March 2022

¿Cómo ajustan los hogares sus ingresos, ahorros y consumo después de la partida de los hijos?

How Do Households Adjust Their Earnings, Saving, and Consumption After Children Leave?

By Andrew G. Biggs, Anqi Chen & Alicia H. Munnell Whether parents adjust their consumption after their children leave home has important implications for our understanding of retirement income adequacy. Prior studies have found that parents reduce consumption after their children become independent, allowing them to save more for retirement. Other studies, however, have found that savings for retirement does not increase. If households are both consuming less but not saving more after the children leave, where are the resources...

Affordable childcare the key to boosting women’s retirement savings

More affordable early childhood education and care could help boost the superannuation of Australian women, who are currently retiring with one third less super than men. According to a new report from Industry Super Australia, increasing the child care subsidy for low- and middle-income families to 95 per cent and flattening taper rates, could see a woman on the median wage, if she moved from part-time to full-time work, retire with an extra $118,000. Industry Super Australia says improving women’s workforce...

UK. ‘Pensioner poverty’ alarm as older people raid pension pots

Older people face the prospect of “pensioner poverty” due to the rising cost of living and the falling value of the stock market, it has been claimed. Figures from online investment platform Interactive Investor show its customers withdrew a quarter more from their private pensions in January as the cost of energy, food and petrol went up. The figures have prompted concern that pensioners will not have enough money to see them through retirement. In January, the average withdrawal from an Interactive...

US. How to Improve Retirement Readiness in Under-represented Groups

For plan sponsors wondering what they can do to help diverse workers increase their retirement savings, a new paper outlines plan features and strategies that can help bolster savings for underserved workers. In Improving Retirement Readiness for Underrepresented Groups, Alight explains that employers have benefited from a diverse population of employees, as these individuals brought unique perspectives to the workplace. These employees have also brought a wide range of retirement savings behaviors that have not necessarily led to positive outcomes,...

Does Informal Sector Size Impede Economy Growth in Developing Countries?

Does Informal Sector Size Impede Economy Growth in Developing Countries?

By Loudi Njoya, Ngouhouo Ibrahim & Etah Ewane This paper empirically analyses the impact of the informal sector on long-term growth in developing countries. Using a panel of 112 countries from the icrg and Medina and Schneider (2018) over the period 1991 to 2015, a U-shaped relationship between the size of the informal sector and the growth of GDP per capita was obtained. These results, contrary to those of Ceyhun Elgin and Serdar Birinci (2016), show that a certain threshold...

Inflation is causing some older Americans to delay retirement plans, survey shows

US. Inflation is causing some older Americans to delay retirement plans, survey shows

As inflation rises, many Americans are shifting life milestones, including retirement. Some 13% of Gen Xers and baby boomers say they have postponed or considered delaying plans to leave the workforce due to soaring costs. Read also US. The Smart Way for Public Pensions to Divest from Russia That’s according to a survey from the Nationwide Retirement Institute, showing a cross-generational wave of Americans canceling or postponing major events due to rising prices. Read also Global Pension Asset Values Grow to Record $56...

Research reveals shortcomings in retirement preparedness in the UK

Research reveals shortcomings in retirement preparedness in the UK

Berkshire and Buckinghamshire residents are most prepared for retirement, despite only 52.3 per cent of residents being on track for a moderate income, the Hargreaves Lansdown Savings and Resilience barometer has revealed. The research showed that around 50.6 per cent of residents in Surrey, East and West Sussex were on track for a moderate retirement income, defined by the PLSA as around £20,800 per year for a single person and £30,600 per year for a couple. In addition to this, around...

The Early Impacts of the Coronavirus Pandemic on Americans’ Economic Security

The Early Impacts of the Coronavirus Pandemic on Americans’ Economic Security

By Marco Angrisani, Jeremy Burke & Arie Kapteyn The COVID-19 pandemic has had enormous effects on the U.S. economy and may have had serious negative repercussions for many Americans’ financial stability. We use longitudinal survey data from a nationally representative internet panel, the Understanding America Study, to examine the early impacts of the pandemic and policy responses to it, on Americans’ financial stability, financial well-being, and financial behavior (as of May 2020). We find that rather than experiencing large declines, Americans’...

US. This Is The Best Kept Secret In Retirement Planning & It’s About To Make Retirement More Expensive & Complicated

Looking past the gas pump to me on the other side, a 60-something year old woman states, “I waited a long time for this.” Jiggling the nozzle out from my tank, “What’s that?” I ask. She replies blandly, “Retirement.” Continuing, as if speaking to a larger invisible audience, she points up to the pump price sign and shakes her head saying, “With these prices, I just don’t know.” Fuel prices, and transportation costs generally, are on the rise for all of us....

February 2022

Retirees Depleting Retirement Plan Lump Sums Faster than Five Years Ago

When approaching retirement, employees are faced with a decision that can have lifelong implications: take a lump sum payment or a guaranteed monthly annuity from their employer-sponsored defined contribution (DC) plan. According to MetLife’s 2022 Paycheck or Pot of Gold Study℠, a growing proportion of retirees are depleting their lump sums at faster rates than previously seen. The full report is available at metlife.com/paycheckgoldstudy. Today, one in three retirees (34%) who took a lump sum from their DC plan, depleted...