Working Longer as Jobs Contract

New York Times, Working Longer as Jobs Contract. (October 23, 2008).

New York Times, Working Longer as Jobs Contract

http://www.nytimes.com/2008/10/23/business/retirement/23SQUEEZE.html?pagewanted=all

Social Security recipients to get a raise in 2009; Average retiree's check to go up by $63 a month

USA TODAY, October 17, 2008 Friday, MONEY; Pg. 1B, 366 words, Christine Dugas and Sandra Block

EBRI 2008 Recent Retirees Survey: Report of Findings

This paper presents findings from the 2008 Recent Retirees Survey, sponsored by the Employee Benefit Research Institute (EBRI) to better understand the tools and practices that might encourage workers to postpone their retirement and remain longer with their company. It finds that retirees typically retired from employers for one of four reasons: retirement becomes affordable, lack of job satisfaction, a desire for more personal or family time, and/or their own health status. One of the major findings from the survey is that employers have a narrow window of up to two years in which they may be able to intervene to change retiring workers' decisions by offering them incentives to remain with the company. Although no single incentive is likely to motivate a majority of retirees to stay longer with their employer, it appears that employers may be able to assemble a toolkit of alternatives that would be effective in retaining substantial numbers of workers at retirement age. The survey tested a total of 19 possible incentives that might encourage retiring workers to postpone retirement. The most likely incentives to be successful are: (1) feeling truly needed for an assignment; (2) allowing the worker to receive a full pension while working part time; (3) a pay increase; (4) continuing to receive company subsidized health insurance benefits at the same level as full-time workers while working part time; (5) allowing the worker to receive a partial pension while working part time so that total income remains the same; (6) being able to work seasonally or on a contract basis.

Helman, Ruth, Copeland, Craig, VanDerhei, Jack and Salisbury, Dallas L.,EBRI 2008 Recent Retirees Survey: Report of Findings(July 2008). EBRI Issue Brief, No. 319Available at SSRN: http://ssrn.com/abstract=1158071

Chasing down retirement

http://www.chicagotribune.com/business/yourmoney/chi-ym-working-0727-cpjul27,0,2918337.column

Can Women Bridge the Retirement Savings Gap?

http://www.businessweek.com/investor/content/aug2008/pi2008088_307392.htm?chan=top+news_top+news+index_investing

Economic Woes Force Many To Postpone Retirement

NPR's All Things Considered

http://www.npr.org/templates/story/story.php?storyId=93241950

Goal for retirement saving rises

http://www.usatoday.com/money/perfi/retirement/2008-06-30-retirement-pay-health-care_N.htm

The 2008 Retirement Confidence Survey ®: Americans Much More Worried About Retirement, Health Costs a Big Concern

Abstract: This paper presents key findings from the 18th annual Retirement Confidence Survey® (RCS), a survey that gauges the views and attitudes of working-age and retired Americans regarding retirement, their preparations for retirement, their confidence with regard to various aspects of retirement, and related issues. The 18th wave of the RCS finds that Americans' confidence in their ability to afford a comfortable retirement has dropped to its lowest level in seven years, reflecting worries about health costs, the economy, and home values. Decreases in confidence occurred across all age groups and income levels but was particularly acute among younger workers and those with lower incomes. However, this decreased confidence does not appear to have affected the way most Americans plan and save for retirement. Moreover, the RCS finds that faulty assumptions still hinder a realistic assessment of the preparations needed to ensure a financially secure retirement. In addition, the survey found that about half of workers (47 percent) say they and/or their spouse have tried to calculate how much money they will need for a comfortable retirement, up considerably from the low point of 29 percent measured in 1996. As before, the 2008 survey finds that doing a retirement savings calculation is particularly effective at changing worker behavior: 44 percent who calculated a goal changed their retirement planning, and of those almost two-thirds (59 percent) started saving or investing more. The 2008 Retirement Confidence Survey® was conducted in January 2008 through 20-minute random telephone interviews with 1,322 individuals (1,057 workers and 265 retirees) age 25 and older in the United States. The RCS was co-sponsored by the Employee Benefit Research Institute (EBRI), a private, nonprofit, nonpartisan public policy research organization; and Mathew Greenwald & Associates, Inc., a Washington, DC-based market research firm.

Keywords: Retirement attitudes and opinions, Retirement planning

JEL Classifications: J26

Accepted Paper Series

Suggested Citation
Helman, Ruth, VanDerhei, Jack and Copeland, Craig, "The 2008 Retirement Confidence Survey ®: Americans Much More Worried About Retirement, Health Costs a Big Concern" . EBRI Issue Brief, No. 316, April 2008 Available at SSRN: http://ssrn.com/abstract=1123642

The Impact of PPA on Retirement Savings for 401(K) Participants

Abstract: This paper simulates (under several assumptions) the likely impact of 401(k) plan sponsors switching from voluntary enrollment systems to automatic enrollment designs with automatic escalation of contributions for a significant portion of workers (not just current 401(k) participants or those eligible to participate). This analysis indicates that even under the most conservative assumptions for auto-escalation of contributions, switching 401(k) plans to auto-enrollment is likely to have a very significant positive impact in generating additional retirement savings for many workers, especially for low-income workers. When results are aggregated across all income categories, the increase in the value of 401(k) accumulations at age 65 as a multiple of final earnings for those currently ages 25-29 would be approximately 2.4 to 2.6 times final salary by switching from voluntary enrollment to automatic enrollment. Although the aggregate results favor automatic enrollment, distributional analysis of the differences between the two systems indicates that the higher paid are not likely to benefit as much from such a change. The median 401(k) accumulations for the lowest-income quartile of these workers (assuming all 401(k) plans were voluntary enrollment) would only be 0.1 times final earnings at age 65 (this is largely due to the fact that 41 percent of workers - as opposed to participants - were assumed to have zero balances at age 65). However, if all 401(k) plans are assumed to be using the auto-enrollment provisions under PPA, the median 401(k) accumulations for the lowest-income quartile jumps to 2.5 times final earnings under the most conservative assumptions and 4.5 times final earnings under the most beneficial assumptions. Even for the top 25 percent of these workers (when ranked by 401(k) accumulations as a multiple of final earnings), there are large increases: the multiple under a voluntary enrollment scenario is 1.8 times final earnings, whereas auto-enrollment provides multiples ranging from 6.5 to 10.4, depending on auto-escalation of contributions. Comparing income replacement targets generated in previous EBRI work with these simulated 401(k) accumulations shows that, even with the large increases that can be expected for many workers under the safe harbor auto-enrollment plans introduced by PPA, and with current-law Social Security benefits, additional resources will still be needed for some of them.

