8 New Social Security Bills in Congress Now

Link:https://www.thinkadvisor.com/2022/04/21/8-new-social-security-bills-in-congress-now/

Excerpt:

Rep. Pramila Jayapal, D-Wash., chair of the Congressional Progressive Caucus, pressed House leaders Tuesday to pass the Social Security 2100: A Sacred Trust Act, H.R. 5723, which adopts the consumer price Index for the elderly as the basis of the annual cost-of-living adjustment (COLA) and applies the payroll tax to annual wages above $400,000.

“I wish to indicate our strong support for H.R. 5723 – Social Security 2100: A Sacred Trust and encourage its prompt floor consideration this Congress,” Jayapal told House Speaker Nancy Pelosi, D-Calif., on Monday in a letter.

The bill, Jayapal wrote, “increases benefits across the board at a time of higher inflation, protects low-income seniors, widows and widowers, ends wait-times for those with disabilities needing support and more. Crucially, it is paid for by making millionaires and billionaires pay the same rate as everyone else by ensuring the payroll tax is applied to wages above $400,000.”

She urged Pelosi to move the bill to a vote in the House “as soon as possible.”

Author(s): Melanie Waddell

Publication Date: 21 April 2022

Publication Site: Think Advisor

Why Retirement Isn’t Necessarily the Same as Not Working

Link: https://www.thinkadvisor.com/2022/03/07/why-retirement-isnt-necessarily-the-same-as-not-working/

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If you claim Social Security at age 70 instead of 62 the sum total of your accrued benefits will be 17% higher if you make it to age 82 (which is the male life expectancy at 62). And remember that’s low risk, inflation-indexed income; there’s no better deal on the market.

Of course, delaying benefits means fewer years collecting them, but if you end up living to your early 80s you’ll come out ahead. The figure below plots how much you’ll get from Social Security (inflation-adjusted and discounted using today’s TIPS curve) at each age depending on when you retire.

And if you already claimed Social Security you can still change your mind and get higher benefits.

But if you are already retired (or resolved on it this year) and the market is down, it may seem like delaying Social Security isn’t an option. After all, you still need to eat.

Author(s): Allison Schrager

Publication Date: 7 Mar 2022

Publication Site: Think Advisor

9 Ways to Strengthen Social Security

Link: https://www.aarp.org/retirement/social-security/info-2022/benefits-current-status-future-stability.html

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How did we get here? ​​As long predicted, demographics explain a good deal: In a decade, the entirety of the boomer generation — some 70 million Americans born between 1946 and 1964 — will have hit retirement age. As a result, the number of people receiving Social Security benefits come 2034 will be more than double the beneficiaries in 1985. ​​

But what wasn’t known as accurately was how much longer those boomers would live. “From 1940 to 2019, life expectancies at age 65 have increased by about 6.5 years,” says Amy Kemp, chair of the Social Security Committee of the American Academy of Actuaries.

The impact: Many workers will be receiving benefits for a longer period of time. And those with higher incomes, which are generally those who receive higher benefit amounts, tend to live longer on average. ​

Author(s): John Waggoner

Publication Date: 1 March 2022

Publication Site: AARP

2021 Academy Legislative/Regulatory Review

Link: https://www.actuary.org/sites/default/files/members/alerts/pdf/2022/2022-CP-1.pdf

Excerpt:

The American Academy of Actuaries presents this summary of select significant regulatory and
legislative developments in 2021 at the state, federal, and international levels of interest to the U.S.
actuarial profession as a service to its members.

Introduction

The Academy focused on key policy debates in 2021 regarding pensions and retirement, health, life,
and property and casualty insurance, and risk management and financial reporting.


Responding to the COVID-19 pandemic, addressing ever-changing cyber risk concerns, and analyzing
the implications and actuarial impacts of data science modeling continued to be a focus in 2021.


