Spring News from Women's Institute for a Secure Retirement

Articles:

The National Deficit and the Debt? Why is Social Security Part of the Debate?

Webinar: Taking the Mystery Out of Retirement Planning-April

Details at Spring News from Women's Institute for a Secure Retirement

Fundamental Changes To Medicare Proposed By Elder Law Expert

House Budget Committee Chairman Paul Ryan's proposal to change Medicare for those under age 55 is nothing short of a complete reconceptualization of the health insurance program, says a University of Illinois elder law expert.

Richard L. Kaplan, a professor of law and expert on retirement issues, says the Ryan proposal would scrap Medicare's current defined-benefit program in favor of a defined-contribution arrangement in which the government would provide seniors with a stipulated amount of money to purchase health insurance from private insurers.

"The Ryan proposal would eliminate the package of benefits that everyone receives but would allow seniors to choose from a variety of plans with different benefits, different premiums and different co-payment obligations," Kaplan said.

Kaplan, the Peer and Sarah Pedersen Professor of Law at Illinois, says that what Rep. Ryan is proposing isn't a radically new idea, as a broadly similar plan was first considered at length during the Clinton administration.

"It was proposed under the title of 'premium support,' though occasionally it has been described as vouchers," he said. "Essentially, it's the same concept - provide seniors with a designated amount of money and let them shop for the plan that best meets their needs."

While there may be nothing new under the sun in Washington, that doesn't mean that some seniors won't come out ahead under the Ryan proposal.

"Some seniors will benefit, because they will be able to use their Medicare dollars for benefits that they prefer," Kaplan said. "For example, Medicare currently pays for individual hospital stays of 60 to 90 days in length. But the average hospital stay for someone 65 years and older is less than six days. So a prospective Medicare enrollee might choose a plan in the proposed system that provides shorter hospital stay coverage but more extensive home health care coverage than Medicare currently includes."

The chief motivator of the Ryan plan is to, plain and simple, save the government money, Kaplan said.

"As medical costs increase, Medicare's costs rise accordingly," he said. "Under the Ryan plan, Medicare's costs would be fixed and known in advance. Increases in medical costs over whatever cost-of-living increase the government dictates for Medicare will not be borne by Medicare, but by those seniors who choose more comprehensive benefit plans."

Although last year's health care reform law left the basic structure of Medicare intact, the Ryan proposal would transform Medicare to make it resemble the types of health insurance plans that many employers offer to their employees. Although this would represent a dramatic change, Kaplan said, such changes to Medicare are not wholly unprecedented.

"Actually, Medicare Part D, which provides coverage for prescription drugs, operates on a very similar basis - private insurers receive government subsidies to provide various drug plans, and seniors select among the options that are available, paying more for greater coverage," Kaplan said.

But in a different health insurance paradigm, the downside is that seniors will almost certainly face more complexity.

"If our experience with Medicare Part D's drug plans is any indication, older Americans will confront a new array of insurance plans under Medicare, some of which may change their components annually," Kaplan said.

But Kaplan is quick to note that the present system is no walk in the park either.

"Presently, most seniors sign up for hospital coverage under Medicare Part A, then decide whether they want to purchase Medicare Part B coverage for physicians' charges, and then decide whether to add a Medicare Part D plan to cover their prescription medication needs," he said. " Then they must consider whether to buy a private Medigap insurance plan to pay for the deductibles and co-payment or co-insurance obligations of Medicare Parts A and B. So, in many ways, the new system of integrated benefit plans will be simpler and more intuitive. But the transition to this new environment will certainly be challenging."

Not all seniors will be affected by the change; adults 55 years and older would be largely unaffected by Ryan's proposal, Kaplan said.

"Unless an option is provided to let them switch, which may or may not be incorporated into the final plan, anyone who is in Medicare presently will not be affected by his proposal," Kaplan said. "Those seniors who are already familiar with Medicare's component parts need not bother with this legislation."

Source:
Phil Ciciora
University of Illinois at Urbana-Champaign

About Retirement - Time Goes By

by Ronni Bennett

Yesterday in The New York Times, there was a terrific story by Al Baker about a police detective, a veteran of 40 years on the force, that has it all: human interest, crime statistics, department history, snitches, murder, mayhem and headline cases. Real-life Law & Order in black-and-white.

It is also a story about getting old.

"Some of his colleagues lovingly call him 'grandpa.' Some have taken to calling him 'Fish,' after the old detective played by Abe Vigoda on Barney Miller. In fact, Detective [John C.] Roe, 61, joined the city’s police force nearly a decade before that television series was shown...