Keywords: Employment-based benefits, Pension plan coverage, Pension plan design, Retirement income, Savings

JEL Classifications: J26, J33

Accepted Paper Series

Suggested Citation
VanDerhei, Jack and Copeland, Craig, "The Impact of PPA on Retirement Savings for 401(K) Participants" . EBRI Issue Brief No. 318 Available at SSRN: http://ssrn.com/abstract=1152392

Savings Needed to Fund Health Insurance and Health Care Expenses in Retirement: Findings from a Simulation Model

Abstract: This paper provides estimates for savings needed to cover health insurance to supplement Medicare and out-of-pocket expenses for health care services in retirement. It finds that a male age 65 in 2008 and retiring at age 65 will need anywhere from $64,000 to $159,000 in savings to cover health insurance premiums and out-of-pocket expenses in retirement if they are comfortable with a 50 percent chance of having enough money and $196,000 to $331,000 if they prefer a 90 percent chance. Women age 65 retiring in 2008 will need anywhere from $86,000 to $184,000 in savings to cover health insurance premiums and out-of-pocket expenses in retirement if they are comfortable with a 50 percent chance of having enough money, and $223,000 to $390,000 if they prefer a 90 percent chance. Persons currently age 55 will need even greater savings when they turn 65 in 2018. Past EBRI research has examined how much money an individual needs for health care expenses in retirement, focusing on how savings varies by length of life and health care cost increases. Past research was based on computer modeling that used deterministic (non-random) analytical techniques. The research presented in this paper builds on that earlier work by introducing random (stochastic) computer modeling to more realistically examine the uncertainty of longevity and investment risk as well as future health care cost increases. This paper begins with a brief discussion of the modeling technique, followed by main findings and updated data on trends in retiree health benefits.

Keywords: Employment-based benefits, Health care costs, Health insurance, Medicare, Medicare supplement insurance, Prescription drug costs, Public employees, Retiree health benefits, Savings, State and local employees

JEL Classifications: H51, I1, J14, J32

Accepted Paper Series

Suggested Citation
Fronstin, Paul , Salisbury, Dallas L. and VanDerhei, Jack, "Savings Needed to Fund Health Insurance and Health Care Expenses in Retirement: Findings from a Simulation Model" (May 2008). EBRI Issue Brief, No. 317, May 2008 Available at SSRN: http://ssrn.com/abstract=1139175

Goal for retirement saving rises; Conventional wisdom changes as prices surge

USA TODAY, July 1, 2008 Tuesday, MONEY; Pg. 1B, 427 words, Christine Dugas

http://www.usatoday.com/money/perfi/retirement/2008-06-30-retirement-pay-health-care_N.htm

The 2008 Retirement Confidence Survey ®: Americans Much More Worried About Retirement, Health Costs a Big Concern

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1123642


This paper presents key findings from the 18th annual Retirement Confidence Survey® (RCS), a survey that gauges the views and attitudes of working-age and retired Americans regarding retirement, their preparations for retirement, their confidence with regard to various aspects of retirement, and related issues. The 18th wave of the RCS finds that Americans' confidence in their ability to afford a comfortable retirement has dropped to its lowest level in seven years, reflecting worries about health costs, the economy, and home values. Decreases in confidence occurred across all age groups and income levels but was particularly acute among younger workers and those with lower incomes. However, this decreased confidence does not appear to have affected the way most Americans plan and save for retirement. Moreover, the RCS finds that faulty assumptions still hinder a realistic assessment of the preparations needed to ensure a financially secure retirement. In addition, the survey found that about half of workers (47 percent) say they and/or their spouse have tried to calculate how much money they will need for a comfortable retirement, up considerably from the low point of 29 percent measured in 1996. As before, the 2008 survey finds that doing a retirement savings calculation is particularly effective at changing worker behavior: 44 percent who calculated a goal changed their retirement planning, and of those almost two-thirds (59 percent) started saving or investing more.

Retirement Confidence Survey articles

HEALTH CARE, ECONOMY HAVE MANY WORRIED ABOUT THEIR RETIREMENTS

San Jose Mercury News (SJ) - WEDNESDAY, April 09, 2008

GOLDEN RETIREMENT DREAMS TURN A FOGGY GRAY

St. Paul Pioneer Press (ST) - SUNDAY, April 13, 2008

By: Gail MarksJarvis

WELCOME TO A TIME OF PESSIMISM ON RETIREMENT IN AMERICA

Sun, The (Baltimore, MD) (BS) - SUNDAY April 13, 2008

By: Gail MarksJarvis

DREAMS ABOUT RETIRING WITHER

St. Petersburg Times (PE) - WEDNESDAY, April 09, 2008

By: HELEN HUNTLEY

WORKERS WORRY OVER RETIREMENT SAVINGS

Capital Times, - WEDNESDAY, April 09, 2008

By: EILEEN ALT POWELL Associated Press