Retirement Crisis Research Articles

The retirement crisis of South African Dutch Reformed ministers: An empirical study

There has been a backlash from recently graduated proponents of the Dutch Reformed Church of South Africa that they are unemployed not just because of dwindling church member numbers, but mainly because contract posts are being filled by retired ministers and not by the proponents. International research suggests that the reason retired ministers continue working is not necessarily because they want to, but because they do not have sufficient retirement savings. The aim of this study was to examine the perceptions of Dutch Reformed ministers who would reach retirement age within the next 5 years, in an effort to establish their preparedness for retirement. The respondents were sent a link to an online questionnaire and 147 useable questionnaires were returned, representing a response rate of 47.7%. The results indicated that almost half of the respondents stated that they would want to continue working in a part-time ministerial post after retirement and that the ministers’ motivation to continue working was directly linked to their lack of financial provision for retirement. A major cause for concern is the high number of respondents who selected the ‘uncertain’ response option for most of the retirement questions, as they are so close to retirement. An intervention to incorporate financial management specifically in theological training is urgently needed.

How a New Bond Can Greatly Improve Retirement Security

There is a growing retirement crisis and most of the focus has been on the fact that individuals are not saving enough for retirement, may not have access to pension schemes, or are financially illiterate. However, the bigger issue might be that the assets/financial products available to investors, including those that offer legal protection to plan sponsors, may not be appropriate for the typical individual saving for retirement. As Merton (2014) notes, the model adopted to plan for retirement for the majority of the population focuses on wealth at retirement as opposed to the level of retirement income that an individual can earn. As a result, current assets and products are risky from a retirement income perspective. All else equal, individuals retiring a few years apart can have vastly different retirement income outcomes (making retirement outcome a function of one’s conception date). A new bond has been proposed to improve retirement security – with a forward-start (tied to date of retirement), income-only (as individuals need steady income), real cash flow stream (linked to appropriate indices), for a fixed period (tied to average life expectancy). This paper examines standard portfolio choices (60/40, target date funds), along with holding this new bond in isolation, from a retirement income perspective to demonstrate how this new bond, either individually or when used in standard portfolio choices could greatly improve retirement outcomes. The paper concludes with a Monte-Carlo simulation that further validates the value of this new bond given the potential risks to all investment choices given future equity, interest rate and inflation scenarios.

Is There a Retirement Crisis? Examining Retirement Planning in the Household and Government Sectors

In response to a widespread perception that households are undersaving for retirement, policymakers have proposed expanding Social Security and establishing supplementary retirement saving plans run by state governments. But these proposals take place against a background of record-high unfunded liabilities for government-run retirement programs. If government entities have either financial or political difficulty funding their existing obligations to retirees, shifting greater retirement provision from households to government could potentially worsen existing shortfalls in broad retirement saving. This paper reviews a range of studies of the adequacy of household saving, comparing estimated dollar savings shortfalls with unfunded liabilities in Social Security, in federal employee and uniformed military pensions, and in state and local government retirement plans. Even the most pessimistic forecasts of household undersaving fall short of the most optimistic estimates of government retirement plan underfunding. It appears that, on average, households are doing at least as well in saving for retirement as governments are in funding retirement plans on households’ behalf.

Practical Applications of Defined Contribution Retirement Plans Should Look and Feel More Like Defined Benefit Plans

<h3>Practical Applications Summary</h3> Defined contribution (DC) retirement plans have largely replaced defined benefit (DB) pension plans, but DC plans, which were designed to be supplements to pensions, aren’t currently positioned to solve the looming retirement crisis in the United States. In <b>Defined Contribution Retirement Plans Should Look and Feel More Like Defined Benefit Plans</b>, <b>Antti Ilmanen, David Kabiller</b>, and <b>Rodney Sullivan</b> of <b>AQR</b> and <b>Laurence Siegel</b> of the <b>CFA Institute Research Foundation</b> show that DC retirement plans, as they currently stand, are inadequate to meet the challenges of our looming retirement crisis. They describe how the addition of features borrowed from DB plans can help DC plans improve retirement outcomes through better risk management and improved diversification of portfolios.

Is Retirement a Crisis for Men? Class and Adjustment to Retirement

Because paid work is taken to be central to manhood, scholarly and popular discourse have characterized retirement as presenting a “crisis of masculinity.” However, such a crisis is not borne out by research, perhaps because scholars have not considered how class might shape masculinities and thus expectations and experiences of retirement. Using data obtained from interviews with Finnish metal workers and engineers who are either approaching retirement or recently retired, we ask whether (1) this crisis discourse is reflected in their retirement expectations, (2) it matches their actual experiences of retirement, and (3) retirement disrupts the masculinities of some class groups more than others. We find evidence of this retirement crisis discourse in our respondents’ views of retirement, but not in their actual experiences, belying the homogeneity of masculinity implied by it. Class shapes both the perceived content of crises and the actual retirement experiences.