"He is currently 10th on the Police Department’s longevity list; by the time he reaches the mandatory retirement age of 63 on Halloween 2012, he will be first."

I was reminded of my own retirement in 2004 – unanticipated but mandatory in a different way.

With a bunch of other employees, I had been caught in a layoff in 2004, from the website of a business research firm. As my younger colleagues found work in six or eight or 10 weeks or so, I couldn't get an interview.

There were repeated indications that my age, then 63, was a hindrance, but it is the hardest kind of ageism to prove - “failure to hire” - and anyway, I wasn't interested in lawsuits. I just wanted a job.

As a contract employee with zero benefits, I had been ineligible for unemployment insurance and my individual health care coverage cost hundreds of dollars a month. With that and the other normal expenses, I depleted all my savings and then sank deeper into debt each month as I took cash advances on one credit card to pay another and on a third or pay a fourth, etc.

The amount of money I owed was terrifying and rapidly growing. I had nightmares of becoming homeless.

It took a year of living in daily fear for my future until I realized that the only solution (salvation?) was to sell my apartment in Manhattan and leave the city. I went further into debt to get my home in shape to sell which didn't happen for another ten months.

And that is how I was forced into my personal “mandatory” retirement. Not what I had planned. Well, it would not have been my plan if I had bothered to plan - which I had not.

My great aunt Edith had worked until she was 70. My mother had worked until a couple of years before she died at age 75. Back in 2004, when I was laid off, I figured I would probably work for another decade.

If you don't count that last job, which I hated for a variety of good reasons (the four-hour commute was the least, which tells you something about it), I spent nearly 50 years at jobs I loved.

They were almost always interesting. They were my never-ending college education, my world travel, my access to brilliant, fascinating people along with some not-so-brilliant but still fascinating people too. And they actually paid me for this.

If I'd had my druthers, I would have retired from a job like one of those so that I could have felt, at the end of my working life, like Detective Roe who says he

"...dreads the approach of Halloween 2012, when he will have to hand in his badge, No. 1679.

"Sitting in the cinder-block interview room of the station house in Harlem, across from St. Mary’s Church, he adds: 'I’d be here until I’m 70, if I could. I’d be here forever.'”

TIME GOES BY | The War on Elders (and Everybody Else) – Part 1 of ?

by Ronni Bennett

It's been an exhausting few weeks: the earthquake in Japan, a new U.S. military venture in Libya, the ongoing demonstrations and fighting in almost every middle eastern country, the ominous silence from Israel, the crucial protests in Wisconsin, Michigan, Indiana and several other states and the stepped-up budget attacks from government and corporate elites on Social Security and Medicare. Have I left out anything big?

President Obama has decamped to Latin America and Congress is in recess so maybe they can't do too much damage for awhile. It's a good time to step back and survey the big picture.

Since its inception about eight years ago, this blog has been concerned with the lives of elder issues large and small. I try to have some fun with it while lobbying for better treatment of old people, passing on practical information, addressing the difficult issues of illness and mortality and above all, adhering to Time Goes By's bedrock principle: contrary to what western culture generally tells us, there is nothing wrong with being old.

When, in these pages, I have indulged my second passion – politics – I have sometimes felt guilty about straying from the blog's purpose. Now I have come to see that in our politics, everyone of every age is at risk.

We are not supposed to say so (“all men are created equal” and blah, blah, blah) but I am sure you have noticed that there is a class war going on in the United States. Actually, it is global.

Here, it started the moment the New Deal was in place. That era's oligarchy had lost their battle against President Roosevelt's progressive legislation, but by steady increments since then, they have just about won the war now.

Over the years, the elites have used many tactics and strategies to steal all the wealth of the nation. One is the classic, divide and conquer. Let's look at that as it is applied to a crucial elder issue: Social Security.

I noticed it for the umpteenth time yesterday in an Op-Ed in The New York Times by a 24-year-old complaining about the lack of jobs and opportunity for his age group of recent graduates [emphasis is mine]:

”I fear that the young will bear the brunt of the pain:” he wrote, “taxes on workers will be raised and spending on education will be cut while mortgage subsidies and entitlements for the elderly are untouchable.

You and I know, of course, that “untouchable” no longer holds, but so deeply held is this belief among the young (old people benefit to the detriment of youth) that in the context of the young man's entire essay, his elder smackdown hardly stands out.

Why do the young believe this? Because it has been an argument repeated by the right for several decades in their ongoing offensive against Social Security and Medicare – an unrelenting propaganda machine pounding out the notion of “greedy geezers.”

