Defined Contribution Wealth Inequality: Role of Earnings Shocks, Portfolio Choice, and Employer Contributions
Author: Joelle Saad-Lessler, Teresa Ghilarducci, and Gayle Reznik
Date: June 2017
The number of earnings shocks people experience - job loss, divorce, health emergencies, etc - differs by income level, contributing to inequality in retirement wealth.

Earnings Volatility and 401(k) Contributions
Author: Teresa Ghilarducci, Joelle Saad-Lessler, and Gayle Reznik
Date: May 2017
This paper finds that negative economic shocks cause 401(k) contribution behavior to react in ways consistent with reactions to fear and past trauma. If employees participating in 401(k) plans did not experience real earnings declines or unemployment spells between 2009 and 2012, then their contribution rates would have been 5% higher and each person would have contributed US $193 more toward their defined contribution plan accounts. 

Larger Birth Cohort Lowers Wages
Author: Teresa Ghilarducci, Michael Papadopoulos, and Tony Webb
Date: May 2017
Labor market crowding caused by Boomers delaying retirement will continue to reduce their wages in old age relative to what would have happened had their share of the labor force declined at the same rate as prior generations. The reduction in wages resulting from the increase in older workers provides a cautionary note to those advocating delayed retirement as a solution to the retirement savings crisis.

Relative Wages in Aging America: The Baby Boomer Effect
Author: Teresa Ghilarducci, Michael Papadopoulos, and Siavash Radpour
Date: May 2017
As Baby Boomers remain in the work force, some due to inadequate retirement savings, the labor supply of older workers could increase relative to the labor supply of prime-age and younger workers. Economic theory suggests an increase in the relative labor supply of older Americans could lower wages or slow wage growth for younger workers if older workers are used extensively as substitutes rather than complements. The authors analyze if workers are used as substitutes or complements by age and sex. The results imply that policies aimed to encourage older people to stay and enter the labor market, such as increasing Social Security’s full retirement age or raising Medicare eligibility to age 70, may have broad labor market effects by causing wage stagnation.

Labor Market Discrimination: A Bleak Outlook for Older Women
Author: Teresa Ghilarducci and Kyle Moore
Date: March 2017
Older women suffer from age discrimation in the labor market more than older men, resulting in lower pay and a more difficult time finding work when unemployed. This short paper outlines the likely reasons why and offers an outlook for the future.

Innovations in Protecting the Old: Mostly Social Insurance and Some Assets
Author: Teresa Ghilarducci
Date: March 2017
Currently, there is an ideological commitment to individual asset building and an emphasis on individual wealth for retirement and superannuation. However, this focus embeds fatal flaws in old age income support programs. As a result, access to government subsidies for retirement savings is varied and has generated new sources of inequality. This paper was submitted to the Initiative for Policy Dialogue at Columbia University for an edited volume on “Innovations in the Welfare State” edited by Joseph Stiglitz.

The Labor Consequences of Financializing Pensions
Authors: Teresa Ghilarducci and Amanda Novello
Date: March 2017
Income in retirement has become increasingly based on individual financial assets rather than Social Security. Using OECD data, the authors show that the instability of financialized retirement systems is related to workers staying in the labor force longer than before, as well as higher rates of old age poverty.

Gender and Racial Disparities in Physical Job Demands of Older Workers
Authors: Teresa Ghilarducci, Bridget Fisher, Kyle Moore, and Anthony Webb
Date: October 2016
Policy proposals to cut Social Security benefits by increasing the normal retirement age from 67 to as high as 76 ignore the persistent physical demands older workers face. Between 1992 and 2014, workers ages 55 to 62 saw little decrease in physical demands at work. While older men and older white workers were the beneficiaries of slight declines in physical demands on the job, older women experienced an increase in comparison to older men while older black workers continued to fall behind older white workers.

Reducing Inequality Through Social Security
Authors: Peter Arno and Kyle Moore
Date: July 2016
This research supports the need to focus not only on ensuring Social Security’s solvency for future generations, but building the program’s ability to support all working Americans. Using data from the Social Security Administration, the authors determine that income inequality would experience a small reduction if Social Security reform includes both removing the maximum taxable earnings cap and increasing the minimum benefit.