The Present Retirement Crisis and How Social Workers Can Respond

ABSTRACTResearch on Americans’ retirement readiness indicates a wide range of preparedness for the golden years. Called a “crisis” by researchers, retirement for some may include significant choices: continued employment or utilization of social welfare services. This article describes factors contributing to the retirement crisis and roles social workers can play in assisting older retirees. Disparity in household retirement savings exists by ethnicity. On the front lines serving aging individuals and their families, social work professionals are well situated to collaborate with individuals, and other providers, to address financial, social and emotional pillars necessary in facilitating a safe and secure retirement.

Practical Applications of Addressing the Retirement Savings Crisis in the United States: The Role of Employer-Provided Financial Education

Researchers, policymakers, workers and employers continue to grapple with how to respond to the ongoing retirement crisis in the United States, one that’s likely to hit middle-income earners hardest, according to <b>Barbara Smith</b>, a senior economist in the <b>Office of Retirement Policy at the Social Security Administration</b>. In <b><i>Addressing the Retirement Savings Crisis in the United States: The Role of Employer-Provided Financial Education</i></b>, Smith examines a number of studies that measure the effectiveness of financial education programs. She concludes that there is indeed strong evidence for the effectiveness of workplace-provided financial education. Smith described her work and several key findings in this interview with <b><i>Institutional Investor Journals</i></b>. <b>TOPICS:</b>Retirement, legal/regulatory/public policy, in wealth management

Allowing States to Help Workers Save for Retirement Department of Laborrs Proposed Rulemaking That Provides a Safe Harbor for State Savings Programs under ERISA

There is a “retirement crisis” in America. Even though some would view this as hyperbole, the empirical evidence reflects that “[t]he average working household has virtually no retirement savings” and that the “collective retirement savings gap among working households age 25-64 ranges from $6.8 to $14 trillion.” Contributing to this crisis is that fact that almost 70 million Americans do not have access to a retirement savings plan through their employers. This problem is more prevalent in the small business community; more than half of small business employers do not offer a retirement plan to their employees. Research reflects that an important predictor for retirement readiness is participation in an employee benefit plan – employees save more in a workplace plan than they would on their own. For example, even though there are a number of non-employer based retirement savings options, such as IRAs, few workers utilize them. States, concerned with the economic stability of their citizens, have created laws that require private sector employers to implement in their workplaces state-administered payroll deduction savings programs. Even though many states are currently debating whether to adopt the programs, this Article will focus on California, Illinois and Oregon, who have enacted laws creating payroll deduction savings programs. One obstruction to wider adoption of such measures at the state level has been uncertainty about the effect of the Employee Retirement Income Security Act’s (ERISA) broad preemption of state laws that “relate to” private sector employee benefit plans and ERISA’s prohibition on requiring employers to offer employee benefit plans. To remedy this problem, the Department of Labor (DOL) has published a Notice of Proposed Rulemaking (NPRM) that would make clear “that state payroll deduction savings programs with automatic enrollment that conform to the safe harbor in [the] proposal do not establish ERISA plans.” This Article begins by discussing the current law concerning ERISA's preemption of state laws that “relate to” private sector employee benefit plans and provides a discussion of DOL’s proposed rulemaking that provides a safe harbor for state payroll deduction savings programs. The Article then transitions into an examination of the current state-based initiatives, analyzes specific state legislative proposals under the requirements of the proposed rulemaking and proposes what, if any, changes need to be made to the state payroll deduction savings programs to ensure that the programs will not run afoul of ERISA. The Article concludes by analyzing policy concerns regarding state payroll deduction savings programs, provides comment on the DOL proposed rulemaking and provides additional elements of a model state payroll deduction savings program.

Retirement Security 2015: Roadmap for Policy Makers - Americanss Views of the Retirement Crisis

