August 2023
18Aug

How to protect your retirement assets from inflation: Morningstar

Inflation is a buzzkill for personal finances, lowering the value of your savings and raising your spending levels. That’s especially an issue for retirees, who often have limited resources and may need them to last a long time. While inflation peaked in June 2022 at 9.1%, it still stood at 3.2% in July. That’s well above the Federal Reserve’s target of 2%. Christine Benz, director of retirement planning for Morningstar, has offered commentary on how to protect your retirement assets. At the portfolio...

August 18, 2023
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July 2023
23Jul

COVID-19, Home Equity and Retirement Funding

By Vishaal Baulkaran & Pawan Jain  We investigate the impact of COVID-19 on using home equity to fund retirement income. We show that financial planners believe that COVID-19 positively influenced their clients’ willingness to utilize home equity products to fund retirement income in particular, sell and downsize and HELOC options. For consumers, COVID-19 does not seem to have a major impact on the outlook on residential property, retirement income, retirement plan, or perceived/actual standard of living during retirement. However, there...

July 23, 2023
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23Jul

Early Retirement Provision for Elderly Displaced Workers

By Herman Kruse & Andreas Steinvall Myhre This paper studies the economic effects on re-employment and program substitution behavior among elderly displaced workers who exogenously lose eligibility for their early retirement option. We use detailed Norwegian matched employer-employee data containing information on bankruptcy dates and individual income, wealth, pensions and social security benefits. As job displacement before a certain age cut-off results in the loss of eligibility for early retirement benefits between ages 62–67 years in Norway, we are able...

July 23, 2023
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23Jul

Strengthening Retirement Income Security: Fairer Tax Rules and More Options Needed

By Alexandre Laurin & George Turpie  Simple changes to tax rules can improve retirement security for Canadians, as well as make the retirement system more equitable among different classes of savers, and more efficient at managing longevity risks for capital decumulation. This E-Brief provides a discussion of needed retirement-related tax changes impacting members of capital accumulation plans, such as RRSPs and defined-contribution (DC) plans, divided into the accumulation and decumulation phases. Among the key tax changes recommended for the accumulation phase:...

July 23, 2023
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21Jul

Racial and Ethnic Disparities in Retirement Outcomes: Impacts of Outreach

By Angelino Viceisza, Amaia Calhoun & Gabriella J.O. Lee We review select literature on racial and ethnic disparities in retirement outcomes in the United States and the impact of outreach on such outcomes. First, there are significant disparities in retirement outcomes, reflecting a long history of racism and structural barriers. Second, there is comparatively little work on the differential impact of retirement outreach across race and ethnicity. Future work should consider designing interventions that cater to the needs of specific...

July 21, 2023
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21Jul

US. Many Gen-Xers have zero retirement funds. What can we do to address America’s retirement crisis?

Gen-Xers, those born between 1965 and 1980, are falling behind when it comes to saving for retirement. The typical household holds only $40,000 in retirement savings, according to a new report from the National Institute on Retirement Security. The issue is exacerbated when you break down savings by income level and race. The bottom half of earners only have a few thousand in savings, while 40% of Gen-Xers have retirement savings accounts with zero balances. The report explained that Gen-Xers have...

July 21, 2023
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07Jul

The 2021 Ageing Report: Underlying Assumptions and Projection Methodologies

By Directorate-General for Economic and Financial Affairs & Economic Policy Committee With a view to ensuring the sustainability of public finances in the EU, the ECOFIN Council charged the Economic Policy Committee (EPC) with producing a new set of long-term budgetary projections by 2021, on the basis of new population projections to be provided by Eurostat. Safeguarding the sustainability of public finances requires that the analysis is based on reliable, comparable information on possible challenges to fiscal sustainability, including strains...

July 7, 2023
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07Jul

Health Capacity to Work and Retirement Expectations

By Italo Lopez Garcia, Nicole Maestas & Kathleen J. Mullen Understanding how health influences retirement is fundamental for the design of targeted policies that encourage working longer. While there is wide agreement on the relevance of age-related health decline for determining retirement decisions, the process remains a black box. This paper explores the match between individuals’ functional abilities and job demands in the national economy using a new methodology to measure work capacity. Specifically, we construct a measure of work...

July 7, 2023
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June 2023
30Jun

Optimal Retirement Portfolios with Fixed and Variable Longevity Annuities in Defined Contribution Plans taking Social Security into Account

By Vanya Horneff, Raimond Maurer & Olivia S. Mitchell  This paper examines how two instruments—annuities with lifelong benefits purchased using defined contribution (DC) plan assets, and social security annuities—should be considered jointly to optimize household lifetime wellbeing. Understanding how these interact is of key importance in order to generate efficient retirement portfolios. Additionally, there is likely to be substantial heterogeneity in the demand for longevity annuities across the retiree population, depending on their assets inside and outside tax-qualified retirement plans,...

June 30, 2023
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21Jun

How can you know how much to save for retirement when the goalposts keep moving? Here’s a guide.

When it comes to preparing financially for retirement, Jessica Howard is wise beyond her years. “I absolutely am planning,” said Howard, 27, a Los Angeles-based care manager who schedules medical appointments and home health care for older adults.”“I have a drive to save for retirement because…I see 12 hours a day what can happen when people don’t properly save vs. when they’re fiscally smart.” If only all Americans had the drive and wherewithal to set themselves on a solid path toward...

June 21, 2023
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