January 2021

21Jan

US. Pandemic Puts More Households at Risk in Retirement

The National Retirement Risk Index (NRRI), calculated every three years, measures the share of American households that are at risk of not being able to maintain their pre-retirement standard of living in retirement. “Since the Great Recession, the NRRI has shown that even if households work to age 65 and annuitize all their financial assets, including the receipts from reverse mortgages on their homes, roughly half of households are at risk,” according to the Center for Retirement Research at...

January 21, 2021
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14Jan

Maximizing Utility of Withdrawals in Retirement and the Efficiency of Required Minimum Distributions

By Chester Chambers We focus on a simplified problem for a risk-averse retiree seeking to maximize utility associated with annual spending and a remaining value at the end of the problem horizon when the funds are extracted from a portfolio that includes a risk-free and a risky asset. To organize discussions about this setting we utilize a novel metric which we label “Efficiency”. This measurement compares the utility derived from annual withdrawals and the final value with a benchmark...

January 14, 2021
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14Jan

How Poor Bangladeshi Households Behave Regarding Access to Commitment Savings Products

By Carolina Laureti, Mélanie Volral Access to commitment savings products is known to increase poor households’ savings. In this paper we analyze the process through which households change their savings behavior, by exploiting a unique dataset released by SafeSave, a Bangladeshi microfinance institution that launched the Long Term Savings commitment product in 2009. First, we find that households increase their savings a few months before they open the commitment product. Then, distinguishing early takers (who take up the commitment...

January 14, 2021
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08Jan

How Measuring Replacement Income Can Aid Assessment of Public Pension Plans

Pew evaluates a key predictor of career workers’ standard of living in retirement. The Pew Charitable Trusts uses three retirement security metrics to assist policymakers in evaluating how well their plans are expected to prepare public workers for retirement. This fact sheet focuses on the replacement income ratio, a commonly cited indicator that illustrates whether a worker might expect to maintain his or her standard of living in retirement.1 This ratio—also referred to as the replacement rate—is the percentage of a worker’s...

January 8, 2021
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06Jan

The Informal Economy and its Relation to Global poverty

The informal economy, also known as the informal sector, is the diversified set of economic activities, enterprises, jobs and workers that are not regulated or protected by the state. The definition of the informal economy has also recently expanded to include wage employment in unprotected jobs, such as daily wage jobs. However, generalizations of the informal economy often include terms such as “illegal” or “black market.” On the contrary, the vast majority of informal workers simply attempt to earn an honest...

January 6, 2021
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December 2020

23Dec

Understanding Debt in the Older Population

By Annamaria Lusardi, Olivia S. Mitchell, Noemi Oggero Poor financial capability can erode well-being in later life. To explore debt and debt management among older Americans, age 51-61, we designed and analyzed a new module in the 2018 Health and Retirement Study along with information from the 2018 National Financial Capability Study. Even though this group should be at the peak of their retirement savings, it nevertheless carries debt due to student loans and unpaid medical bills; having children...

December 23, 2020
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18Dec

Study: Over 142 million people aged 60 years are unable to meet their basic daily needs

At least 14% of all people aged 60 years and over ̶ more than 142 million people ̶ are currently unable to meet all their basic daily needs according to the Baseline report for the Decade of Healthy Ageing, released by the World Health Organization today. Read also UN organizations launch new initiative to improve the lives of older people The Baseline report brings together data available for measuring healthy ageing, defined by WHO as "the...

December 18, 2020
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15Dec

Malta. Three in ten pensioners at risk of poverty

The proportion of pensioners at risk of living in poverty in Malta is increasing year on year, reaching 29.1 per cent of over 65s last year. And older women are more likely to teeter on the brink of poverty due to having to rely solely on their husband's pension. While all other age groups have seen a reduction in poverty since 2013, those aged over 65 have seen an increase. The latest details were revealed in an evaluation of...

December 15, 2020
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14Dec

Ireland. A new model for pensions required

Sir, – Reading of the restoration of pension payments to 4,000 of the highest-paid public office-holders and pay increases for judges under the public pay agreement is infuriating. One wonders why these are being restored at all during a crisis, with unprecedented public spending commitments to compensate thousands who have lost their jobs and livelihoods during the pandemic. We are also informed that a number of senior HSE executives will receive lump-sum payments of €300,000 upon retirement and annual...

December 14, 2020
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11Dec

The Age Profile of Life-Satisfaction after Age 65 in the U.S

By Péter Hudomiet, Susann Rohwedder Although income and wealth are frequently used as indicators of well-being, they are increasingly augmented with subjective measures such as life satisfaction to capture broader dimensions of individuals’ well-being. Based on data from large surveys of individuals, life satisfaction in cross-section increases with age beyond retirement into advanced old age. It may seem puzzling that average life satisfaction would be higher at older ages because older individuals are more likely to experience chronic or...

December 11, 2020
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