spouse (16 percent); and large medical bills due to a personal illness or illness of a spouse (15 percent).
More than one-third (38 percent) of older workers surveyed had retired but they are going back to work, and many have no end in sight for their working years.
For those who do have a retirement timeframe, the average targeted retirement age is 72. Ninety percent of survey respondents age 76 and older plan to continue working in the next five years.