Are Philadelphians Ready for Retirement?
Authors: Teresa Ghilarducci, Bridget Fisher, Alexander Pavlakis, Siavash Radpour, and Anthony Webb
Date: June 2016
Workers across the country face a retirement crisis. However, workers in Philadelphia are faring worse than average. First, workers in Philadelphia are less likely than workers nationally to have access to an employersponsored retirement account. Second, the retirement plan participation rate among workers with access to a plan at work is lower than the national average. The report was prepared on behalf of the City Council of Philadelphia.

Policy Options for Cutting Retirement Plan Leakages
Authors: Teresa Ghilarducci, Bridget Fisher, Siavash Radpour, Anthony Webb
Date: April 2016
Financial necessity is an important reason low-wage households are more likely to make pre-retirement withdrawals from their 401(k) plans. However, an increase in the tax penalty on early withdrawals may increase rather than discourage withdrawals, and a prohibition on withdrawals may decrease contributions. To ensure that all households both contribute to retirement plans and remain invested, retirement policy should both mandate contributions and prohibit pre-retirement withdrawals. Finally, if households are prohibited from using retirement savings to buffer pre-retirement shocks, policy interventions will be required to increase the financial resilience of working-age households.

401(k) Plans: A Failed Experiment
Authors: Teresa Ghilarducci, Bridget Fisher, Siavash Radpour, Anthony Webb
Date: April 2016
The first birth cohort exposed to the 401(k) system for most of their working lives is now approaching retirement. 401(k) participants in this cohort have accumulated only about a third of the savings they need to maintain their standard of living in retirement. The 401(k) system fails even those who use it as instructed. High earners are as ill-prepared for retirement as low-and moderate earners. Inadequate wealth accumulations reflect well-known design flaws in the 401(k) system – patchy coverage, high fees, opportunities to take pre-retirement withdrawals, and the lack of a default pathway for converting accumulated wealth into retirement income.

Household Economic Shocks Increase Retirement Wealth Inequality
Authors: Teresa Ghilarducci, Bridget Fisher, Siavash Radpour, and Anthony Webb
Date: April 2016
Economic shocks, such as job-loss, have a particularly adverse effect on the retirement savings of workers in low-income households, exacerbating retirement savings inequality. Low income households are more likely than moderate- and upper-income households to experience economic shocks. Workers in low-income households are also more likely to withdraw from their retirement account after a shock. This study shows that these shocks have significant effects on the finances of low-income households, causing up to a third of all withdrawals, and possibly more.

A Comprehensive Plan to Confront the Retirement Savings Crisis
Authors: Teresa Ghilarducci and Hamilton "Tony" James
Date: March 2016
The plan proposes a simple, immediately effective solution to address the fundamental flaws in today’s broken retirement system. It details a single, sustainable framework - Guaranteed Retirement Accounts (GRAs) - to allow Americans to save consistently, generate the returns necessary, and retire with guaranteed lifelong income. And by repurposing lopsided subsidies and strategically using existing government infrastructure, this plan can be implemented with no new taxes, bureaucracy or increase of the federal deficit.

The States of Reform
Authors: Teresa Ghilarducci and Alex Pavlakis
Date: January 2016
The recent proliferation of state level retirement reform proposals indicates a broad recognition of the looming retirement crisis, and suggests that the political will for reform is present. In this paper, we detail the proximate causes of American workers’ shortage of retirement savings, evaluate the variety of state level programs that are emerging in response to the crisis, and draw some conclusions about what effective reform should look like.

Laying the Groundwork for More Efficient Retirement Savings
Authors: Christian E. Weller and Teresa Ghilarducci
Date: November 2015
Better designed retirement savings incentives that target lower-income workers—for instance, those who do not work for an employer that offers retirement benefits—would make a real difference in workers’ retirement preparedness. In a joint issue brief with the Center for American Progress (CAP), CAP Senior Fellow Christian Weller and SCEPA Director Teresa Ghilarducci call for reforming the tax code to prioritize refundable tax credits over new tax deductions; emphasize progressive savings matches that offer relatively higher benefits to lower-income households; create savings incentives that are simple to use; and establish new savings options, such that gaining access to savings incentives depends less on employers offering retirement plans.

