Who is covered under HB1134

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I am planning on retiring on June 1, 2015 with 12 years of service and I am 62 years old. Would I be included in the HB1134 - as State Health Care Incentive.
Yes, as it is written now, the proposed bill includes certain state employees who retire on or after March 1, 2015 and no later than November 1, 2015. See our previous Rumor Central post on this bill here: http://mosersrc.blogspot.com/2015/03/health-insurance-retirement-incentive.html.

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Part-Time Employment & Reemployment

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We received two similar questions about part-time work and reemployment, and below are our answers to both:

How does switching to part time impact my retirement?
How many hours per month can I work without jeopardizing my retirement benefits?
Temporary and part-time positions are not usually benefit-eligible, and are not generally counted as service credit for retirement purposes. You will only receive service credit for periods that your employer reports you worked in a benefit-eligible position.

A position is benefit-eligible if it meets these two criteria:
  1. The position must be in the nature of an ongoing (a multi-year position including a position covered by a contract) or permanent position. 
  2. The position must normally require the performance of duties of not less than 1,040 hours per year. 
If the position meets both requirements, the position is eligible for MOSERS benefits. If not, the position is not eligible for MOSERS benefits.

If you are already retired and return to work in a part-time position, which is ongoing or permanent and normally requires the person to work 1,040 or more hours per year, the position should be reported by your employer as benefit-eligible and MOSERS will stop your retirement benefit. In other words, you would be considered a benefit-eligible employee once again and the retirement benefit would stop for as long as you  continue to work in such a position.

Returning to work in a “position” that is not benefit-eligible will not cause your MOSERS retirement benefit to stop.

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Friday Top Five: Retirement Related News for 3/27/15

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As many Americans have been doing, I was watching some exciting NCAA basketball recently. While I was watching the game, I noticed some interesting similarities between the basketball game and retirement planning. You may be wondering, how could two activities so different have any similarities? Well, let me explain through the four ideas I have listed below:

From Benefits Pro: Retirement getting unprecedented attention

The Insured Retirement Institute, citing action by regulators, proposed legislation in Congress and the creation of a new retirement caucus on Capitol Hill, suggested on Thursday that the nation is at a watershed moment with respect to retirement issues.

“There has never been more focus on retirement security issues in Washington, and there has never been a greater commitment from our policymakers to tackle these challenges head-on,” IRI CEO Cathy Weatherford said in addressing attendees at the association’s 2015 Marketing Summit.

From The New York Times: The Giant Retirement Community That Explains Where Americans Are Moving

The Villages, Fla., an hour northwest of Orlando, may be the only retirement community that is also the center of its own census-designated statistical area. It also holds another distinction: In 2014, its population rose more quickly than that of any other census area in the United States, climbing 5.4 percent, compared with 0.7 percent for the nation as a whole.

As it turns out, the rapid population growth in the Villages and other high-ranked places in the latest detailed population data issued by the census on Thursday tells a simple, powerful story about where the American population is heading.


STARTING IN 1967, the Missouri Local Government Employees Retirement System (LAGERS) initially served 10 units of government; it has since grown to 665 voluntary employer members—cities, counties, fire protection districts, libraries and other public service branches across Missouri.

As for the state’s workers, Executive Director Keith Hughes, in Jefferson City, says, “If an employer makes an election for participation, then all full-time employees shall participate in the plan.” The system now covers more than 33,000 active employees; 19,000-plus retirees; and roughly 8,000 deferred annuitants, “meaning they’re vested employees eligible for a benefit when they attain retirement age,” Hughes says. Retirement age for Missouri workers is 60 for general employees and 55 for firefighters and police officers.

From Plan Sponsor: ICI Measures Retirement Assets at $24.7 Trillion

An analysis from the Investment Company Institute (ICI) finds retirement assets of U.S. investors reached $24.7 trillion as of December 31, up 1.7% during the year’s final quarter and 6% from year-end 2013.

With the year-end 2014 results, retirement assets now account for approximately 36% of all household financial assets in the United States, ICI says.  

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BackDROP options

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What do most retirees elect to do with backdrop funds? What are options with keeping them with the state for disbursement?
To answer your first question, 78% of the total amount of BackDROP distributions was rolled over to tax favored savings arrangements such as IRAs or the Missouri State Employees Deferred Compensation Plan as of January 2015.

