Data culled by the Employee Benefit Research Institute (EBRI) shows that Social Security remains a significant source of retirement income for higher income earners, not just for those with low wages. In 2006, EBRI says Social Security was the largest source of income for those currently age 65 and older, accounting for 39.8% of their income on average. Income from pensions and annuities was 19.3%, income from assets 15.4%, and income from earnings was 23.7%. Also, in 2006, women received a larger share of their income (47.8%) from Social Security than men (34%), EBRI found. The lowest income quintile of elderly (those with less than $8,261 in annual income) received 87.6% of their income from Social Security. The highest income quintile (those with more than $34,570 in annual income) received 18.5% of their income from Social Security in 2006.
A new report by the Consumer Federation of America (CFA) and Wachovia reports that more than half of Americans (52%) say they can’t afford to save or are saving inadequately. The survey, conducted by Opinion Research Corp. in November 2007, polled 2,000 adults. When asked whether they think Americans are saving adequately, 79% said they are not, with nearly half (47%) saying Americans are saving “very inadequately.” College educated folks (86%) are the most likely Americans to feel they aren’t saving enough. Seventeen percent of those polled said they’re not saving at all, while 35% say they are saving but not enough to meet short- and long-term financial needs. Of the more than 1,000 respondents who said they are not saving enough or could not afford to save, 72% cited having higher regular expenses as the reason they couldn’t save, while 72% said unexpected expenses kept them from socking away any money. Low or unreliable incomes was listed by 66% as the reason they couldn’t save, and 60% said large consumer debts hampered their ability to save.
The Equal Employment Opportunity Commission (EEOC) announced recently that employers can legally eliminate or reduce health benefits for retirees when they reach age 65 and become eligible for Medicare while retaining benefits for retirees younger than age 65. The ruling, published in the Federal Register, allows employers to create two classes of retirees–those younger than age 65 and those older than 65–and offer different benefits to each group. In addition, the ruling allows employers to eliminate or reduce benefits provided to spouses or dependents of retirees older than 65. In announcing the decision, EEOC Legal Counsel Reed Russell said, “Our rule makes clear that it is lawful for employers to continue to provide retirees with the health benefits they currently receive. Contrary to what some interest groups have erroneously asserted, the rule will not require any cuts to retiree benefits.”
Sean Kelly, CFA, joined Eaton Vance Distributors Inc. on December 17, 2007, as head of defined contribution and sub-advised distribution. In this role, Kelly will report to Matthew Witkos, president of Eaton Vance Distributors, and will oversee the firm’s Sub-Advisory and Defined Contribution Investment Only (DCIO) business. Kelly, 44, joined Eaton Vance from Evergreen Investments, where he served as senior VP and Managing Director in the Institutional Asset Management Group, leading the firm’s sub-advisory and DCIO business.