The Inefficiencies of Existing Retirement Savings Incentives
Authors: Christian E. Weller and Teresa Ghilarducci
Date: October 2015
The growing retirement crisis results, in part, from inefficient savings incentives embedded in the U.S. tax code. In a joint issue brief with the Center for American Progress (CAP), CAP Senior Fellow Christian Weller and SCEPA Director Teresa Ghilarducci find that households that need the most help saving for retirement receive the least assistance from the multitude of savings incentives in the U.S. tax code, for three reasons. First, existing savings incentives can be incredibly complex. Second, savings incentives often benefit higher-income earners more than middle- and lower-income earners. Third, the public loses out on tax revenue that otherwise would have been collected. Tax reform is needed to simplify savings incentives and better target incentives.

Racially Disparate Effects of Raising the Retirement Age
Authors: Teresa Ghilarducci and Kyle Moore
Date: June 2015
Advocates for raising the retirement age to 70 and beyond argue that since the "average" American is living longer, lifetime benefits are actually increasing. However, black seniors die sooner and are sick for a longer period of time than white seniors. This means that any policy to cut Social Security benefits by raising the normal retirement age will have a disparate and negative impact on Blacks. This study examines the size and growth of racial gaps in mortality and morbidity, and shows that while some groups have experienced lifetime benefit increases, others have not.

Transforming Federal and State Retirement Tax Deductions
Authors: Teresa Ghilarducci and Ismael Cid-Martinez
Date: June 2015
Published in the Marquette Benefits and Social Welfare Law Review, this paper discusses how the United States' system of voluntary, tax-favored retirement accounts has failed to produce adequate retirement savings. It recommends switching the ineffective and regressive system of tax deductions for contributions to qualified retirement accounts to providing every American with a tax credit. This revenue-neutral policy change would provide an equitable and effective means of ensuring that all working Americans have retirement savings.

Now is the Time to Add Retirement Account to Social Security: The Guaranteed Retirement Account Proposal
Authors: Teresa Ghilarducci, Bridget Fisher and Zachary Knauss
Date: June 2015
Despite billions in tax breaks to incentivize retirement savings, almost half of the American workforce does not have a retirement plan. Without safe, effective accounts to save consistently for retirement, older workers face the increasing likelihood of experiencing downward mobility in retirement. Rather than relying on families and social spending to provide for the growing numbers of vulnerable seniors, we need comprehensive retirement reform to ensure retirement income security. This includes creation of Guaranteed Retirement Accounts (GRAs) added on to Social Security. A GRA is a mandated, professionally-managed retirement account – a hybrid between a defined benefit pension and a 401(k)-type defined contribution plan. 

Inadequate Retirement Account Balances for Families Nearing Retirement
Authors: Teresa Ghilarducci, Bridget Fisher, Siavash Radpour and Joelle Saad-Lessler
Date: June 2015
Americans nearing retirement do not have enough savings to support their standard of living in retirement. Over 28% of American families ages 50-64 have nothing saved for retirement. The average total balance in all retirement accounts is $150,000, an amount considered inadequate for retirement security.

More Middle Class Workers Will Be Poor Retirees
Authors: Teresa Ghilarducci and Zachary Knauss
Date: June 2015
The erosion of retirement income security in the United States is causing a decline in the living standards of millions of Americans when they retire. The number of 65-year-olds per year who are poor or near poor will increase by 146% between 2013 and 2022. 