State employees eligible to receive a lump-sum BackDROP payment can choose to roll that money into the State of Missouri Deferred Compensation Plan at retirement.  This option is available to all state of Missouri employees, even if they have never participated in the deferred compensation plan. Doing so is an attractive choice for many because it allows employees to consolidate the lump-sum payment with their existing retirement savings. This makes managing their savings in retirement easier and grants them continued access to the Plan’s low fees and custom investment solutions. Another popular reason to roll the lump-sum payment into the deferred compensation plan is that it allows employees to defer taxes on the payment until those assets are distributed in retirement. In 2014 alone, just under 500 state of Missouri employees rolled their BackDROP payment in to the deferred compensation plan.

We suggest you speak to a tax professional or financial advisor for advice specific to your situation and to discuss all of your options at retirement.  

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Friday Top Five: Retirement Related News for 3/20/15

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From BenefitsPro: Public pension picture darkened by few states

Most state and local governments have fully funded their annual pension obligations over the past dozen or so years, with only a small number failing to do so.

That unfairly skews the overall numbers for public pensions, the National Association of State Retirement Administrators said in a report whose conclusions run counter to the popularly held belief that the public defined benefits model is in bad shape.

From Time Money: Here’s How to Tell If You’re Saving Enough for Retirement

This month's MONEY poll looks at our habits when it comes to retirement savings. Click through the gallery to see how you compare with your fellow readers.

From Forbes: Social Security Q&A: Can My Husband Collect both Retirement and Divorced Survivor's Benefits?

Social Security may be your largest or one of your largest assets. How you manage it, by deciding which benefits to collect and when, can make an absolutely huge difference to your lifetime benefits. And those with the highest past covered earnings have the most to gain from maximizing their Social Security.

I’ve been answering questions and writing columns about Social Security each week for the past two years on PBS NEWSHOUR’s website. The editors at Forbes asked me to post a Q&A each day from those columns. To see all my columns, please go to my software company’s site, www.maximizemysocialsecurity.com, and click More Press below the WSJ quote.

Today’s question asks if, after remarriage past age 60, it’s possible to collect both a retirement benefit and a divorced survivor’s benefit at age 79. The answer reviews benefits available for those who remarry after 60 and notes some provisions that limit the benefits available in this case.

From BenefitsPro: Financial anxiety afflicting most Americans

Financial anxiety – including an unsettled feeling about not doing enough to prepare for retirement – could be crippling the nation’s workforce, according to a survey from State Street Global Advisors.

Student loans, mortgages and health care costs were acknowledged as taking an emotional toll on 60 percent of the respondents surveyed. Thirty-seven percent admitted financial stress was causing their productivity to suffer.

From SanDiego Source: Don't be afraid of saving for retirement

Go back about 40 years ago and “The Exorcist” was scaring moviegoers across the United States. 1974 was also the year Congress approved a simple plan to help people prepare for their golden years: the Individual Retirement Account.

People are scared today not by the movie but the challenge to save and invest enough to get them through their golden years.

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BackDROP Information

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Where can I find info about working into my backdrop?
If your question is, “Do I need to fill out a form or notify anyone when I start working into my BackDROP period?”  The answer is no.  You just keep working. You don’t need to notify MOSERS of any decisions about BackDROP until you retire. You must work at least two years beyond when you are first eligible for normal retirement to be eligible for BackDROP. BackDROP provides a lump-sum payment in addition to your ongoing monthly benefit payment in retirement.
MOSERS has many different resources to find out more about BackDROP.* Besides the member handbook, there is a BackDROP page with links to many resources on our website, including the BackDROP brochure. We have also answered many  Rumor Central questions, which you can search on our blog by clicking on Categories and then selecting BackDROP. You can review your own retirement benefit estimates that compare your retirement eligibility dates with and without BackDROP. You can request this from a benefit counselor by calling (800) 827-1063, or generate your own by logging into your secure Member Homepage and going to the Estimates option.

BackDROP is one of the benefits addressed in our PreRetirement Planning seminars, which are conducted around the state for members of the MSEP and MSEP 2000. View the 2015 schedule, and log in to register for a location in your area. You will also receive a benefit estimate by attending a PreRetirement seminar, and you can specify when you register that you would like the estimates to include BackDROP.