Practice councils monitored and responded to numerous legislative developments at the state, federal,
and international level. The Academy also increased its focus on the varied impacts of climate risk and
public policy initiatives related to racial equity and unfair discrimination in 2021.


The Academy continues to track the progress of legislative and regulatory developments on actuarially
relevant issues that have carried over into the 2022 calendar year.

Publication Date: 15 Feb 2022

Publication Site: American Academy of Actuaries

Boomers Who Left Jobs During Pandemic Aren’t Claiming Social Security: Study

Link:https://www.thinkadvisor.com/2021/12/30/boomers-who-left-jobs-during-pandemic-arent-claiming-social-security-study/

Excerpt:

The research showed that the rate at which older workers left employment increased dramatically during the pandemic. 

This was especially the case with women — an 8-percentage-point increase vs. 7 points for men; Asian Americans — a 13-point increase; those with less than a college degree — a 10-point increase; and workers with occupations that did not lend themselves to remote work.

….

There was one exception: Workers 70 and older were 5.9 percentage points more likely to leave the workforce and retire. The study noted that these workers were likely already receiving Social Security benefits, so claiming did not markedly increase.

Among all workers 55 and older, the monthly claiming rate for Social Security benefits remained constant between April 2019 and June 2021, the researchers found.

Author(s): Michael S. Fischer

Publication Date: 30 Dec 2021

Publication Site: Think Advisor

Has COVID Affected Pensions for Workers without Social Security?

Link:https://crr.bc.edu/briefs/has-covid-affected-pensions-for-workers-without-social-security/

PDF: https://crr.bc.edu/wp-content/uploads/2022/01/SLP81.pdf

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At the outset of the pandemic recession, many feared it would undermine workers’ employer-sponsored retirement plans.

State and local employees who are not covered by Social Security would have been particularly vulnerable, as they lack the buffer this program offers.

Their employer defined benefit plans would have been hurt by a long recession with poor investment returns and reduced contributions due to tax shortfalls.

Instead, these plans exceeded their return targets; tax revenues held up; and government sponsors got stimulus aid, so plan funded ratios actually improved.

And long-term structural headwinds such as negative cash flows and aggressive return targets still pose little risk to their ability to pay future benefits.

Author(s):Jean-Pierre Aubry and Kevin Wandrei

Publication Date: January 2022

Publication Site: Center for Retirement Research at Boston College, Working Paper

Increase in UK state pension age to 68 could come eight years early

Link:https://www.theguardian.com/money/2021/dec/15/increase-uk-state-pension-age-68-could-come-eight-years-early-review

Excerpt:

Millions of people born in the 1970s may have to wait longer to collect their UK state pensions if a government review, which was announced this week, recommends bringing forward plans for a retirement age of 68.

The state pension age rose to 66 last year, with two further rises planned, meaning that by 2046 those born on or after April 1977 would need to wait until 68 before they can draw the benefit.

However, the review will look at bringing forward that change by eight years, so that the increase is phased in between 2037 and 2039.

Author(s): Hilary Osborne

Publication Date: 15 Dec 2021

Publication Site: The Guardian

Income Sources of Older Households: 2017

Link:https://www.census.gov/library/publications/2022/demo/p70br-177.html?utm_medium=email&utm_source=govdelivery

PDF: https://www.census.gov/content/dam/Census/library/publications/2022/demo/p70br-177.pdf

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This report examines older households’ sources of income, the amounts of this income, and how much each source of income contributes to total income. Older households receive income from a variety of sources, including social programs, private retirement savings, and earnings. Estimates from the 2018 Survey of Income and Program Participation (SIPP) show that in 2017, lower-income households relied on Social Security to a large degree, while higher-income households received a larger share of their income from private retirement savings and earnings. 