Retirement Savings Tax Expenditures: The Need for Refundable Tax Credits at the Federal and State Level
Authors: Teresa Ghilarducci, Bridget Fisher, Ismael Cid-Martinez and Joelle Saad-Lessler
Date: June 2015
Despite spending $100 billion a year in retirement tax breaks, the U.S. faces a retirement income security crisis. Though federal tax breaks for 401(k) plans and IRA plans are known to be ineffective and regressive, until now no one has documented the nearly $20 billion states spend on the same ineffective tax breaks. If federal and state tax deferrals for retirement accounts were transformed to refundable tax credits and deposited into Guaranteed Retirement Accounts, every worker would have an average of over $647 per year in retirement savings from the federal government, with an additional $172 going to those who live in states with income taxes.

Retirement Readiness in New York City: Trends in Plan Sponsorship, Participation, and Preparedness
Authors: Teresa Ghilarducci, Joelle Saad-Lessler and Michael Papadopoulos
Date: June 2015
New Yorkers need safe and convenient mechanisms to save for old age. Secure pension income helps strengthen the city's financial future by keeping social spending down and older residents' spending power up. However, fewer than half of New York residents have access to a retirement plan at work. Low and decreasing rates of employer sponsorship of retirement plans and the shift from traditional pension plans to 401(k)-type plans are threatening New Yorkers' financial readiness for retirement. 

Earnings Experience and its Impact on 401(k) Contribution Behavior: The Roles of Earnings Shocks, Spousal Behavior and Pension Plan Details
Authors: Teresa Ghilarducci, Joelle Saad–Lessler, and Gayle Reznik
Date: May 2015
When it comes to making contributions to their retirement savings, people's anxiety overcomes inertia. This study finds that while workers may tend toward a path of least resistance, economic shocks, spousal behavior, and changes in pension plan details continuously cause changes in 401(k) contributions.

The Hispanic Health Paradox: Implications for Retirement Policy
Authors: Kyle Moore, Teresa Ghilarducci, and Bridget Fisher
Date: May 2015
Foreign-born Hispanic men can expect to live 3.2 years longer than their U.S.-born counterparts. As successive generations of Hispanic-Americans are born in the U.S., the longevity advantage attributed to the Hispanic-American population will likely disappear and their health outcomes will begin to approach what would be expected given their relatively low socioeconomic status. Proposals to raise the retirement age must anticipate this decrease in Hispanic-Americans longevity or risk disproportionately affecting this community.

The Racial Morbidity Gap: Implications for Raising the Retirement Age
Authors: Kyle Moore and Teresa Ghilarducci
Date: April 2015
Proposals to reduce Social Security benefits collected before age 70 argue that Americans on average are living longer and should therefore work longer. But averages across racial groups hide crucial differences in quality of life, ability to work and longevity. While increasing the normal retirement age will make it more difficult for all Americans to experience a healthy and active retirement, Blacks will be disproportionately affected. For example, Blacks are more likely to develop adverse health conditions that limit their ability to work and to report declining health. The average black American will experience physical limitations before the normal retirement age of 67.

Are U.S. Workers Ready for Retirement? Trends in Plan Sponsorship, Participation, and Preparedness
Authors: Teresa Ghilarducci, Joelle Saad-Lessler and Kate Bahn
Date: March 2015
Employer-sponsored retirement plans provide the best vehicle for retirement savings because they provide a practical and efficient way for workers to save consistently. However, this report finds that almost half of Americans who were working in 2011 were not offered a retirement account at work. In addition, 68% of the U.S. working age population (25-64) did not participate in an employer-sponsored retirement plan because their employer did not offer one, they elected not to participate or were not working. This report also finds the amounts saved through employer-sponsored defined contribution (DC) retirement plans are only slightly better off than those without a retirement plan. Except for those workers with defined benefit (DB) plans, most middle class U.S. workers will not have adequate retirement income. The poverty projections highlighted in this report reveal that 33% of future retirees will be either poor or near-poor when they retire. Additionally, 55% of retirees will be forced to rely solely on their Social Security income. A previous version of this report was published in the Journal of Pension Benefits.

401(K) Tax Policy Creates Inequality
Authors: Teresa Ghilarducci and Adam Hayes
Date: February 2015
Though well-intentioned, the current system of tax deferral for retirement contributions undermines public policy aimed at strengthening retirement security for all Americans. In fact, it has become a regressive policy that contributes to wealth inequality. This policy note illustrates how two employees who are identical savers and investors in every way except for income receive different rates of return due only to the effects of the tax code. Converting the current system of tax deductions for defined contribution retirement plans to a refundable tax credit would solve this problem and treat all retirement savers the same.

