Retirement & Savings: How Confident Are We?

According to the Employee Benefit Research Institute’s newly released 2010 Retirement Confidence Survey, one quarter of workers surveyed stated that they have postponed their planned retirement age in the past year, due in large part to a combination of a poor economy and a lack of financial security for the future (i.e. little to no savings). For 33% of workers, this means retiring after the age of 65; a major increase from 19% a decade ago.

There is encouraging news to be found in this survey as the results show that Americans’ confidence in their ability to retire one day appears to be stabilizing. However, while confidence is up, reality paints a more somber picture. According to the data, there is still much to be done to boost Americans’ savings. Let’s take a closer look at the data:

Fewer are saving: Fewer workers report that they and/or their spouse have saved for retirement (69%, down from 75% in 2009). Moreover, fewer workers say that they and/or their spouse are currently saving for retirement (60%, down from 65% in 2009).

Ranks of those with no savings are growing: An increased percentage of workers report they have virtually no savings and investments. In total, more than half of workers (54%) report that the total value of their household’s savings and investments, excluding the value of their primary home and any defined benefit plans, is less than $25,000.

Clueless about savings goals: Many workers continue to be unaware of how much they need to save for retirement. Less than half of workers (46%) report they and/or their spouse have tried to calculate how much money they will need to have saved by the time they retire so that they can live comfortably in retirement.

Sources of retirement income: Fewer workers are expecting to receive retirement income from Social Security (77%, down from 88% in 1991) and defined benefit plans (56%, down from 62% in 2005). However, more workers report they will rely on employer-sponsored retirement savings plans (75% in 2010, up from 69% in 2005) and employment income (77%, up from 70% in 2005).

While the survey results may seem discouraging, this does not have to be everyone’s reality. It is never too late to change your financial situation for the future and start saving. Check out some of WISER’s helpful tips to get you back on track to a financially secure retirement.

Attention Caregivers: Health Care Costs Getting You Down? You're Not Alone...

A new study by MetLife Mature Market Institute in collaboration with the National Alliance for Caregiving and the University of Pittsburgh Institute on Aging found that if you are a caregiver, it will likely affect both your health and your employer’s healthcare costs. Employees caring for older relatives are more likely to report health problems such as depression and hypertension. The healthcare costs for these employees are eight percent higher than for non-caregivers. Younger caregivers (18-39) generate even higher health care costs for employers- about 11 percent more than other employees.

The study highlights these important health implications for caregivers and their workplaces, but also points out that this is an opportunity for reform.

“Employers can provide support to their employees and, at the same time, reduce their health care costs by anticipating and responding to the challenges of eldercare,” asserted Sandra Timmermann, Ed.D, director of the MetLife Mature Market Institute.

The study recommends improvements in access to flexible work schedules, paid time off and telecommuting as ways to reduce the health problems that caregivers experience and also to show support for caregiving in the workplace. The full study can be found here.

Visit WISER’s Caregiving webpage for more caregiving resources.

Happy International Women's Day!

Take part in International Women’s Day this year by recognizing the importance of caregivers around the world. WISER has put together a packet for caregivers, their family members, and friends to help with making important employment and financial decisions.

International Women's Day (March 8th) is a global day celebrating the economic, political and social achievements of women past, present and future. Almost 70 percent of the caregivers in the United States are female, and, around the world, women spend twice as much time caregiving as men.

WISER’s packet, Caregivers: Care for Yourself While Caring for Others, is a tool to help caregivers educate themselves about their financial situations today and plan for a secure financial future!

To learn more about events happening all over the world for International Women’s Day, visit the website.

Census Benefits for Women

Every 10 years the United States is required by constitutional law to take a census of the American people. The census is responsible for helping the government gauge how federal funds should be allocated over the years to come and determines the number of seats each state may hold in the U.S. House of Representatives.

More importantly however, and our focus today, is the impact the census results have on low to moderate income women, who deeply benefit from additional federal funding. According to the Government’s website, “The 2010 Census will help communities receive more than $400 billion in federal funds each year for things like: hospitals, job training centers, schools, senior centers, bridges, tunnels and other public work projects, and emergency services.” The information collected from the census is used not only by the government, but by countless female oriented organizations that provide care, assistance, and support based on this information to those needing it the most. By taking 10 minutes to answer 10 quick and simple questions women can provide answers that could potentially aid them in the future.

