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In the first part of the paper using official data sources, we estimate the real income of the elderly and of the rest of the population during the 1570s. We find that income per household of the elderly has increased more rapidly than income per household of the rest of the population, even though the elderly's fraction of income from work decreased greatly. In the rest of the paper we use the 1969 and 1975 Retirement History Surveys to estimate income, wealth and inflation vulnerability of households whose heads were ages 58 through 63 in 1969. The income data verified the results from the official data. The 1969 wealth data show that a representative person on the eve of retirement has small holdings of financial assets: most of the assets are in housing, Social Security and Medicare. Between 1969 and 1975 real wealth increased slightly on average. There was some tendency for the distribution to tighten. We found that contrary to popular opinion, on average the elderly are not especially vulnerable to a sudden increase in either prices or the rate of inflation. Most of their assets are inflation protected. The wealthy are most vulnerable to inflation.

Retirement income.

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The President's Commission to Strengthen Social Security proposed three reform plans. Two, analyzed here, restore actuarial balance in the absence of individual accounts. One achieves this balance solely through benefit reductions. The other uses new dedicated revenue to cover one-third of the actuarial deficit, reducing benefits to close the rest. Both plans cut disability and young survivor benefits in step with retirement benefits, while bolstering benefits for long-career low earners and surviving spouses with low benefits. The plans both include voluntary individual accounts that replace part of the scaled-back Social Security system. Payroll taxes are diverted to the accounts and one of the plans also requires a (subsidized) add-on contribution for those choosing accounts. Under both models, any payroll tax deposited in an individual account is also recorded in a 'liability account' for the worker. The liability account tracks the diverted payroll revenue (with interest) and is paid off by reducing traditional benefits. The individual accounts are subsidized through a sub-market interest rate on the liability accounts. This subsidy worsens the financial position of the Trust Fund. The accounts also create a cash-flow problem. Consequently, by themselves, the individual accounts make Social Security's solvency problems worse both in the short run and over the long run. To offset the adverse impact of the accounts, the plans call for large transfers of general revenues (despite substantial projected budget deficits). If all (two-thirds of) eligible workers opted for the accounts, the new revenues required over the next 75 years would amount to between 1.2 and 1.5 (0.8 and 1.1) percent of payroll. Holding the disabled harmless from the benefit reductions would raise the required transfers to between 1.5 and 1.7 (1.1 and 1.3) percent of payroll (compared to a projected actuarial deficit of 1.9 percent of payroll under current law). Despite requiring this much general revenue relative to paying scheduled benefits, the plans would produce significant reductions in expected combined benefits. At the end of 75 years, however, assets in the accounts would amount to between 53 and 66 (35 and 44) percent of GDP, and the value to Social Security of the accumulated liabilities that reduce later benefits would amount to more than 20 (15) percent of GDP.

Retirement income

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Retirement income

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This book explores the financial strategies and systems for securing lifelong pensions in public sector retirement plans. It delves into the mechanisms by which pensions are funded, including pay-as-you-go and capital-funded systems. The authors, Reinhard Dehlinger and Helmut Baader, discuss the challenges posed by demographic changes, such as an aging population and low birth rates, and their impact on pension systems. The book also examines hybrid financing methods and the Riester-Rente, a state-subsidized pension introduced in Germany. The authors propose reforms to increase pension benefits and participation rates. The work is intended for policymakers, financial planners, and professionals involved in public sector pension management.

Pensions. --- Retirement income. --- Pensions --- Retirement income

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"The 2020s are likely to be among the worst times to be nearing retirement or in the early years of retirement. The book first explains the forces that are coming together to make it more difficult to create and maintain financial security and independence in retirement. The middle of the Baby Boomer generation will increase the pressure on every aspect of retirement. The early boomers began reaching 65 in 2011. Since then about 10,000 Boomers per day have been hitting 65. But the middle section of the Boomers is larger than the early Boomers. Beginning in 2024, an estimated 12,000 Baby Boomers will turn 65 each day. Already the foundations of retirement, Social Security and Medicare, are under stress. The rapid increase in the number of Boomers enrolling in these systems will increase the strain. In addition, the high returns in stocks and other investments since 2009 (and especially since 2017) make it likely that investment returns will be below their long-term averages during most of the 2020s. Further, interest rates on traditional retirement income investments, such as certificates of deposit, short-term government bonds, and money market funds, are the lowest they've been in U.S. history and are likely to remain below their historic averages. In addition, taxes imposed by all levels of government are likely to increase during the 2020s. A longstanding myth is that a person's tax burden will decline in retirement. That hasn't been true for some time, and in the 2020s retirees are likely to face a range of tax increases. For a long time, many retirees left a lot of money on the table by making less-than-optimum decisions about Social Security, Medicare, IRAs, 401(k) rollovers, long-term care, and other key retirement issues. For example, a recent study done for United Income concluded that only four percent of Social Security beneficiaries made the optimum decision about when to claim retirement benefits. For the most part, the Boomers mistakes were bailed out by high stock market returns and low inflation. Retirees in the 2020s aren't likely to be so fortunate. Peak Boomers have to make the right decisions about all aspects of their retirement finances. This book will cover each of the key retirement planning issues faced in the five years before retirement and the first five years of retirement and guide readers to making the right decisions for them."--

Retirement --- Retirement income --- Retirement income. --- Planning. --- Planning.