Tuesday, October 17, 2017

Upcoming event: “How employer-sponsored rainy day savings accounts can help workers prepare for emergencies”

Join us Oct. 26 for a discussion of practical steps to increase workers' savings.

Brookings Event Invitation

How employer-sponsored rainy day savings accounts can help workers prepare for emergencies

Thursday, October 26, 2017, 10:30 a.m. – 12:00 p.m.
The Brookings Institution, Falk Auditorium, 1775 Massachusetts Avenue, N.W.
Washington, DC 20036

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Many Americans live paycheck to paycheck, carry credit card debt, and have little or no money set aside for emergencies such as sickness, car or home repairs, job loss, or economic downturns. One consequence of this financial vulnerability is that many individuals use a portion of their retirement savings during their working years. Research suggests that for every $1 that flows into 401(k)s and similar accounts, between 30¢ and 40¢ leaks out before retirement. Helping American households build up their emergency savings would increase their financial security today and in retirement, and one innovative policy idea for doing that is an employer-sponsored rainy day savings account.
On October 26, the Retirement Security Project at Brookings will host a discussion on the practical considerations and challenges of helping households accumulate rainy day savings for use during their working years. The event will feature a presentation of forthcoming research by David John and Brigitte Madrian on the possibility of using employer-sponsored rainy day savings accounts to help workers prepare for an emergency. Following a presentation of the research, a panel of experts reflect on these options and next steps for policymakers and employers. The speakers will take questions from the audience.
Join the conversation on Twitter using #RainyDaySavings.

Presentation of research

David C. John, Deputy Director, Retirement Security Project
Brigitte C. Madrian, Aetna Professor of Public Policy and Corporate Management, Harvard Kennedy School; Research Associate, National Bureau of Economic Research

Panel discussion

Moderator: William G. Gale, Arjay and Frances Fearing Miller Chair in Federal Economic Policy and Director, Retirement Security Project, The Brookings Institution
Diane Garnick, Chief Income Strategist, TIAA
David C. John, Deputy Director, Retirement Security Project
Brigitte C. Madrian, Aetna Professor of Public Policy and Corporate Management, Harvard Kennedy School; Research Associate, National Bureau of Economic Research
David Newville, Director, Federal Policy, Prosperity Now

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Upcoming event: “2017 OECD/AARP Seminar: Preventing Aging Unequally”

2017 OECD/AARP Seminar: Preventing Aging Unequally

Join us on Thursday, October 26, 2017 to mark the release of Preventing Aging Unequally, a new OECD report examining population aging and rising inequalities. The report shows how inequalities result in large differences in lifetime earnings across different groups, and suggests a policy agenda to address inequalities along the life course.

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Event Agenda
Thursday, October 26, 2017
3:30 – 4:00 p.m.   Registration and refreshments
4:00 – 5:00 p.m.   Program
Featured Speakers

  • Gary Burtless, John C. and Nancy D. Whitehead Chair and Senior Fellow, Economic Studies, Brookings Institution
  • Maurizio Bussolo, Lead Economist, Europe and Central Asia, World Bank Group
  • Stefano Scarpetta, Director Employment, Labor, and Social Affairs, OECD
  • Ramsey Alwin, Director, Financial Resilience, Thought Leadership, AARP (moderating)

Closing Remarks by Debra Whitman, Chief Public Policy Officer, AARP
Location
AARP The Hatchery

575 7th Street, NW
5th Floor
Washington, DC 20004
Please RSVP by October 24 at international@aarp.org

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2018 Sandell Grant Program and 2018 Dissertation Fellowship Program

The Center for Retirement Research at Boston College announces the 2018 Sandell Grant Program and 2018 Dissertation Fellowship Program for research in areas such as retirement income, older workers, or well-being in retirement. These programs are funded by the U.S. Social Security Administration.

2018 STEVEN H. SANDELL GRANT PROGRAM:
- Provides the opportunity for junior scholars or senior scholars in a new area to pursue projects on retirement income and policy issues. The program is open to scholars in all academic disciplines.
- Awards up to five grants of $45,000 for one-year projects.
- The submission deadline for grant proposals is January 31, 2018. Grant award recipients will be announced by April 2018. - Visit the Sandell Program website to view the proposal guidelines: http://crr.bc.edu/about-us/grant-programs/steven-h-sandell-grant-program-2

2018 DISSERTATION FELLOWSHIP PROGRAM:
- Supports doctoral candidates writing dissertations on retirement income and policy issues. The program is open to scholars in all academic disciplines.
- Awards up to five fellowships of $28,000.
- The submission deadline for proposals is January 31, 2018.
- Visit the Dissertation Fellowship website to view the proposal guidelines: http://crr.bc.edu/about-us/grant-programs/dissertation-fellowship-program-2

FURTHER INFORMATION: For questions, please contact: Marina Tsiknis, tsiknis@bc.edu, 617-552-1092