That doesn't absolve a 24-year-old from doing his homework to find out how Social Security actually works but in his defense, colleges have dumbed down their courses for the past two generations and grade inflation has been flagrant for as long. So we cannot expect much critical thinking from our expensively “educated” youth.

The result, however, is an army of young people out to cut grandma's and grandpa's “entitlements” at the behest of an obscenely wealthy elite that is no more interested in the well-being of the young than they are in the current crop of “greedy geezers.”

What the young Op-Ed writer and his cohorts do not realize is that in blaming elders (instead of the wealthy elite) for their economic predicament, they deeply endanger their own futures.

How can it be otherwise? Salaries have been stagnant for more than a decade and there is no reason to believe that will change. Private pensions have been disappearing for even longer.

Any 401(k)s and IRAs that have recovered their value from the 2008 crash will be decimated again in the next crashes – certain to happen once or twice or more again over the next 40 years until the time that young man is ready to retire.

And who is to say he can even contribute to those programs. With low, flat salaries, huge college loans to repay, children to educate at astronomical tuitions, food and energy prices that are sure to rise dramatically in coming years, not to mention the cost of health care that unless we enact Medicare for All (doubtful), will be – already is - beyond the financial reach of most people.

So cuts or elimination of our “entitlements,” which many young people are convinced are necessary, will – if successful - doom their generations to an even more impoverished old age than so many of our own live with now.

The war on elders is also a war on youth - on everybody. More about all this tomorrow.

Emil Corwin, Who Worked for FDA Until Age 96, Dies at 107 - The Washington Post

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By T. Rees Shapiro

Emil Corwin, who retired at age 96 from the Food and Drug Administration as the oldest federally employed public affairs officer, died of cardiac arrest March 15 at his home in Chevy Chase. He was 107.

Mr. Corwin, who began his career in the 1920s as a journalist in Massachusetts, joined the FDA in 1974, when he was 70. He flirted with retirement four years later but returned to his desk after a week away from work. He was quick to point out that his sons retired before he did.
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How to cut the Social Security deficit - The Washington Post

By Robert Pozen

Liberals should not be fighting Social Security reform — they ought to be leading the charge for change, for a simple reason: The program is no longer progressive. Contrary to popular opinion, the structure of federal retirement programs today favors middle and high earners over less well-off retirees.

The notion of Social Security as progressive is based on the criterion of annual benefits received per dollar of contributions. By that measure, the program offers a more generous return to those who earn less and therefore contribute less.

But a more accurate measure of the program’s distributional impact is total lifetime benefits received by workers at different wage levels. By this standard, Social Security is not progressive because low-wage workers live on average a few years less than wealthier workers.
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Benefits Payable in Terminated Single-Employer Plans; Limitations on Guaranteed Benefits

Image via WikipediSUMMARY: This is a proposed rule to
amend PBGC’s regulation on Benefits
Payable in Terminated Single-Employer Plans. That regulation sets forth rules on PBGC’s guarantee of pension plan benefits, including rules on the phasein of the guarantee. The amendments implement section 403 of the Pension Protection Act of 2006, which provides that the phase-in period for the guarantee of  benefits that are contingent upon the occurrence of an ‘‘unpredictable contingent event,’’ such as a plant shutdown, starts no earlier than the date of the shutdown or other unpredictable contingent event.

DATES: Comments must be received on or before May 10, 2011.

ADDRESSES: Comments should be identified by Regulation Information Number (RIN 1212–AB18), and may be submitted by any of the following methods:

• Federal eRulemaking Portal: http://www.regulations.gov.
• Follow the Web site instructions for submitting comments.
• E-mail: reg.comments@pbgc.gov.
• Fax: 202–326–4224.
• Mail or Hand Delivery: Legislative and Regulatory Department, Pension Benefit Guaranty Corporation, 1200 K Street, NW., Washington, DC 20005–4026.

PBGC will make all comments available on its Web site, http://www.pbgc.gov.

Copies of comments also may be obtained by writing PBGC’s Communications and Public Affairs
Department (CPAD) at Suite 240 at the above address or by visiting or calling CPAD during normal business hours (202–326–4040).