The Racial Longevity Gap Past Age 65: Implications for Raising the Retirement Age
Authors: Teresa Ghilarducci and Kyle Moore
Date: December 2014
In 1950, both black and white American men who reached age 65 could expect to live twelve more years. By 2010, white men at age 65 were projected to live almost 2 years longer than black men, while white women could expect to live one year longer than black women. In 60 years, racial equity turned into a racial gap in age-65 life expectancy. This is significant when considering public policy proposals that seek to cut Social Security benefits by raising the retirement age. A racial gap in life expectancy past the age of 65 means this cut in benefits will disproportionately impact Blacks.

Bargaining Power and Employer-Sponsored Retirement Plans
Authors: Teresa Ghilarducci and Joelle Saad-Lessler
Date: July 2014
Workplace retirement plans - defined contribution (DC) and defined benefit (DB) - help workers save for retirement conveniently, consistently, and automatically. However, offer rates are steadily declining: between 2001 and 2012, the retirement plan offer rate dropped from 60% to 50%. The drop is driven by a decline in DC plans. Bargaining power matters, since both the length of time spent unemployed and union status significantly impact the likelihood of losing or retaining employer retirement plan offer rates. Therefore, efforts to increase retirement account offer rates must address the decline in workers' bargaining power and the changes in norms relating to benefits provision.

How 401(k) Plans Make Recessions Worse
Authors: Teresa Ghilarducci and Joelle Saad-Lessler
Date: June 2014
This study concludes that 401(k)-type retirement plans exacerbate recessions, whereas annuity-backed retirement accounts such as defined benefit plans and Social Security stabilize the economy during both recessions and expansions - a function known as automatic stabilizers. These plans work as automatic stabilizers because their benefits do not fluctuate with market returns allowing consumption to remain constant through recessionary and expansionary times. Alternatively, 401(k)-type plans are private market-based retirement accounts, therefore their success or failure is tied directly to the booms and busts of the business cycle. The value of these accounts increases during economic expansions and decreases during recessions, which directly and immediately impacts consumption causing consumers to reduce spending in recessions, therefore worsening the recessions.

Retirement Readiness in New York City: Trends in Plan Sponsorship, Participation and Income Security
Authors: Joelle Saad-Lessler, Teresa Ghilarducci and Kate Bahn
Date: April 2014
This report, conducted at the request of New York City Comptroller Scott Stringer, reveals a 17% drop (from 49% to 41%) between 2001 and 2011 in the percentage of New York City workers participating in a retirement plan at work. Only 12% of New Yorkers had a defined benefit (DB) plan. The DB plan guarantees a pension, whereas defined contribution (DC) plans such as 401(k)s and IRAs do not. As a result, those with DB plans maintained an average income replacement rate of 90% versus those with DC plans who had an average replacement rate of 48%.  The consequences of declining employer-sponsored plans and low replacement rates threaten workers' standard of living in retirement and could increase poverty levels among the city's older residents. 

Are Washington Workers Ready for Retirement?
Authors: Joelle Saad-Lessler, Teresa Ghilarducci, Kate Bahn and Anthony Bonen
Date: April 2014
In addition to Social Security, Washington workers depend on the accessibility and affordability of employer-sponsored retirement plans to support them in retirement. This report reveals that Washington employers are offering fewer retirement plans to their employees today. The overall decline in plan sponsorship, coupled with the shift from DB to DC plans, represents a real threat to workers' retirement security. Left unchanged, Washington's residents will face increasing downward mobility in retirement. 

Are Minnesota Workers Ready for Retirement?
Authors: Joelle Saad-Lessler, Teresa Ghilarducci and Kate Bahn 
Date: March 2014
Minnesota workers, like all American workers, need workplace retirement accounts to achieve an adequate retirement income. This report finds that only a bare majority of workers in Minnesota have access to retirement accounts at work, and the share of workers who do have these accounts is falling. Though it is tempting to attribute the lack of retirement readiness for Minnesota workers to a recession, the reason for the lack of pensions is structural - not enough people have retirement coverage at work and, when they do, the amounts saved are often inadequate.

