New releases from AARP’s Public Policy Institute

Economic Security Update	December 2009
The following 2009 publications and more information about economic issues facing older Americans are available at www.aarp.org/ppi/econ-sec/.  Hard copies may be obtained by contacting us at ppi@aarp.org or (202) 434-3910.  We hope that you find this information useful and look forward to working with you in 2010.
Recent Research and Policy Analysis
The Employment Situation, November 2009:  Welcome Drop in Overall Unemployment Does Not Extend to Older Workers
Sara Rix highlights the employment and unemployment situation for persons aged 55 and older as of November 2009.  The unemployment rate for the total aged 16+ workforce fell.  However, the picture was not a rosy one for older job seekers, who saw their unemployment rate, duration of unemployment, involuntary part-time employment rate, and job-seeking discouragement rise.  Look for an update in January, with a detailed description of how older workers have fared over the course of the 2008/2009 recession.
Federal and State Income Tax Incentives for Private Long-Term Care Insurance
To help make long-term care insurance more affordable and to encourage purchases, both federal and state governments provide tax subsidies for private long-term care insurance.  David Baer and Ellen O'Brien describe these subsidies, their value to taxpayers (by age and income), and where possible, their cost to federal and state governments.
The Social Compact in the Twenty-First Century
A shrinking proportion of Americans enjoy long-term job security and robust, guaranteed retiree health and pension benefits.  Moreover, millions of workers have never had this kind of security.  The AARP Public Policy Institute describes the history of and trends in the provision of employee benefits, and uses surveys of employers and employees and expert commentary to shed light on the current state of the Social Compact and how it has changed over time.
Employer-Provided Pensions:  Less to Count On
Sandy Mackenzie and Ke Bin Wu assess the extent and type of pension coverage for workers and families in 2007 and over time.  The authors find that the coverage of the employer-provided pension system is limited and there are marked disparities in coverage between rich and poor, Hispanic and white, well- and less well-educated and other social groups. The Automatic IRA would broaden coverage substantially, and improving the Saver's Credit would provide incentives for low- and moderate-income workers to save for retirement.
The Consumer Price Index:  How It Impacts the Federal Budget and Social Security Benefits
Selena Caldera describes the four consumer price indexes and discusses how they impact the federal budget and benefit programs. The Fact Sheet explains the calculation of cost-of-living adjustments (COLAs) to monthly Social Security benefits and why there are no COLAs projected for 2010 and 2011.
Providing Income for a Lifetime:  Bridging the Gap Between Academic Research and Practical Advice
Workers and families nearing retirement face a number of increasingly complicated decisions.  These include when to claim Social Security, how to allocate a portfolio of financial assets, whether to purchase an annuity (and if so, when and what type), how quickly to spend unannuitized wealth, and whether to pay off any outstanding mortgage or purchase a reverse mortgage.  Tony Webb of the Center for Retirement Research at Boston College describes, for each of these decisions, what most households actually do, the conventional wisdom as to what they should do, and what a careful economic analysis suggests that most people should do.  Three short campanion papers discuss making your nest egg last a lifetime, the case for investing in bonds during retirement, and whether you should carry a mortgage into retirement.
Social Security Disability Insurance: A Primer
Social Security Disability Insurance provides protection against a key source of economic insecurity—the loss of earnings due to disability. Today, 9.3 million Americans rely on SSDI to replace lost wages. Ellen O'Brien provides an overview of SSDI, including who is covered, what benefits they receive, how the program is administered, and how it is financed.
Social Security: Ten Facts that Matter
Selena Caldera discusses ten important facts about Social Security, highlighting the program's long-term solvency problem and the critical role it plays in securing the income of many Americans. Web update available soon at www.aarp.org/ppi/econ-sec.
Older Workers on the Move:  Recareering in Later Life
Career change may become more common as more individuals continue to work past retirement age. Richard W. Johnson, Janette Kawachi, and Eric K. Lewis of The Urban Institute examine the characteristics of workers who change careers in later life.
Social Security Financing: Automatic Adjustments to Restore Solvency
Many countries are facing social security solvency problems as longevity increases and birthrates fall.  A growing number are adopting automatic mechanisms to improve solvency, rather than changing taxes or benefits in an ad hoc manner.  In this paper, John Turner discusses the experience of 12 countries that have adopted auto-stabilization mechanisms.
A New Perspective on Savings for Retirement
John Gist explains how our standard measure of saving provides little insight into household retirement wealth accumulation and draws implications for understanding retirement preparation.
Income, Poverty, and Health Insurance Coverage in 2007
Ke Bin Wu finds that between 2001 and 2007, real median incomes were stagnant or falling, and poverty rates were level or rising for most age groups.  Older households lost less ground; however, median incomes were lower for household headed by persons aged 65 and older than for any other group.
19 Million Working Age Americans Have a Disability that Limits or Prevents Work.  Most Are Poor or Low-Income.
Ellen O'Brien and Carlos Figueiredo explain why people with disabilities are often at a disadvantage in the labor market and call on insurance and assistance programs to provide more timely and adequate support.
Employment Support for the Transition to Retirement:  Can a New Program Help Older Workers Continue to Work and Protect Those Who Cannot?
David Stapleton of Mathematica Policy Research, Inc., proposes a program to encourage later retirement by helping older workers increase their earnings and postpone reliance on their retirement benefits until the benefits are larger.
The Earned Income Tax Credit and Older Workers
Janet McCubbin explains why the age limits that prevent workers over age 64 or under 25 from qualifying for the earned income tax credit should be eliminated.
Upcoming Publications
Hybrids and Other Alternatives to Traditional Defined Benefit and Defined Contribution Plans
The decline of the traditional defined benefit pension (whose effective coverage was never particularly broad) and the rise of the 401(k) plan leave many Americans entering retirement without a steady lifelong stream of income.  Sandy Mackenzie examines the role of hybrid pensions and less conventional alternatives to the traditional pension in mitigating this problem and providing insurance against living an unexpectedly long post-retirement life.
The Effect of Resource Tests and Eligibility for Federal Assistance Programs:  Effects of Current Rules and Options for Change
Millions of poor and low-income older Americans are not eligible for public programs that supplement income or provide assistance with the costs of necessities, including food and health care.  Resource tests in some public programs have not been updated in decades and prevent low-income people from keeping even modest savings--or deter them from seeking assistance.  Mark Merlis provides estimates of the number of people excluded by asset tests today and examines the impact of several options for reforming asset tests in the Supplemental Security Income program, Food Stamps (now called SNAP), the Medicare Savings Programs, and the Medicare Part D Low Income Subsidy.