FOR FURTHER INFORMATION CONTACT: John
H. Hanley, Director; Gail A. Sevin, Manager; or Bernard Klein, Attorney;
Legislative & Regulatory Department,
Pension Benefit Guaranty Corporation,
1200 K Street, NW., Washington, DC
20005, 202–326–4224. (TTY/TDD users may call the Federal relay service tollfree at 1–800–877–8339 and ask to be connected to 202–326–4224.)
Complete Federal Register Notice with Full Details

NIH Research Opportunity: Economics of Retirement

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HHS
Department of Health and Human Services
National Institutes of Health
Economics of Retirement (R01)
Grant
http://www07.grants.gov/search/search.do?&mode=VIEW&oppId=77793



HHS
Department of Health and Human Services
National Institutes of Health
Economics of Retirement (R03)
Grant
http://www07.grants.gov/search/search.do?&mode=VIEW&oppId=77794



HHS
Department of Health and Human Services
National Institutes of Health
Economics of Retirement (R21)
Grant
http://www07.grants.gov/search/search.do?&mode=VIEW&oppId=77813

The Retirement Crisis: Is the 401(k) To Blame? - CBS MoneyWatch.com

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By Charlie Farrell

Baby Boomers are waking up to the fact that many of them don’t have enough money saved for retirement. So what’s the cause of this retirement mess? A popular scapegoat is the 401(k) plan. But the 401(k) has little to do with it.

Consider that it’s not just Baby Boomer 401(k) plans that are coming up short. Most defined benefit pension plans are also underfunded, just look at the mounting liabilities for public pensions that are estimated at anywhere from $1 trillion to $3 trillion.

So what’s to blame for the lack of retirement preparedness? Two things: inadequate savings and risky investment strategies.

In general, you’ve got to save between 12% and 15% of pay every year if you want some reasonable chance of retiring on an income that is comparable to what you earned prior to retirement. And by every year, I mean every year from ages 25 to 65. It takes about 40 years worth of savings, not just a couple of years.
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Running Strong

Get your running shoes on and get ready to be inspired. Ida Keeling, a 95-year-old great-grandmother from the Bronx, set a sprinting world record with a time of 29.86 seconds in the 60-meter year dash last week in Manhattan. And this isn’t her first record-breaking time. Three years ago, Keeling set a record for the 90-and-over age group by running 50 meters in 31.80 seconds.

EU Will Begin to Monitor National Pension Systems

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Many countries in Europe are trying to strategically plan for baby boomers by adjusting their pension systems. Spain is the most recent to take on these measures, as the country raised the retirement age from 65 to 67.

Now, the European Union (EU) has agreed to monitor the pension systems of each country to ensure that they are being managed correctly and efficiently, reports IFAOnline.
 
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Over 90 & Loving It

Boomers Find 401(k) Plans Come Up Short - WSJ.com

By E.S. BROWNING

The 401(k) generation is beginning to retire, and it isn't a pretty sight.

The retirement savings plans that many baby boomers thought would see them through old age are falling short in many cases.

The median household headed by a person aged 60 to 62 with a 401(k) account has less than one-quarter of what is needed in that account to maintain its standard of living in retirement, according to data compiled by the Federal Reserve and analyzed by the Center for Retirement Research at Boston College for The Wall Street Journal. Even counting Social Security and any pensions or other savings, most 401(k) participants appear to have insufficient savings. Data from other sources also show big gaps between savings and what people need, and the financial crisis has made things worse.

This analysis uses estimates of 401(k) balances from the end of 2010 and of salaries from 2009. It assumes people need 85% of their working income after they retire in order to maintain their standard of living, a common yardstick.

Facing shortfalls, many people are postponing retirement, moving to cheaper housing, buying less-expensive food, cutting back on travel, taking bigger risks with their investments and making other sacrifices they never imagined.
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Immigration Reform: A Key Retirement Issue - The Best Life (usnews.com)

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By Philip Moeller

With Social Security and Medicare programs facing deficit-cutting proposals in the new Congress, seniors and their advocacy groups already have big issues on their plates. Yet a good case can be made that immigration reform is another emerging issue for millions of seniors who need care. The shifting outlook has several components—rising demand for care due to a growing elderly population, a sustained effort to provide elder care in homes rather than institutions, a shrinking work force of Americans, and an economic recovery that will eventually reduce the supply of family members available to provide unpaid care.

Full Article

Many Women in Canada's Pension and Retirement System Are FallingThrough the Cracks

By NEIL SCOTT, Postmedia News

A disproportionate number of women are falling through the many cracks in Canada's pension and retirement system, delegates at a conference in Regina were told Thursday.

Barb Byers, a vice-president of the Canadian Labour Congress (CLC) as well as former president of the Saskatchewan Federation of Labour, said major reforms are needed to the pension system to benefit both men and women.

Full Article

British Boomers Looking for Advice on Retiring Abroad

Many people entering their golden years have decided to move abroad to find a more affordable way to retire. However, one survey conducted by website Shelter Offshore has found that 42 out of 50 British expats lack confidence when it comes to financial planning, according to The Telegraph.

