Benefits August 16, 2013

Singles Rely More on Social Security than Marrieds

August 16, 2013 (PLANSPONSOR.com) – Unmarried individuals living alone, both women and men, are more likely to be reliant on Social Security to keep them out of poverty than those who live with families, a study found.
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Since the majority of older women are single, while the majority of older men are married, Social Security plays a particularly important role in lifting unmarried women out of poverty, according to the study from the Institute for Women’s Policy Research (IWPR).

Research by IWPR indicates Social Security lifts 14.8 million older Americans (age 65 and older), including more than six million unmarried women and men living alone, out of poverty. More whites (12 million) than minorities (2.2 million) rely on Social Security to lift them out of poverty. Seventy-six percent of women age 75 and older rely on Social Security for more than half their income, compared with 60% of those ages 65 to 74 (for men, 60% and 46%, respectively).

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The study analyzed data from the 2012 Current Population Survey Annual Social and Economic Supplement, which was collected jointly by the Bureau of the Census and the Bureau of Labor Statistics. The findings reported in the study refer to calendar year 2011.

A downloadable copy of the study can be found here.

Benefits August 15, 2013

Early Retirement Forced on Some

August 15, 2013 (PLANSPONSOR.com) – Many employees had to retire before they planned, a survey found.
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According to LIMRA Retirement Research, for nearly half (49%) of retirees surveyed, the date of their retirement was dictated by factors out of their control. Factors such as health issues (17%), job loss due to layoff or an employer buyout (14%) and negative work conditions (7%) were cited as the most common reasons behind retirees leaving the work force earlier than planned.

Just 45% of those polled said they retired when they had planned, and only 6% retired later than they had planned.

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Retiring earlier than planned can have significant long-term consequences, LIMRA noted. When someone is forced to retire early it could seriously affect their standard of living in retirement. In addition to the loss of a regular paycheck, early retirement also affects employer-supplied benefits such as health care coverage and retirement contributions.

In many cases, retirement is forced on people who are actually preretirees, said LIMRA. Several years younger than a typical retiree, a preretiree may not be eligible for options such as Social Security benefits or a reverse mortgage. They need to make financial decisions immediately that they would have ideally made later.

Advisers who recommend to their clients steady systematic savings throughout one’s career can help them mitigate some of the risk, LIMRA suggests. Because no one can predict retirement dates with perfect accuracy, early planning and preparation makes it less painful when someone is forced to leave the work force earlier than planned.

Research from LIMRA was based on 5,296 consumers, which included 1,533 retirees, 1,391 preretirees (age 55 and older, and not retired), 955 Late Boomers (ages 45 to 54, and not retired) and 1,417 from Generation X and Generation Y (younger than age 45, and not retired).

A chart containing a breakdown of timing and reasons for retirement can be found here.

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