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Social SecurityEighty years ago today, President Roosevelt signed into law the Social Security Act, creating one of our nation’s most important social programs. Since 1935, Social Security has kept millions of working Americans out of poverty, allowing them to live with dignity through the difficulties of old age or the loss of spouses and parents. Today, the program lifts nearly 15 million seniors and 1.2 million children out of poverty.

For years, retirees have relied on a combination of Social Security, employer pensions, and other savings, to support their retirement. Over the past few decades, the number of employers who provide pensions have decreased. Additionally, stagnant wages and wealth inequality mean many working people are unable to save enough during their work-life to support them throughout retirement.

A recent report from the U.S. General Accounting Office shows that across the nation, 29% of people age 55 or older have neither an employer pension nor any type of retirement savings. North Carolina is no exception. Between 2001 and 2013, the percentage of employees without employer provided pensions rose continuously. Today, more than 60% of working North Carolinians over 18 have no employer pensions, and one in three retirees depends on Social Security benefits as their only source of retirement income.

More than ever before, Social Security benefits are a crucial staple in retirement security.

Social Security does much more than fund retirement. Read More

News

The News & Observer reports that when faced with questions about why the Senate included a provision in its budget proposal that would end retirement health care for future teachers and state employees, some Senate leaders wouldn’t talk.

Sen. Tom Apodaca, who chairs the Pensions, Retirement and Aging Committee, said he couldn’t comment on the proposal because it came from the Senate’s top budget writers – not his committee. And Sen. Harry Brown, one of the chamber’s lead budget writers, walked away from a reporter without speaking when asked about the change.

Calls from N.C. Policy Watch to Senators Brown and Jerry Tillman (R-Randolph) also went unanswered as we worked on a story last week highlighting the budget provision, which would eliminate state-paid health retirement benefits for teachers and state employees who are hired after January 1, 2016.

Senator Phil Berger’s office did talk to the N&O, however.

“North Carolina has a massive $26 billion unfunded liability for retiree medical coverage, and the Senate budget is a prudent way to address the long-term viability of the State Health Plan,” said Shelly Carver, a spokeswoman for Senate leader Phil Berger.

Chuck Stone, lobbyist for the State Employees Association of NC (SEANC), told the N&O (as well as Policy Watch) that the Senate’s plan isn’t the way to go.

“Once you take [the health retirement benefit] away, what incentive is there to work for the state?” said Stone. “We are in a rush to have the worst State Health Plan coverage in the United States of America.”

Check out Chris Fitzsimon’s column on the Senate’s plan to end health retirement benefits for future teachers and state employees published this morning.
Uncategorized

Worried you haven’t saved nearly enough money for retirement? You’re not alone. A new study by the Pew Research Center finds fewer Americans feel confident they have enough to last through retirement.

While Baby Boomers worried the most about their retirement nest eggs in 2009, this new study finds those in their late 30s most concerned about their retirement outlook.

So why are 30-somethings more worried? Here’s what researchers found:

In terms of wealth, adults ages 35 to 44 were hit disproportionately hard by the Great Recession. At the same time, this age group has disproportionately failed to benefit from the Great Rebound in stock prices that began after the recession ended three years ago. The reason is that a larger share of 35- to 44-year-olds got out of the stock market between 2001 and 2010 and were on the sidelines as stock prices began to increase in 2009, according to the Pew Research analysis of data from the Survey of Consumer Finances.

The S&P 500 Index peaked at 1,576 in October 2007 but then fell to a modern low of 667 in March 2009. Since then, the stock market began a steady rise, closing at 1,258 on the last day of December 2010. It now stands at about 1,450, nearly back to its earlier peak.

The magnitude of these fluctuations nearly matches the collapse of the market just a few years earlier when the S&P 500 hit its previous high of 1,553 in March 2000, only to lose half its value to finish at 769 in October 2002.

During this decade of wild market swings, ownership of stocks and retirement accounts, such as 401(k) and thrift accounts, fell among most age groups. But the declines were greatest among those ages 35 to 44. Read More