In the past, the census has helped bring key women’s issues to the forefront of both government and non-profit agencies’ agendas. Statistics such as the number of women in the U.S., with jobs, with children, of different racial backgrounds, married or single, renting or owning their home are all collected and developed from information gathered from the U.S. Census. This information will help women gain the funding they need for years to come. As President Obama says, “We can’t move forward until you mail it back.” So when you receive your 2010 census form in mid-March fill it out and send it back, because it could be the determining factor behind getting that additional assistance you need over the next 10 years.

The CARD Act of 2009 Takes Effect Today!

The Credit Card Accountability, Responsibility, and Disclosure Act takes effect starting today. This act will work to increase the amount of information clearly presented to consumers about their bills, interest, and changes to their account. This is good news for consumers, but you still need to understand these changes and pay attention to your credit card agreements and activity! Some of the changes include:

▪ Credit card companies must notify you at least 45 days before they can increase your interest rate or change certain fees applicable to your account.
▪ Your bill will have a table showing how long it will take you to pay off your balance if you make only the minimum monthly payments. Here is an example of a credit statement provided by the Federal Reserve:

New Balance $1,784.53
Minimum Payment Due $53.00
Payment Due Date 4/20/12

If you make no additional charges using this card and each month you pay the minimum payment,you will pay off the balance shown on this statement in about 10 years and you will end up paying an estimated total of $3,284.

If you make no additional charges using this card and each month you pay $62, you will pay off the balance shown on this statement in about 3 years and you will end up paying an estimated total of $2,232 (Savings= $1,052)

▪ Credit card companies cannot increase your interest rate for one year after you open the account. Be sure to read the fine print, as there are some exceptions to this rule.
▪ Credit card companies must mail you your bill at least 21 days before your payment is due. You must have the same due date each month and your payment must be deemed “on-time” if it is received before 5:00pm on that date.
▪ When paying your bill, if you make more than the minimum payment, the company must credit the extra amount to the balance with the highest interest rate.
▪ Credit card companies are prohibited from imposing “two-cycle billing,” meaning they can only charge interest on balances in the present billing cycle.

While these changes are encouraging and will help to protect you as a consumer, you should still carefully look at any information your credit card company sends to you and be aware of your plan’s details. For more information on the CARD Act and its provisions, read WISER’s newsletter.

Social Security Benefits Update!

A major victory for individuals with disabling diseases and other medical conditions has been won through the addition of new Compassionate Allowances by the Social Security Administration. Compassionate Allowances allow SSA to offer benefits quickly to applicants whose medical conditions are so serious that they obviously meet disability standards. This update marks the first addition to the Compassionate Allowances list since its creation, and includes diseases like Tay Sachs Disease, Mixed Dementia and early-onset Alzheimer’s disease. The list is used to give individuals with those diseases access to benefits within days, as opposed to months or years, which has often been the case for people with more complicated applications.

Commissioner Michael J. Astrue asserted, “There can be no higher priority than getting disability benefits quickly to those Americans with these severe and life-threatening conditions.”

This victory has been celebrated by Alzheimer’s disease advocates, who have been fighting for streamlined benefits since 2003. Individuals with early-onset Alzheimer’s disease often have difficulties when applying for benefits which can take years to gain through appeal.

To see the full list of Compassionate Allowance Conditions that have been added, visit Social Security’s Compassionate Allowances webpage. Check out WISER’s website for information about Social Security benefits and why they are especially important for women.

What is the Earned Income Tax Credit and how EITC can benefit you?

The Earned Income Tax Credit (EITC) is a refundable federal income tax credit designed for low to moderate income working individuals and families. It was originally approved by Congress back in 1975 as a means to offset the burden of social security taxes and to provide an incentive to work, however currently this credit has the ability to lift many struggling American families above the poverty line.

To find out if you qualify for the EITC ask yourself if you meet the following IRS listed requirements:

· You must have a valid Social Security Number

· You must have earned income from your job, working for yourself or another source.

· Your filing status cannot be married, filing separately.

· You must be a U.S. citizen or resident alien all year, or a nonresident alien married to a U.S. citizen or resident alien and filing a joint return.

· You cannot be a qualifying child of another person.

· Cannot file Form 2555 or 2555-EZ (related to foreign income)

· You can have only limited amount of investment income

Preview of 2010 Tax Year

Additionally in order to qualify you must be within the following income brackets:

Earned income and adjusted gross income (AGI) must each be less than:

• $43,352 ($48,362 married filing jointly) with three or more qualifying children
• $40,363 ($45,373 married filing jointly) with two qualifying children
• $35,535 ($40,545 married filing jointly) with one qualifying child
• $13,460 ($18,470 married filing jointly) with no qualifying children

Tax Year 2010 maximum credit:

• $5,666 with three or more qualifying children
• $5,036 with two qualifying children
• $3,050 with one qualifying child
• $457 with no qualifying children

*The American Recovery and Reinvestment Act (ARRA) provides a temporary increase in EITC and expands the credit for workers with three or more qualifying children. These changes are temporary and apply to 2009 and 2010 tax years.