A new nationwide public opinion research report finds that an overwhelming majority of Americans – 86 percent – believe the nation faces a retirement crisis.These findings are contained in a new research report, Retirement Security 2015: Roadmap for Policy Makers Americans’ Views of the Retirement Crisis.More specifically, the research finds that:1. An overwhelming majority of Americans believe there is a retirement crisis. Some 86 percent agree that the nation faces a retirement crisis, and 57 percent strongly agree there is a crisis.2. Three in four Americans remain highly anxious about their retirement outlook, but the concern has dissipated slightly as the economy has recovered. Some 74 percent of Americans percent say they are concerned, down from 85 percent as reported in the 2013 study.3. Even though Americans feel slightly less stressed about their retirement prospects, support for steady and reliable retirement income from a pension is high and growing. In fact, 82 percent say a pension is worth having because it provides steady income that won’t run out, while 67 percent of Americans indicate they would be willing to take less in pay increases in exchange for guaranteed income in retirement.4. Americans continue to feel that leaders in Washington do not understand their struggle to save for retirement, and they strongly support efforts by states to set up retirement plans for those workers without access to an employer sponsored plan. Some 87 percent of Americans say Washington policymakers do not understand how hard it is to prepare for retirement, while 84 percent say Washington needs to do more to help ensure retirement security.5. Americans see retirement benefits as a job feature that is almost as important as salary. Salary is viewed as important by 75 percent of American, and retirement benefits are close behind at 72 percent.6. Americans express strong support for pensions for public employees. Few Americans realize that 75 percent of public pension costs are paid for with employee contributions and investment returns. Some 87 percent of Americans say pensions are a good way to recruit and retain qualified teachers, police officers and firefighter. But, only one-fourth of Americans understood that public employers pay for 25 percent or less of public pension costs. More than eight out of ten — a vast majority of Americans — say that all employees, not just the public sector, should have a pension. Some 87 percent of Americans say pensions are a good way to recruit and retain qualified teachers, police officers and firefighters.7. Protecting Social Security benefits is increasingly important. Some 73 percent of Americans say it’s a mistake to cut government spending in such a way as to reduce Social Security benefits for current retirees, up from 67 percent in 2013. When it comes to benefits for future generations, 69 percent oppose cutting government spending that reduces Social Security benefits. Americans are divided when it comes to increasing the amount of Social Security benefits by delaying the withdrawal of benefits at an older age: 42 percent agree with a delay while 52 percent disagree.This biennial nationwide public opinion research is the fourth poll that measures how Americans feel about their financial security in retirement and assesses their views on policies that could improve their retirement outlook. It is intended to serve as a tool for policymakers, thought leaders and retirement service providers as they work to stem the retirement crisis and re-fortify the U.S. retirement infrastructure.The polling was conducted by Greenwald & Associates as a nationwide telephone interview of 801 Americans age 25 or older. The data was balanced to reflect U.S. demographics for age, gender, and income. The margin of error is plus or minus 3.5 percent.

Falling Short: The Roots of the Coming U.S. Retirement Crisis

Few presidential candidates seem to understand the nature of the coming retirement crisis in America. It’s important to understand the many factors that are putting millions of Americans in jeopardy as they reach old age.

The Forecast for Special Libraries

ABSTRACTSpecial libraries exist in an ecosystem consisting of the information industry, the library world, their own organizations, and workforce demographics. Librarians need to be aware of the trends shaping all of these facets. This column takes a close look at Outsell's Information Industry Outlook report for 2016 and its implications for special libraries. The outlook for special libraries is neither the previously forecast Baby Boomer retirement crisis nor the dire end of special libraries many feared during the recent recession. Instead, the special library world is transforming, creating both challenges and opportunities for special librarians. Millennials entering both the workforce at large and the library workforce will make their presence known. Savvy information professionals will stay on top of these trends and find their niche, whether in a traditional physical library or in emerging careers outside the library.Column Editor’s NoteSpecial libraries share concerns with their more general academic, public, and school counterparts, but they also have unique characteristics and concerns which merit separate consideration. Libraries of all types are evolving, and just as special libraries can learn from the general literature on libraries, practitioners in all types of libraries can learn from the experiences and best practices of special libraries. “The Specialist,” appearing in even-numbered issues of this journal, addresses the administrative concerns of special libraries. The column's scope is a broad umbrella of specialized librarianship and includes corporate, non-profit, government, and independent libraries as well as the specialized departments and branches of academic and public libraries. Contributions from practitioners and scholars on any aspect of special libraries are welcome. Interested authors are invited to contact the editor at tmurray@stamps.org for submission guidelines.

U.S. Retirement Policy Considerations for the 21st Century

Despite a lively debate over whether U.S. workers face a retirement crisis, no one denies that facets of our retirement system could be improved. A constructive discussion should focus on who is at risk and what policies might ameliorate the problems they face. To the extent that older workers have inadequate saving to meet their retirement needs, proposals to increase savings rates would likely offer little relief. For low earners, who are particularly at risk, higher savings rates may impose real hardship and may be ineffective in ameliorating retiree poverty. Home health care and long-term care expenses pose a special risk to people who live to advanced ages, but this is largely a problem of insurance rather than retirement saving inadequacy. Bolstering Social Security for low earners is the surest way to provide them retirement income security. Widening retirement savings opportunities for workers through broader employer sponsorship of plans with modern behavioral features that encourage participation, reasonable savings levels, and efficient investment opportunities will improve the retirement security of other segments of the workforce.

