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ERIC Number: ED205091
Record Type: Non-Journal
Publication Date: 1981-May
Pages: 41
Abstractor: N/A
Reference Count: N/A
Can Anyone Afford to Retire in an Age of Inflation? AIR Forum 1981 Paper.
Jenny, Hans H.
The adequacy of pension plans for persons retiring from colleges and universities is considered. Data are presented showing that people who retired in the late 1960s and early 1970s from higher education institutions at ages 65 and 68 spent most of their working lives earning less than $10,000 a year. The phenomenon of low pensions in an age of rapid inflation for a group of retirees at a liberal arts college is illustrated. The examples are based on a Teachers Insurance Annuity Association/College Retirement Equity Fund (TIAA/CREF) defined contribution plan where the level of employee/employer contributions plus TIAA/CREF investment performance define the outcome. Length of service has little or nothing to do with the size of the pensions, but the person's age does correlate well with pension size, and a person's sex, rank, and specialty also have an influence. In addition to pension plan income plus social security benefits, each employee has some responsibility for voluntary savings toward retirement. Based on investigations of a group of retirees, it is concluded that the CREF annuity unit decreases have worked serious economic hardships on more than half the study sample. However, it is suggested that by focusing on the annuity unit value, one ignores the fact that the reinvestment of dividends bought additional accumulation units. Approaches to protect annuitants against inflation are proposed, and it is recommended that CREF report to its participants the quantity of accumulation units purchased monthly and the number of shares purchased through dividend reinvestment. (SW)
Publication Type: Opinion Papers; Speeches/Meeting Papers
Education Level: N/A
Audience: N/A
Language: English
Sponsor: N/A
Authoring Institution: N/A