Fact Sheet: New Retirees Have Inadequate Retirement Account Balances
Authors: Joelle Saad-Lessler and Teresa Ghilarducci
Date: August 2013
This fact sheet provides documentation and analysis on retirement account balances of near retirees based on data from the U.S. Census Bureau's Survey of Income and Program Participation. The analysis reveals that 59 million Americans ages 50-64 in 2011 will not have enough retirement assets to maintain their standard of living when they retire. Three-fourths of near retirees have annual incomes below $52,536 per year and their average retirement account balance is $27,207. Furthermore, the median value of retirement account balances for half of near retirees is zero, showing that half of older working Americans have absolutely no retirement savings. These facts - coupled with a weakening labor market, especially for older workers - documents the growing trend toward a retirement income security crisis.

New Policies for an Older Unemployed Population
Authors: Joelle Saad-Lessler and Teresa Ghilarducci
Date: June 2013
Older workers face structural unemployment. Older unemployed Americans are living with low incomes and without health insurance for longer periods of time due to increases in the duration of unemployment. This paper recommends expanding and reforming retraining programs to better accommodate the needs of older workers and the creation of tax incentives to encourage employers to hire older workers.

Are Connecticut Workers Ready for Retirement?
Authors: Joelle Saad-Lessler, Teresa Ghilarducci, Kate Bahn, Anthony Bonen and Lauren Schmitz
Date: April 2013
This report reveals that fewer and fewer Connecticut employers are offering pension plans – both defined contribution and defined benefit plans – to their employees. This trend in Connecticut and across the country represents a serious threat to workers' ability to support themselves in old age. Without access to an employer sponsored retirement plan, Connecticut workers will be more reliant on Social Security and will be at risk for downward mobility in their senior years.

Are Maryland Workers Ready for Retirement?
Authors: Joelle Saad-Lessler, Teresa Ghilarducci and Lauren Schmitz
Date: March 2013
The weak economic climate has left many people in Maryland worried about how their financial needs will be met as they age. In addition to the basic level of insurance provided by Social Security, Maryland workers depend on the accessibility and affordability of employer-sponsored retirement plans to fund their retirement years. This report finds that employer sponsorship of retirement plans is declining in Maryland, making it difficult for workers to prepare for retirement.

The Crisis of Jobs and Healthcare for Unemployed Americans Aged 55-64
Authors: Joelle Saad-Lessler, Teresa Ghilarducci and Lauren Schmitz
Date: December 2012 
Using the data from the U.S. Census Bureau's Survey of Income and Program Participation (SIPP), we investigate how older unemployed Americans are living, the impact of the Affordable Care Act (ACA) reform, and whether the unemployment faced by older Americans is cyclical or structural in nature. We explore solutions to this crisis, reviewing various reforms to job retraining programs and/or tax incentive plans. Workforce development and unemployment insurance policies must take into account the new reality that the unemployed are increasingly older, extremely low income, less likely to be able to retire on pensions, have little access to spousal income or health care and are often displaced from their career industries.

Retirement Readiness in North Carolina
Authors: Teresa Ghilarducci, Joelle Saad-Lessler and Lauren Schmitz
Date: December 2012
This study utilizes data from the Current Population Survey (CPS) to compute sponsorship trends in North Carolina. The decrease in sponsorship rates, coupled with low rates of participation in retirement accounts and inadequate accumulated savings to sustain one’s living standards in retirement are cause for concern. The numbers in this report indicate that 47% of North Carolina workers nearing retirement will be poor or near poor if they retire at age 65. Sixty-three percent of workers aged 55-64 without any workplace retirement plan are projected to be poor or near poor, compared to 27% of workers who have a retirement plan and are actively participating.  

