Two prominent commissions recently proposed introducing a “chained” consumer price index (CPI) to adjust Social Security benefits, other government benefits, and the brackets in the federal income tax each year. The argument is that a chained CPI would be more accurate since it reflects the...

Between 1995 and 2007, inflation-adjusted house prices more than doubled in some areas of the United States. During this unprecedented boom, households spent more and reduced their saving rate. A key question is how much of the increased spending was related to rising house prices, as opposed to...

A widespread perception is that state-local government workers receive high pension benefits which, combined with Social Security, provide more than adequate retirement income. The perception is consistent with multiplying the 2-percent benefit factor in most plan formulae by a 35- to 40- year...

The majority of retirement savings is invested in cor-porate equity, attracted by the historically high average returns offered by stocks. But substantial risk also accompanies investments in stocks, a risk that seems especially costly after the recent financial crisis. Not only did the value of...

The finances of state and local pension plans are headline news almost daily.1 Indeed, although these plans were moving toward prefunding their promised benefits, two financial crises in 10 years have thrown them seriously off course. Measured by the standards of the Government Accounting...

Municipal bond prices are tumbling and rates rising just as public borrowers face pressure to refinance deals cut during the financial crisis. At the same time, the funded status of public pension plans has declined, and states and localities will have to come up with more money to meet future...

Many workers nearing retirement experienced a dramatic decrease in their retirement assets when the stock market crashed in 2008. In order to maintain their expected standard of living in retirement, workers needed to work longer, save more, or do both. To measure the response of older workers...

Due to a changing retirement landscape, many baby boomers are likely to have insufficient resources for a secure retirement.1 One potential source that could improve their situation is inheritances. This study quantifies the aggregate amount of inheritances that baby boomers – those...

The public pension world has seen two innovations in recent years. One is the emergence of notional defined contribution (NDC) plans. The other is the introduction of automatic adjustment mechanisms to help keep pension systems solvent when the economy weakens. This brief looks at the Swedish...

Long-term care is the major uninsured expense for most retirees. Neither private health insurance nor Medicare covers long-term care expenses, although Medicare provides for care in a skilled nursing facility for up to 100 days following hospitalization. Longterm care insurance is available in...