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New working papers from the Center for Retirement Research

The Center for Retirement Research has recently released six working papers:

The Behavioral and Consumption Effects of Social Security Changes
Wenliang Hou and Geoffrey T. Sanzenbacher

Dementia, Help with Financial Management, and Well-Being
Anek Belbase and Geoffrey T. Sanzenbacher

Can Knowledge Empower Women to Save More for Retirement?
Drew M. Anderson and J. Michael Collins

How Much Does Out-of-Pocket Medical Spending Eat Away at Retirement Income?
Melissa McInerney, Matthew S. Rutledge, and Sara Ellen King

How Much Does Motherhood Cost Women in Social Security Benefits?
Matthew S. Rutledge, Alice Zulkarnain, and Sara Ellen King

Homeownership, Social Insurance, and Old-Age Security in the United States and Europe
Stipica Mudrazija and Barbara A. Butrica

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Monday, October 16, 2017

New paper: ““What’s Happening to U.S. Mortality Rates?”

The Center for Retirement Research at Boston College has released a new Issue in Brief:

“What’s Happening to U.S. Mortality Rates?”

by Anqi Chen, Alicia H. Munnell, and Geoffrey T. Sanzenbacher

The brief’s key findings are:

  • Mortality rates, which determine life expectancy, are a key factor in cost projections for the Social Security program.
  • Mortality rates consistently improve over time, but the pace of progress varies by year, by age, and by socioeconomic status.
  • Over the past 40 years, progress has been driven by medical advances, better access to health care, and a decline in smoking, partly offset by rising obesity.
  • Looking to the future, mortality improvements will continue to depend on the same drivers, but the net effects could play out differently.
  • The key debate is whether the future will mirror the past, with average rates of improvement of about 1 percent, or whether the pace of progress will slow.

This brief is available here.

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Friday, October 13, 2017

Upcoming event: “Bold New Approaches to Social Security Reform in the 21st Century”

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Bold New Approaches to Social Security Reform in the 21st Century

The most conducive time for crafting innovative policy is not when policymakers are trying to jam legislation through. It’s when the heat of the political spotlight falls elsewhere. And when one of the nation’s most important and relied-on federal programs is the subject of policy reform, fostering an environment conducive to innovation is crucial. On October 19, a set of fresh ideas under development for more than a year will be on full display for dialogue and discussion—key components of crafting good policy in themselves.

Please join the National Academy of Social Insurance and AARP for a day-long exploration of bold new ideas in Social Security policy. A diverse range of policy experts will describe and debate their innovative ideas, many of which have never before been discussed in a public forum. Proposals presented will include those selected in AARP’s Social Security Policy Innovation Challenge as well as other ideas from retirement security experts.

Bold New Approaches to Social Security Reform in the 21st Century
October 19, 2017, 10:00 am — 3:00 pm
Ronald Reagan Building and International Trade Center
Horizon Ballroom
1300 Pennsylvania Ave NW
Washington, DC 20004

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Thursday, October 12, 2017

New paper: “The Behavioral and Consumption Effects of Social Security Changes”

The Behavioral and Consumption Effects of Social Security Changes

by Wenliang HouandGeoffrey T. Sanzenbacher
Abstract

Social Security’s Trust Fund is projected to be exhausted in 2034. A variety of changes to the program have been put forward that would either push this date out into the future or delay it indefinitely. Some of these changes would cut benefits – e.g., increasing the Full Retirement Age (FRA) to 69 – while others would increase program revenue – e.g., increasing the payroll tax. While Social Security’s Office of the Chief Actuary projects the financial impact on the program of a wide variety of changes, understanding the impact of these changes on recipients’ behavior and well-being is also a valuable exercise. This paper uses the Gustman and Steinmeier structural model to analyze the effects of four changes to the Social Security program on recipients’ retirement timing and household consumption.

This paper found that:

  • The two policies that reduce benefits – an increase in the FRA to 69 and a reduction in the COLA of 0.5 percentage points – would increase the length of workers’ careers by delaying retirement.
  • The two policies that increase revenues – an increase in the payroll tax to 7.75 percent and an increase in the cap to cover 90 percent of earnings – would have a negligible impact on retirement timing.
  • For the benefit-based policies, the reduction in consumption relative to current policy is relatively high post-retirement, with the COLA adjustment having an increasing effect with time.
  • Policies that increase revenue have little effect on consumption after retirement but have a consistent effect during the working life.

The policy implications of this paper are:

  • Policymakers can expect individuals to delay retirement more in response to Social Security changes that reduce benefits than from changes that increase revenue.
  • In terms of consumption, policymakers considering benefit cuts versus revenue increases face a tradeoff: a sharper reduction in consumption over the shorter span of retirement or a smaller, but more prolonged, reduction in consumption during the working life.

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