State Guaranteed Retirement Accounts: A Low-Cost, Secure Solution to America's Retirement Crisis 
Authors: Teresa Ghilarducci, Robert Hiltonsmith and Lauren Schmitz
Date: September 2012
The share of workers without any retirement plan at work has risen dramatically over the past decade. We propose states offer all workers a voluntary, low-fee, low-risk, State Guaranteed Retirement Account (State GRA) to help boost savings for retirement. State GRAs are individual accounts where benefits at retirement are based solely on contributions and returns. The major features of the State GRA proposal include consistent contributions, pooled investments, guaranteed returns, portable accounts, lifelong retirement income, independent administration, and public investment management.

Understanding Elderly Poverty in the United States: Alternative Measures of Elderly Deprivation
Author: Mary Borrowman
Date: April 2012
There are two conflicting stories about the economic status of elderly people in the United States. The first focuses on the great economic gains of the elderly in the last few decades and the other story is of increasing elderly economic insecurity and deprivation. As the proportion of elderly in the U.S. population grows, elderly economic issues are increasingly critical. This requires policy makers and groups that represent the interests of the elderly to understand and address elderly economic insecurity and vulnerability to deprivation. This report contributes to a broader understanding of elderly poverty and—with hope—better policy responses by examining the extent of elderly poverty using different poverty measures. 

New York City and State Tax Expenditures for Defined Contribution Plans
Authors: Lauren Schmitz and Teresa Ghilarducci
Date: March 2012
As traditional pensions, or defined benefit plans, are replaced by defined contribution plans, workers in New York City and in the nation have less retirement security. Coverage rates for employer plans are falling. Most defined contribution retirement accounts are in the form of 401(k)-type plans - voluntary, individual, self-directed financial accounts that enjoy tax-favored status under federal, state, and city tax rules. Re-arranging tax subsidies from a tax deduction to a flat tax credit would provide workers with annual accumulations (indexed for inflation) to supplement Social Security and provide an adequate standard of living in retirement. These accumulations could then be invested in a "Guaranteed Retirement Account," a vehicle that allows workers and employers to contribute to a safely and efficiently administered pension account. This change would be revenue neutral for the city, while increasing retirement security for workers at small- and medium-sized businesses without imposing additional cost on their employers.

Unemployed Older Americans: A Profile
Authors: Joelle Saad-Lessler and Teresa Ghilarducci
Date: February 2012
While the harm caused by unemployment is unique to each person, this study focuses on the staggering variety of challenges and perils shared by older people.The U.S. labor force is aging, and so are the people who are unemployed. In March 2011, the U.S. population comprised 305 million people, of whom 36.6 million were age 55-64; over a third (37.5%) of that population were not working -- 4.1% were officially unemployed, and 2% of those out of the labor force were discouraged workers. If we include discouraged workers among the unemployed, 4.8% of older Americans were willing to work but did not have a job in 2011. And these rates are up from the date the recession officially ended in March of 2009. At that time, the official unemployment rate for older workers was 3.04%, the discouraged rate was 1.71%, and the fraction of older Americans who were willing to work but unable to find a job was 3.57%.   

New York's Retirees: Falling into Poverty
Authors: Joelle Saad-Lessler, Teresa Ghilarducci and Lauren Schmitz
Date: February 2012
The financial security of the next generation of New York retirees is at risk. If current trends persist, 37% or close to 750,000 workers approaching retirement who live in metropolitan areas of New York State, are projected to be poor or near poor in retirement. This report looks at workers who are currently ages 25-64 and are living in metropolitan areas of New York State (46% of whom live in New York City), and projects the income stream that will be available to them when they reach age 65. Results show that if current trends persist, many middle and low income workers will experience downward mobility or a steep drop in their living standards when they retire, and several will face severe economic hardship. 

Are New Yorkers Ready for Retirement?
Authors: Joelle Saad-Lessler, Teresa Ghilarducci and Lauren Schmitz
Date: January 2012
This report, published by New York City Comptroller John C. Liu, reveals that a growing number of New Yorkers don't have enough money to retire. Over one-third of older residents are expected to either subsist on Social Security, or not be able to retire at all. The report found that employers have become less willing or able to sponsor pensions – a trend that is true across most industries and occupations, and affects New Yorkers of nearly all ages and income groups. The brewing retirement crisis cuts across racial, ethnic and gender lines.

