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The Average Retirement Savings by Age

If you’re like the majority of people, you probably need to step up your retirement-saving efforts. A recent report from the Government Accountability Office (GAO) found that the median retirement savings for Americans between age 55 and 64 was $107,000. The GAO notes this sum would only translate into a $310 monthly payment if it was invested in an inflation-protected annuity.

Household savings in all retirement accounts have dramatically increased since their pre-recession levels, including among millennials ($9,000 in 2007 to $36,000 in 2017), Generation X ($32,000 to $71,000), and baby boomers ($75,000 to $157,000), according to a Sept. 2018 report from the Transamerica Center for Retirement Studies.

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Older Workers Unable to Retire Cost Employers $50,000 a Year

Because many employers are unaware of the cost of having older workers unable to retire, or think they cannot calculate it, Prudential Financial has done the analysis and published its findings in the report, “Why Employers Should Care About the Cost of Delayed Retirements.”

For each individual who cannot retire, the cost averages an extra $50,000 a year, representing the difference between the salary of an older worker and hiring a younger person, according to Prudential. The annual cost across a workforce is an additional 1.0% to 1.5% a year.

For example, consider a company with 3,000 employees and workforce costs of $200 million. A one-year delay in the average retirement age would cost the firm between $2 million and $3 million. A two-year delay would average an additional 2.2% in workforce costs, and a three-year delay, 3%. In addition, health care costs for a 65-year-old are twice that of a worker between the ages of 45 and 54, Prudential says.

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Employers are scaling back their dependence on high-deductible health plans

Everything old is new again. As open enrollment gets underway for next year’s job-based health insurance coverage, some employees are seeing traditional plans offered alongside or instead of the plans with sky-high deductibles that may have been their only choice in the past.

Some employers say that, in a tight labor market, offering a more generous plan with a deductible that’s less than four figures can be an attractive recruitment tool. Plus, a more traditional plan may appeal to workers who want more predictable out-of-pocket costs, even if the premium is a bit higher.

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Many Demands on Middle Class Paychecks

Ask middle-class Americans how they’re doing, and you’ll often get the same answer: there are still too many demands on my paycheck.

Several recent surveys reach this conclusion, even though wages have been rising consistently at a time of low inflation.

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Medicare Part D’s Effect on Evergreening, Generics, and Drug Prices

The brief’s key findings are:

  • Medicare Part D, introduced in 2006, has clearly helped seniors by expanding
    drug coverage, but a key question is how it has affected the cost of drugs.
  • By boosting demand and shifting market power from manufacturers to insurers, Part D could affect the behavior of both brand-name and generic drug producers.
    • Brand-name firms could be more likely to maintain monopoly power by
      making small changes to their drugs (“evergreening”); and
    • Generic firms – with no such leverage – might be less likely to introduce
      alternatives due to a greater loss of bargaining power to insurers.
  • The analysis finds that Part D has, indeed, increased evergreening and reduced
    generic entry, and both effects have put some upward pressure on drug prices.
  • Overall, though, Part D has kept drug prices lower than they otherwise would
    have been.

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What Happens When You Don’t Pay a Hospital Bill

As Americans sink under medical expenses, debt collectors go to great—and sometimes strange—lengths to collect.

On March 8, 2011, Joclyn Krevat, an occupational therapist in New York, was sitting at her computer when she received a most unusual LinkedIn request. The wording was the familiar: “I’d like to add you to my professional network.” The sender was familiar, too, but not for the reason Krevat expected. It was from a debt collector.

Karen Pollack, the head of a debt-collections practice called KP Recovery Solutions, had been trying to collect on some medical bills Krevat had recently incurred for a heart transplant. Krevat’s debts, which were reviewed by The Atlantic, made up plot points in the worst kind of American health-care horror story. In December 2009, Krevat, who was 32 at the time, thought she was coming down with the flu. Instead, she was admitted to the hospital and diagnosed with giant cell myocarditis, a severe inflammatory heart disease that can lead to heart failure. After seven weeks on life support, a heart became available, and she had a transplant. For a year afterward, she wasn’t able to return to work.

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Retirement? Four in 10 Americans don’t see it ever happening

Almost 40% of Americans lack confidence they will ever save enough money to retire. That number climbs even higher among older Americans, age 54 or more.

That’s despite nearly one in five Americans who said having enough money saved to be able to retire is their most important financial goal, according to a survey of 1,000 adults conducted by LendEDU in May.

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Firefighters Better Able to Track On-The-Job Exposures to Deadly Carcinogens and Behavioral Health Impacts

New mobile app gathers valuable physical and behavioral health data to help firefighters battle occupational disease.

Chantilly, VA. Firefighters and Paramedics on the frontlines protecting their communities now have a valuable tool for recording and providing evidence of work-related exposures to help protect them against deadly cancers and other occupational hazards in the fire service.

The new National Fire Operations Reporting System (NFORS) Exposure Tracker is now available as a mobile app for firefighters, paramedics and officers so that they can create a personal diary for logging both physical and mental exposures and incident details in a private, encrypted and secure online environment.

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THE IMPLICATIONS OF SOCIAL SECURITY’S “MISSING TRUST FUND”

As policymakers consider restoring financial balance to Social Security, understanding the reason for the shortfall is important. If the cost of currently scheduled benefits simply exceeds what today’s workers are paying into the system, the traditional proposals to reduce benefits or raise payroll taxes would be most relevant. However, the cause of the shortfall lies elsewhere. Specifically, the program’s “pay-as-you-go” approach – with the exception of the recent build-up and spend-down of a modest trust fund in anticipation of the baby boom – makes the program expensive. This financing approach is the result of a policy decision in the late 1930s to pay benefits far in excess of contributions for the early cohorts of workers. The decision essentially gave away the trust fund that would have accumulated and, importantly, gave away the interest on those contributions. This brief, based on a recent paper, explores the implications of the “Missing Trust Fund.”

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Pennsylvania law requires multiple record keepers for 403(b), 457 plans

A new law in Pennsylvania will require school districts sponsoring certain retirement plans to use at least four service providers, which advisers say runs counter to best practices and will perpetuate an environment of higher record-keeping and investment-management fees.

Beginning July 1, school districts will need to have a minimum of four “financial institutions or pension management organizations” (i.e., record keepers) for 403(b) and 457 plans, which are defined-contribution plans for nonprofit and public-sector entities.

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