The Most Basic Missing Instrument in Financial Markets: The Case for Forward Starting Bonds

There is a looming retirement crisis globally with the three pillars of retirement threatened because of insufficient funding, improper investment decisions, and transferring risk to individuals who are least capable of bearing such risk. This paper argues that the introduction of a unique financial instrument, basically an inflation linked bond which pays coupons when you need it, might help ameliorate this crisis. The Life Cycle Hypothesis (LCH) demonstrated why people save; namely, they try to set aside resources during their working lives, to be able to tap into them to ensure retirement income when labor income stops. Modern Portfolio Theory (MPT) attempted to help individuals make optimal investment decisions on these savings by investing in stocks, bonds and other assets to ensure sufficient retirement wealth. There are three problems with using MPT approaches for retirement planning: (a) MPT ignores the uses of funds; (b) focuses on wealth as opposed to retirement income maximization; and (b) none of these assets is an ideal hedge for a desired retirement income. As a result, seemingly safe MPT assets are risky from a retirement income perspective (because the Capital Asset Pricing Model (CAPM) is a specific case of a more general Relative Asset Pricing Model (RAPM)). The need for our bond is simple: the riskless retirement asset is an inflation-indexed, coupon-only bond that defers payment until retirement and pays till death. All attempts to recreate this profile through traditional stocks and bonds, or purchase such a profile through annuities are sub-optimal, risky, complex or expensive thereby threatening retirement security. The paper goes further to demonstrate that there is a potentially willing supplier of such bonds, and that this bond offers the perfect offsetting cash flow profile to infrastructure projects, thereby completing the market. It also addresses challenges, issues and opportunities surrounding such an instrument and examines issues relating to the creation of a market for FSBs.

Ready or Not-Retirement Looms Near for Boomer Nurses.

Nursing has been identified as one of the top 20 occupations that will be affected by baby boomer retirements. Boomer nurses, born between 1946 and 1964, have begun leaving the profession at an alarming rate. This nursing exodus is occurring at a time when demand for nurses is very high, the nursing shortage continues throughout the country, and financial forecasts predict very difficult financial times ahead for boomer nurses. A literature review was conducted on research on retirement planning, habits and beliefs of boomer nurses, and the market forces that affect retirement savings. Boomer nurses will face an unprecedented retirement crisis because they simply have not saved enough for a secure financial future after their retirement from the profession. The case studies and recommendations in this article suggest that there are actions nurses at all ages can take to improve their retirement savings. Johnson Morrissey.

Book Review: Social Insecurity: 401(k)s and the Retirement Crisis, by James W. Russell

Book Review: <i>Social Insecurity: 401(k)s and the Retirement Crisis</i>, by James W. Russell

Social insecurity: 401(k)s and the retirement crisis

Social insecurity: 401(k)s and the retirement crisis

Workforce

The nursing profession is facing a huge retirement crisis, says James Buchan

The Role of Human Resources in Retirement Systems: A New Area for Research

A retirement crisis looms in the US and the rest of the world. Major shortfalls are anticipated in public pension programs due to an aging populace and the shift to defined contribution programs. A...

Retirement Crisis in the United States

The great 30-year experiment in 401(k) and similar retirement financing schemes that depend on stock market investments has failed. Even before the stock market crisis of 2008, the signs were every...

The Future Shock of Retirement

Over the past decade or more, discussions about a possible retirement crisis have ranged from “doomsday” to “no crisis at all.” An emerging body of literature paints a relatively benign retirement outlook for American workers. In our opinion, however, many of the assumptions upon which this literature depends are inconsistent with current trends. For example, if we make our own informed forecasts about the future of public benefits, principally Medicare and Social Security, and critically examine the assumptions made by other observers about housing wealth, the retirement picture becomes less favorable. In this article we explore potential “future shocks” to the American retirement system and what they would mean to the post-retirement living standards for Americans on the doorstep of retirement. These conclusions can be generalized to later cohorts of retirees. Our article has three objectives. First, we examine the current state of American retirement. Second, we assess the fragility of the retirement system by modeling the retiree’s “economic” (market value) balance sheet, performing a sensitivity analysis to evaluate the consequences of potential shocks or surprises affecting the retiree’s key assets and liabilities. One conclusion of our research is that the variability of retirement preparedness, across individuals, will increase significantly as a result of these potential shocks. Third, we discuss strategies that retirement plan fiduciaries and individuals can implement today to help guard against the increasing instability of retirement. <b>TOPICS:</b>Retirement, social security, wealth management