The Automatic Stabilizing Effects of Social Security and 401(k) Plans
Authors: Teresa Ghilarducci, Joelle Saad-Lessler and Eloy Fisher
Date: December 2011 
As the first-ever comparative study of how large pension institutions impact the long-term business cycle, the study compares the effects of Social Security against market-based retirement vehicles such as 401(k) plans. It finds that 401(k) plans magnify the effects of the recession by de-stabilizing the economy. In fact, they significantly undermine the benefits of other stabilizing programs by 15%, including the federal income tax, unemployment insurance, and Medicare and disability insurance.

Wall Street's Stake in Pension Reform
Authors: David Stubbs and Teresa Ghilarducci
Date: July 2011
This study is the first to examine how major pension proposals will affect Wall Street firms. Any change to the system will greatly affect the nation's financial industry, as 21% of assets under management are retirement assets. The leading reform proposals for the U.S. employer-based pension system will change the configuration of retirement products and management arrangements. 

Pension Reform’s Stake in Employers
Authors: Daniela Arias and Teresa Ghilarducci
Date: February 2011 
Employers are the heart of the American pension system and yet they are not well understood by policy makers despite the great influence of Congress on pension design through both regulation and favorable tax treatment of retirement accounts. Employer contributions to employee pensions have remained stagnant and, in some cases, even declined. We conclude that the cause is a flawed system and one that is subsidized by Congress, making employers "race to the bottom." 

Calculating Retirement Tax Expenditures: 2010
Authors: Teresa Ghilarducci
Date: January 2011
Department of the Treasury's Office of Management of the Budget and the Joint Committee on Taxation for the House Committee on Ways and Means and the Senate Committees on the Budget calculate federal tax expenditures differently. Research institutes and policy think-tanks use data from both agencies to make projections and policy prescriptions. Knowing the size of tax expenditures provides a clear understanding of the size of the government and sharpens our questions about the reasons for the $121 billion tax break for pensions.

Modeling a Guaranteed Retirement Account System in the United States 
Author: David Stubbs    
Date: June 2010    
Retirement USA (R‐USA), a group representing think tanks, unions, advocacy groups and academics working to secure Americans’ retirement, has identified ten core principles for the design of a quality pension system of the future. The only reform proposal that fulfils each of these requirements is the Guaranteed Retirement Account (GRA). As part of the ongoing research into the GRA, this working paper seeks to model the size of a present day, federal GRA system in the United States.

Guaranteed Retirement Accounts: What is a Credible and Safe Real Rate of Return?
Author: David Stubbs    
Date: June 2010    
The question of achievable returns on pension funds now has a central place in the debate about the future of retirement. The paper looks at what returns pension funds can realistically deliver in the long term and tries to determine whether a public pension system like a GRA could guarantee a return of 3% above inflation, without an undue risk of becoming a major drag on the Federal Budget.

Employer Survey Results
Author: Daniela Arias
Date: June 2010
Employers and plan sponsors are worried about the lack of preparation their employees have for retirement. We find that more than 70% of the employers surveyed have no confidence that the Social Security system will have enough funds for their employees' future years; this, in hand with an ineffective retirement program leads an overwhelming 58% of employer respondents to predict that future generations will be worse off than Americans today.

The High Cost of Nudge Economics and the Efficiency of Mandatory Retirement Accounts
Authors: Daniela Arias, Daniel Samaan and Teresa Ghilarducci
Date: November 2009 
This paper compares three ways to promote more retirement security through the tax code: (1) the current system of tax deductions for 401(k) and IRA-type plans; (2) the auto-IRA proposal linked to the Obama administration, which is based on a public policy framework colloquially known as "nudge economics," and (3) subsidized mandatory accounts called Guaranteed Retirement Accounts (GRAs). The focus is on how the three methods promote efficiency and how tax expenditures for retirement accounts can achieve public policy goals for the least cost.  

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