Boosting widows’ benefits could reduce poverty in retirement: Report

Our daily roundup of retirement news your clients may be thinking about.

Boosting widows’ benefits could reduce poverty in retirement: Report
The Center for Retirement Research at Boston College published a brief advocating the idea behind various proposals for Social Security to increase the program’s widow benefit. Those proposals would typically cap the size of the increase — based on the benefit of an average earner — to target it more to those most in need, according to the paper, called “Modernizing Social Security: Widow Benefits.” One way to fully offset the cost of an enhanced widow benefit is by reducing spousal benefits, “essentially shifting benefits from the period when both members of the couple are alive to the period when only one member is alive,” said the paper’s authors, Alicia Munnell, director of the center, and Andrew Eschtruth, associate director for external relations. It concludes that boosting the widow benefit, while limiting the size of the increase for higher earners, could be a “well-targeted way to help reduce poverty for this vulnerable group.”

social security checks1.jpg
Social Security checks are printed at the U.S. Treasury Philadelphia Finance Center in Philadelphia, Pennsylvania on February 11, 2005. Photographer: Dennis Brack/Bloomberg News

Retirement is in peril for most working class Americans, warns new report
A report from the National Institute on Retirement Security shows that most working-class Americans are facing bleak prospects in retirement, with nearly 80% of workers behind conservative retirement goals, according to this article from Forbes. The same number of workers have socked away less than one year’s income in retirement accounts, the report notes. “Fifty seven percent (more than 100 million) of working-age individuals do not own any retirement account assets in an employer-sponsored 401(k)-type plan, individual account or pension.”

The U.S. Social Security system is stronger than many people realize. Yet there are some long-term funding issues that need to be addressed. Here are some of the ways the feds could fix the system.
April 29

It’s never too late to save for retirement — but you’ll regret it if you wait too long
Clients who start building their nest egg early will be better off than those who defer their retirement saving, according to this article on MarketWatch. One advice that experts offer is to plan for retirement and crunch the numbers. “If you know that you need an extra $200 per month, then you know that if you eat out at a nice restaurant and are paying for family or friends, you just agreed to work an extra month PLUS however many hours after tax and benefits hours you need to work to earn the money to pay for it,” says a financial advisor.