Unemployment Jumps among Workers Fifty-five and Older

Nearly 5% of workers age fifty-five and older were unemployed in December, 2008, a 58% jump from a year earlier. This marks the highest percentage since 1983, according to the U.S. Bureau of Labor Statistics.

General Motors Offers Early Retirement

General Motors (GM) is offering retirement incentives to 22,000 of its 62,000 United Auto Workers union members as part of the turnaround plan it must present to the Federal Government in return for the recent Government bailout. GM hopes that half of the eligible employees will accept the offer.

Social Security Is Swamped

Social Security is swamped, according to a report issued by the U.S. Government Accountability Office. With the agency's number of field-office workers dropping by 4% over the past four years, more than three million customers waited more than an hour to be served by the agency in fiscal 2007. Meanwhile, the agency estimates that retirement and disability filings will increase the agency's workload by about one million annual claims by 2017.

Applying for Social Security

The Social Security Administration has streamlined the process for applying for benefits online. In fact, it has cut the time involved to about fifteen minutes from about forty-five minutes. One big change is that the system has all but eliminated the proof-of-age requirement and the need to mail or carry a birth certificate to your local Social Security office.

For a glimpse of the online application process, go to socialsecurity.gov/planners/about.htm and click on "View a Demo of the Application."

Ask Medicare

Medicare has introduced a new online service called "Ask Medicare.” Designed as a one-stop resource for caregivers, it has four primary starting points: "Navigating Medicare," "Help With Billing," "Care Options" and "Overwhelmed? Get Help." The site also features a collection of caregiver stories, links to organizations that assist caregivers and beneficiaries, and a caregiver newsletter that Medicare will deliver to you as email. For more information, visit medicare.gov/caregivers.

More Small Businesses Adopt 401(k)s

Even amidst recession, many small-business owners are adopting 401(k)s for their employees for the first time ever. They see the plans as a way to retain valued workers and get people who would otherwise not save for retirement to do so.

To afford the plans, some companies are having to make some trade-offs, including delaying employer matches or offering the matches in lieu of raises. According to the President of 401khelpcenter.com LLC, a Portland, Ore.-based nonpartisan group that tracks 401k trends. "Employees . . . want to work for firms that help them meet other life goals like saving for retirement." But small firms have to be "pretty creative" about keeping 401(k) costs down, he adds.

Were It Not for Those 401(k)s

According to a survey by the Investment Company Institute, 43% of sampled households with 401(k)s said they probably would not save for retirement if they did not have a retirement plan at work.

Relief from Relief

A new law intended to relieve retirees and their battered nest eggs is causing some aggravation.

Owners of individual retirement accounts and 401(k)s who are over age 70 1/2, and those who have inherited such accounts, must withdraw a minimum amount from those accounts each year, based on their life expectancy. In December, lawmakers suspended that requirement for 2009, hoping to give investors a chance for their accounts to rebound after a brutal year in the markets.

That seemingly simple idea is giving headaches to investors, financial planners and retirement-plan custodians. As a result, retirees are getting mixed signals from retirement-plan administrators about how to go about suspending withdrawals and whether they are even allowed to do so. Meanwhile, plan administrators are complaining that the Internal Revenue Service and Treasury Department have yet to provide adequate guidance. In the meantime, some custodians are still mailing checks even to retirees who want their withdrawals suspended while other custodians are stopping payments without authorization from account holders.

For those who want their withdrawals suspended but cannot get through to their plan administrators, there is a backstop: the "sixty-day rule." IRA owners can generally roll unwanted withdrawals back into their accounts as long as they do so within sixty days. They may do one such rollover per account once every twelve months.

Johns Hopkins Medical Bulletins

Johns Hopkins University is publishing two valuable online health resources: (1) "Health After 50," a monthly newsletter and (2) “Johns Hopkins Health Alerts,” These service are designed to educate users on "major medical conditions which affect healthy living, particularly over age 50." The email alerts provide links to twenty topics from anxiety to weight control. Some recent reports include "Men and the Blues" and "Botox: Not Just for Wrinkles." To sign up for these resources, visit johnshopkinshealthalerts.com.

The Unbearable Impact of Real Estate Investments: Pennsylvania

The Pennsylvania public school employee pension system, like other pension funds across the country, has lost billions in recent months. Its market value plunged from $62.7 billion in June 2008 to $45.4 billion at the end of the year. Like other pension funds, the Pennsylvania system boosted its allocation to real estate in the past decade. Real estate investments produced double-digit-percentage returns in boom times but they are proving troublesome in recession because they are not so liquid as stocks and bonds.