To learn more about the EITC and how you might qualify for a tax credit please visit the IRS' EITC home page at http://www.irs.gov/individuals/article/0,,id=96406,00.html

Did You Know...

• The older population (65+) numbered 38.9 million in 2008, an increase of 4.5 million or 13% since 1998.
• The number of Americans aged 45-64 - who will reach 65 over the next two decades - increased by 31% during this decade.
• Over one in every eight, or 12.8% of the population is an older American.
• Persons reaching age 65 have an average life expectancy of an additional 18.6 years (19.8 years for females and 17.1 years for males).
• Older women outnumber older men at 22.4 million older women to 16.5 million older men.
• Older men were much more likely to be married than older women - 72% of men vs. 42% of women. 42% of older women in 2002 were widows.
• About 31% (11.2 million) of noninstitutionalized older persons live alone (8.3 million women, 2.9 million men).
• Half of older women (50%) age 75+ live alone.
• About 471,00 grandparents aged 65 or more had primary responsibility of their grandchildren who lived with them.
• The median incom of older persons in 2008 was $25,503 for males and $14,559 for females. Households containing families headed by persons 65+ reported a median income in 2008 of $44,188.
• Major sources of income for older people in 2007 were: Social Security (reported by 87% of older persons), income from assets (reported by 52%), private pensions (reported by 28%), government employee pensions (reported by 13%), and earnings (reported by 25%).
• Social Security constituted 90% or more of the income received by 35% of all Social Security beneficiaries (21% of married couples and 44% of non-married beneficiaries).

*Statistics provided by the Administration on Aging's 2009 Profile - principal sources of the data are the U.S. Bureau of the Census, the National Center on Health Statistics, and the Bureau of Labor Statistics. To read more on AoA's 2009 profile click here.

Is the long term care component of the health care bill really a “CLASS Act?”

The healthcare debate continues to be controversial and complex, and the CLASS Act seems to fall into both of those categories. The Class Act is one of the health reform components receiving a lot of attention—it is short for “Community Living Assistance Services and Supports” Act, and it would provide a voluntary system of long-term care insurance for Americans.

The way it works is that individuals would automatically be enrolled in the program through their employer unless they choose to opt out. The employer would take out monthly premiums from pay and send the funds to a “Life Independence Account.” After employees pay into the account for five years, they would be eligible to receive funds if they become disabled -- meaning they are unable to perform two or more daily activities like bathing, or dressing. Those eligible to receive benefits would receive at least $50 per day in assistance for the remainder of their lives.

Arguments in support of and in opposition to the new program:

Supporters emphasize that there is a huge population in need of care who would rather stay in their communities, but are forced to spend down their savings to qualify for Medicaid and enter nursing homes, or they require family members to provide unpaid caregiving assistance. Approximately one-fifth of Americans provided care for others, according to the National Alliance for Caregiving. Elderly spouses, most often wives, provided care for relatives for more than 30 hours each week.

If the CLASS Act (the Act) was in place, care-providing women might have access to paid help for a few hours each day. Two thirds of working caregivers are forced to take time off from work to provide care, so this benefit could help family caregivers to improve and maintain their own job security. Finally, Community living is much less expensive than living in facilities and the Act could help limit long-term care costs.

Opponents are not as much opposed to the rationale for the program, as they are focused on the financial details -- the program’s administration and its long-term impacts on the federal budget. Whether the program would be financially sustainable also remains debatable. The short-term financial outlook for the program is good, because individuals will pay premiums without receiving benefits. However, once participants start to become eligible for benefits, the trend is expected to turn in the opposite direction.

Another related concern is that only people who are prone to long-term illness may stay enrolled in the program, which would make higher premiums necessary to support the high-need participants. Finally, some opponents believe that this program will lead Americans to develop a false sense of security in terms of their long-term care insurance needs. While the Act is not meant as a substitute for private long-term care insurance, the concern is that people enrolled in the federal program will think they have all of the coverage they need.


If you wish to educate yourself about long-term care insurance further, WISER’s website has several informative fact sheets on the subject.