Economic theory says that participants in 401(k) plans should gradually rebalance their portfolios away from stocks towards less risky bonds as they approach retirement. The rationale is that at younger ages households hold a substantial portion of their wealth in the expected present value of...

Between 2007 and 2009, the percent of 62 year olds claiming Social Security benefits reversed a decadelong decline and increased sharply before reverting back to trend. This phenomenon raises two questions: 1) who was induced to claim early?; and 2) how much monthly retirement income have they...

401(k) plans – the main retirement savings vehicle for millions of workers – allow participants to save on a tax-deferred basis. This tax incentive is more valu­able to workers in high-income families than work­ers in low-income families because they face higher marginal income tax rates....

The comparability of state-local versus private sector pay has become a major issue in the wake of the financial crisis. Funded levels of public pension plans declined sharply, and governments' ability to make the required contributions has been severely constrained by the collapse of...

The Great Recession has resulted in the highest national unemployment rate in nearly 30 years, and those who find themselves unemployed remain jobless longer than ever before. In response, the federal government has extended unemployment insurance (UI) benefits for up to 99 weeks, almost a year...

Since working longer is the key to a secure retirement for the vast majority of older Americans, it is useful to take a look at labor force trends for those under and over age 65 for the last century. This brief proceeds in three steps. The first section describes the long-run decline in labor...

The 2011 Trustees Report for the Social Security system – unlike that for the Medicare program – contains no surprises, which may explain the relative lack of attention it has received in the press. Despite reduced revenues and increased benefit claims in the short run, the system continues...

One of the major challenges facing Americans today is how to prepare for a secure retirement. While market ups and downs are unpredictable, peole do have control over work and saving decisions that can significantly improve their retirement prospects. This brief uses a simple model to estimate...

States and localities account for pensions in their financial statements according to standards laid out by the Governmental Accounting Standards Board (GASB). Under these standards, state and local plans generally follow an actuarial model and discount their liabilities by the long-term yield...

State and local pensions have been headline news since the 2008 financial collapse reduced the value of their assets, leaving a substantial unfunded liabil­ity. The deterioration in the funded status of these plans raised pension costs at the same time that the ensuing recession wreaked havoc...