Author(s): DANIEL THOMPSON AND MICHAEL D. KING

Publication Date: Feb 2022

Publication Site: U.S. Census

State pension system is unsustainable, says Heather Humphreys

Link:https://www.irishtimes.com/news/politics/state-pension-system-is-unsustainable-says-heather-humphreys-1.4792791

Excerpt:

The State pension system is “not sustainable” and there is “no getting away from that fact”, Minister for Social Protection Heather Humphreys has said.

Ms Humphreys also said there are “no easy options” when it comes to reforming the State pension.

The Oireachtas Joint Committee on Social Protection, Community and Rural Development and the Islands said in its report, published on Wednesday, that the State pension age should not rise beyond the age of 66.

Its view runs counter to the stance of the Pensions Commission which argued the pension age should rise in steps to 67 by 2031 and then to 68 by 2039.

….

“Today we have 4.5 people working for every one pensioner, by 2050 we will have two people working for every pensioner,” Ms Humpreys said.

Author(s): Sarah Burns

Publication Date: 3 Feb 2022

Publication Site: Irish Times

Animated Chart: China’s Aging Population (1950-2100)

Link: https://www.visualcapitalist.com/cp/chinas-aging-population-problem-1950-2100/

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The one-child policy defined China’s demographic transition for over three decades.

But to combat an aging population and declining birthrates, the government scrapped the policy for a new two-child policy in 2016. Despite this massive change, China still faces a growing demographic crisis.

The above animated population pyramid from James Eagle looks at the distribution of China’s population by age group since 1950, with projections up to the year 2100.

Author(s): James Eagle

Publication Date: 27 Dec 2021

Publication Site: Visual Capitalist

Vietnam adds private pension as silver tide rises

Link:https://asia.nikkei.com/Economy/Vietnam-adds-private-pension-as-silver-tide-rises

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When communist Vietnam recently introduced private retirement funds, it was taking a step not only closer to capitalism, but also toward changing a young pension system that some worry may buckle if citizens get old before getting rich.

Last year marked the first time workers could put part of their paychecks into private retirement accounts, on top of the share contributed to the state pension. But analysts say bigger, systemic change is needed to enable retirement for all, even as the International Labor Organization says the state fund is robust. 

….

Retirees would seem to be the envy of the neighborhood, receiving payouts worth 75% of their prior wages — the fifth-highest among 70 countries in the Allianz Global Pension Report 2020.

But Vietnam’s system covers just 40% of the elderly, which explains why women keep working longer there than in all but five other countries, the report shows.

Author(s): LIEN HOANG

Publication Date: 17 Jan 2022

Publication Site: Nikkei Asia

Revisiting The ‘Retirement Crisis’ And Retirement Legislation In 2022 – What’s In Store In The New Year?

Link: https://www.forbes.com/sites/ebauer/2021/12/31/revisiting-the-retirement-crisis-and-retirement-legislation-in-2022whats-in-store-in-the-new-year/

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First, we need to keep a distinction in mind between efforts to ensure the elderly do not suffer actual material deprivation, whether that’s lack of nutritious food or adequate housing or medical needs, for instance, and efforts to help Americans plan for retirement and alleviate their expressed worries about the unknowns of retirement.

Second, issues of well-being, such as social isolation, and larger questions of the “right” form of provision of long-term care assistance, are not simple issues of finances but are nonetheless important as Americans age, and these topics should not be drowned out by a “retirement crisis” narrative. It should also go without saying that we will urgently need to turn our attention to the Medicare system as well.

And, third, in one crucial respect our models may fail us: experts have worked out a set of recommendations for asset allocation and income spend-down in retirement, and a set of projections for building those models, which fall apart if our new low-interest world continues, Japan-like, rather than being a temporary situation that resolves itself as we recover from the pandemic. Whether this is a result of government policies or an inevitable consequence of the changing economy, this could upend both Biggs’ projections of retiree well-being and the path to retirement security envisioned by legislation like the SECURE Act 2.0.

Author(s): Elizabeth Bauer

Publication Date: 31 Dec 2021

Publication Site: Forbes