The study indicates that companies marketing to baby boomers may want to offer an organized and refined consulting approach to retiring abroad.

Full Article

Many Boomers Report No Savings; Debt, Retirement Challenges - AARP Bulletin

by: Carole Fleck from: AARP Bulletin

The generation that gave rise to Hula-Hoops, Woodstock and Jimi Hendrix is reaching America's traditional retirement age this year woefully unprepared. As the oldest of the boomers turn 65, they face a retirement that is unlikely to go as smoothly as their parents' did.

The lingering pain from the most severe recession since World War II is partly to blame. Many boomers are on the verge of ending their work lives without fully recovering fortunes lost in the housing and stock markets.
That translates to less money to fund their retirement years, which could stretch for three decades given that boomers can expect to live into their 90s.

A poll released Wednesday found that a whopping 25 percent of people ages 46 to 64 say they have no retirement savings — and 26 percent have no personal savings.

The situation is almost as grim for adults 65 and older: 22 percent have no retirement savings and 14 percent have no personal savings, according to the poll of 2,151 adults conducted in November by Harris Interactive.

Full Article

Fewer Workers Age 60 and Up Postponing Retirement

Image by Julie70 via Flickr
As the economy gradually recovers, some mature workers are feeling more comfortable about retiring now compared to last year at this time. According to a new survey from CareerBuilder, 65 percent of workers age 60 plus said they are putting off retirement because they can't afford to retire financially; down from 72 percent who said the same last year. The nationwide survey was conducted among more than 500 U.S. workers age 60 and up between November 15 and December 2, 2010.

More than one-in-four (28 percent) mature workers age 60 plus plan to retire within the next two years, while 27 percent are planning to retire in three to four years, and 18 percent in the next five to six years. Sixteen percent estimate it will be seven years or more before they can stop working, while one-in-ten workers (10 percent) don't think they'll ever be able to retire.

The primary drivers for postponing retirement are financial restraints, as indicated by 65 percent of respondents, and the need for health insurance and other benefits, as indicated by 58 percent of respondents. However, mature workers are staying on board at their companies for a variety of other reasons, including:

* Enjoy their job (39 percent)
* Enjoy where they work (36 percent)
* Fear retirement may just be boring (26 percent)
* Enjoy feeling needed (14 percent)

"It's encouraging to see that more workers have the option to retire if they want to, but there are still some who want to keep working at their companies for a variety of reasons," said Rosemary Haefner, vice president of human resources at CareerBuilder. "Twenty-two percent of workers age 60 and up that we surveyed said they have asked their employer to stay longer with the company, while 29 percent of companies said they are open to keeping workers on board a little longer.

Record number of pensioners still working | CARDI : Centre for Ageing Research and Development in Ireland

By Harry Wallop, Consumer Affairs Editor, The Telegraph - United Kingdom

A record number of people are still working beyond the age or retirement, according to official statistics, which suggested the recession has forced people to work far longer than they used to.

Nearly one in every eight men – or 11.7 per cent – of men aged 65 or over, and 12.3 per cent of women aged 60 or over are still working, according to the Office for National statistics.

These are the highest rates since records began and compare against rates of between 7 or 8 per cent throughout the 1990s.

The figures suggest that thousands of pensioners are going back to work to fund their slim incomes, or that they are not in a financially strong enough position to retire in the first place. Some are also actively choosing to work longer, because of better health and a desire to keep active.

They are the latest data to demonstrate how the recession has changed the face of Britain's workforce, leading to far more part-time workers and older workers, while leaving many more young people out of work.

The ONS figures also showed that the average age of retirement has significantly increased in recent years and hit a new record. The average age for men was 64.7 years during 2010, up from 63 in 1996. Women left the workplace when they were 62.5 years old, on average – a full two years after the official retirement age, and up from 60.6 in 1996.

Full Article

Europe's Economy to Undergo Vast Changes with Aging Population

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The aging population of baby boomers in Europe has many implications, but one of the most important is the way that this demographic will impact national economies. Experts are predicting that a significant loss of workforce coupled with high unemployment and deficit, many countries will completely restructure, according to The Guardian.

The prediction, coined "declinology," is a relatively new concept. Literature and studies are now being released that reveal that China, India and Brazil, with their growing populations, will likely surpass Europe in terms of economic power.

This is largely due to a lack of future workers in European countries - a recent report released by the bank HSBC has found that birth rates in the continent are too low to replace aging baby boomers in the workforce, according to The Telegraph.
Full Article