November 20, 2008

Turmoil in financial markets heightens concerns about retirement income security. Recent research from the Retirement Policy Program adds to our understanding of the potential effects of the downturn on older adults.

How Is the Economic Turmoil Affecting Older Americans?
Older Americans are one of the groups hardest hit by recent economic developments. Falling stock prices and home values have substantially reduced the value of their retirement assets, and they have little time to recoup their losses. Rising unemployment threatens jobs for people approaching retirement and limits employment prospects for retirees seeking to supplement their income. (PDF)

How Much Could Reverse Mortgages Contribute to Retirement Incomes?
Conversion of home equity into a reliable income stream through a reverse annuity mortgage could significantly boost retirement income, particularly for house-rich but cash-poor homeowners. The high fees currently associated with these mortgages and older adults’ reluctance to borrow against their homes have so far limited use of this retirement income option. (Policy Brief)

Are Baby Boomers Saving Enough for Their Retirement?
The ratio of pre- and post-retirement consumption is often used to measure retirement income adequacy. This report concludes that the poorest households are best prepared because they can maintain consumption relying primarily on Social Security. Affluent households are least prepared because their savings are not sufficient to maintain current consumption levels. Nonetheless, affluent households will be able to maintain a consumption level many times that of poor households. (Full Report)

Upcoming Presentations

The Retirement Policy Program and the Health Policy Center at the Institute will hold an invitation-only experts roundtable discussion on December 2 to explore how public policies might adapt to the needs of aging boomers and their children. A summary of the discussion will be published early next year.

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