Families in Society, 88(3), July 2007, pp.453-462.
Publisher:
The Alliance for Children and Families
Lower-wage workers have always faced challenges in saving for their retirement years. As U.S. businesses increasingly adopt defined-contribution pension plans and emphasize individual responsibility and choice, what is the impact of this shift on the working poor? Lack of pension coverage is a significant concern because Social Security alone will not assure a comfortable retirement for lower-income workers. The survey of more than 300 lower-wage service workers revealed that significant predictors of retirement savings behaviour included greater financial literacy as well as greater job stability, stronger workforce attachment, and higher income. Employer-sponsored pension plans were the most frequently used savings option. The authors explore the potential impacts of the Pension Protection Act of 2006 (PPA) on lower wage workers’ retirement security and propose policy steps to reduce the risk of poverty being recycled into postretirement years.
Lower-wage workers have always faced challenges in saving for their retirement years. As U.S. businesses increasingly adopt defined-contribution pension plans and emphasize individual responsibility and choice, what is the impact of this shift on the working poor? Lack of pension coverage is a significant concern because Social Security alone will not assure a comfortable retirement for lower-income workers. The survey of more than 300 lower-wage service workers revealed that significant predictors of retirement savings behaviour included greater financial literacy as well as greater job stability, stronger workforce attachment, and higher income. Employer-sponsored pension plans were the most frequently used savings option. The authors explore the potential impacts of the Pension Protection Act of 2006 (PPA) on lower wage workers’ retirement security and propose policy steps to reduce the risk of poverty being recycled into postretirement years.
... less, among other reasons. Addressing the situation is increasingly critical as the retirement age for women increases to age 65. The Blueprint sets out four steps to change the system: ensuring individual rights to a pension (so that women can build up their own pension), providing a platform for savings, providing second a pension for all to particularly help the lowest-income individuals,
The report warns that the outdated UK pension system fails to take account of women’s needs or working patterns. Currently, one in five single women pensioner’s lives in poverty and women are less likely to have an occupational pension. This is in part due to women taking time out of the workforce for care giving, being more likely to work part-time or in jobs without a pension plan, and earning less, among other reasons. Addressing the situation is increasingly critical as the retirement age for women increases to age 65. The Blueprint sets out four steps to change the system: ensuring individual rights to a pension (so that women can build up their own pension), providing a platform for savings, providing second a pension for all to particularly help the lowest-income individuals, and making private and occupational schemes work better for women. Many of the issues and recommendations discussed in the report relating to the economic situation of older women will be relevant to policymakers throughout Europe.
As working lives shorten and retirement lengthens, there is concern over whether individuals make adequate provision to avoid poverty in old age. A study by Elena Bardasi and Stephen P. Jenkins of the Institute for Social and Economic Research examined the relationship between the risk of having a low income in later life and people's lifetime employment history. The study was based on data from
As working lives shorten and retirement lengthens, there is concern over whether individuals make adequate provision to avoid poverty in old age. A study by Elena Bardasi and Stephen P. Jenkins of the Institute for Social and Economic Research examined the relationship between the risk of having a low income in later life and people's lifetime employment history. The study was based on data from the British Household Panel Survey and a summary of the findings is presented here.
Children and Schools, 29(3), July 2007, pp.172-181.
Publisher:
Oxford University Press
This article reviews retirement planning trends, historical asset-building initiatives, and financial education programs in the United States and sets forth a proposal to expand on current social policy and program initiatives for youths to increase long-term financial planning among underserved and low-income populations.
This article reviews retirement planning trends, historical asset-building initiatives, and financial education programs in the United States and sets forth a proposal to expand on current social policy and program initiatives for youths to increase long-term financial planning among underserved and low-income populations.
Subject terms:
low income, personal finance, poverty, retirement, school social work, social policy, young people, education;
... benefits means that low-paid families can face high rates of marginal tax for at least 16 years. Families with children also face real dilemmas over their lifetime. Saving for retirement will make families poorer while there are children in the home but improve incomes in retirement. Failing to save for retirement reverses this so that avoiding child poverty may lead to poverty in retirement
In the short-term, policies to counter child and pensioner poverty and to promote work have produced positive results but further improvements will become more and more difficult to achieve. Policy focused on equal access to opportunities for low-paid people can fail because the opportunity is given too late to make a real impact on lifetime poverty or on long periods when savings and work incentives are seriously compromised. A lifetime 'opportunity trap' can exist where it is either too late or too costly to take up an opportunity or where taking it up has either no or only marginal impact on lifetime income profiles. Opportunity traps are heightened by having children - the combination of childcare costs, paying rent for family-sized accommodation, low pay and interactions with in-work benefits means that low-paid families can face high rates of marginal tax for at least 16 years. Families with children also face real dilemmas over their lifetime. Saving for retirement will make families poorer while there are children in the home but improve incomes in retirement. Failing to save for retirement reverses this so that avoiding child poverty may lead to poverty in retirement (the 'lifetime poverty see-saw'). Escaping from opportunity traps is difficult without raising earning capacity. Low-paid people may be able to catch up on one dimension of inequality but it would be very difficult to equalise life chances without combinations of generous pensions and good earnings progression. One-off interventions to raise income up to the average, such as retraining, are potentially more effective in reducing inequalities in life chances and bringing lifetime opportunities up to the average.
... on social security systems. The demographic pressures on social security systems will be manageable if accompanied by sustainable economic growth and high rates of labour market participation (1). One important supportive element would be a reversal of the trend towards early retirement (2). Addressing the close link between employment and social security from a different perspective, the third issue discusses the provision of income security for workers in precarious employment and in the informal economy who are either not covered or who are only partially covered by social security (3). The fourth issue revisits this issue from a broader perspective, focusing on the question of how much risk individuals should be expected to bear in preparing for retirement (4). Recognizing the importance
This contribution identifies a set of ten issues relating to ageing and sustainable social security and discusses them in the light of recent policy discussions and trends. The contribution starts by reviewing the effects of population ageing and the scope for political action and societal change, particularly in relation to employment promotion as the key to coping with demographic pressures on social security systems. The demographic pressures on social security systems will be manageable if accompanied by sustainable economic growth and high rates of labour market participation (1). One important supportive element would be a reversal of the trend towards early retirement (2). Addressing the close link between employment and social security from a different perspective, the third issue discusses the provision of income security for workers in precarious employment and in the informal economy who are either not covered or who are only partially covered by social security (3). The fourth issue revisits this issue from a broader perspective, focusing on the question of how much risk individuals should be expected to bear in preparing for retirement (4). Recognizing the importance of striking a viable balance between individual and collective responsibilities in income security in old age, the next issue places the accent on the need for security in income maintenance in old age (5). In turn, the role of the state in social protection in an ageing society is examined (6). Closely linked to these issues is the necessity to address gender equality in old age pension schemes (7). The negative effects of ageing populations on health care provision and long-term care schemes should be mitigated by a comprehensive adjustment strategy, including appropriate policy reforms and the better use of health care resources (8). The specific challenges of ageing populations for low-income (LICs) and middle-income countries (MICs), many of which face rapid demographic change under adverse economic and social conditions, is given special attention (9). Finally, the role social security plays as a prerequisite for active ageing is addressed (10).
Subject terms:
low income, pensions, poverty, retirement, risk, social policy, social care provision, ageing, benefits, demographics, expenditure, health care;