* Note: The BackDROP is available to general state employees in the MSEP and the MSEP 2000.

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Health Insurance Retirement Incentive

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I heard a rumor there was legislation proposed that would offer 5-years of health insurance coverage to state employee to promote early retirement - Is this true? If so, what is the status of that proposal?
House Bill 1134 has been proposed which would subsidize retiree health care premiums for certain state employees (except current or former members of the general assembly or statewide elected officials) who retire on or after March 1, 2015 but no later than November 1, 2015.

As it is currently written, the proposed legislation applies to employees who are eligible for normal retirement (not early retirement). It also limits the state’s ability to rehire for the positions that will be vacated by retirements except for Truman State University, Lincoln University, or any educational institution listed in Section 174.020.

On March 18 this billed was referred to the Select Committee on Financial Institutions and Taxation. As of 3/19/15, a hearing has not yet been scheduled and the bill is not on the House calendar. You can find copies of all versions of the bills, as well as actions and hearings, on the Missouri General Assembly's website.

You may also track all retirement legislation for public employee retirement plans at the Joint Committee on Public Employee Retirement website. 

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Divorce and Your Benefit Payment

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We’ve received several questions regarding divorce and your benefit payment. Here’s a breakdown of how divorce may affect your benefit payment:

Can my retirement benefit be divided if I divorce my spouse?

Yes, your retirement benefit from MOSERS may be considered “marital property.” If you were married at any time while actively employed in a MOSERS benefit-eligible position and are considering a divorce after vesting, your spouse may be legally entitled to receive a portion of your retirement benefit. Any amount up to 50% of the benefit accrued during marriage may go to your ex-spouse.  If you are not vested, you are not owed a future retirement benefit from MOSERS, and therefore there is nothing to divide.

What do I need to do to divide my benefits?

Your benefit is not automatically divided at the time of your divorce.  Here’s what we need you to do:
  1. You should discuss divorce proceedings with your attorney. Ask about your rights and options regarding marital property.
  2. Fill out our Division of Benefits (DBO) Estimate form and mail it to MOSERS or complete and submit it online.
  3. We will mail a DBO packet to you with a benefit estimate.
  4. Your attorney will need to prepare a DBO according to our sample packet and submit it to us for approval prior to your court date.
  5. Have the approved DBO signed by the appropriate parties, including the judge.
  6. Send the certified DBO to us.
As an alternative to the DBO, you may choose to divide the present value of your retirement at the time of divorce as a part of your property division. If this is your preferred route, we recommend you contact a professional who specializes in this service.

What happens if I already got divorced (prior to retiring)?

If you are already divorced, future retirement benefits may have been addressed in your divorce decree. Read through it and see. If you don’t have a copy, you may be able to get a copy from the county where the divorce took place. You may contact a MOSERS benefit counselor to discuss the matter and how it applies in your specific situation.

If your ex-spouse is entitled to a portion of your retirement benefits, their benefit payments will begin when you retire. Like your benefits, your ex’s benefits and COLAs will be based on the plan you retire under.  Your ex will not receive any formula increases, temporary benefit, or any portion of your BackDROP payment.

If you are in the MSEP 2011 and divorce before vesting, your ex may be eligible to receive a portion of your refunded contributions. You are not eligible to request a refund if your retirement benefit is subject to a division of benefit order.

What happens if I get divorced after retiring?

Your ex-spouse’s benefits will begin the month after your DBO is issued. If you get a DBO after you divorce, your ex will not receive back payments.  Upon death of either party, the DBO will automatically terminate. But if your ex dies, let us know! You may be eligible for a pop-up in your benefit.

You cannot change (even after divorce) your benefit payment option after your first benefit payment is mailed or electronically transferred by MOSERS. For example, if you elected a Joint & Survivor option upon retirement, and later get divorced, your ex-spouse is still eligible to receive benefits upon your death. You cannot designate a new retirement beneficiary. However, you can change your beneficiary on your life insurance.

What if I want more information?

You can read our Divorce & Your Retirement brochure or speak with a MOSERS benefit counselor.

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Tax Rates & Deferred Compensation

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When i retire, i want to pull what i have out of my deferred comp account. I am over 59 1/2 so i shouldn't have to pay any penalty, but what tax rate will i have to pay? And, do i have the option of pulling all of my money out of my account?
All withdrawals (distributions) from the deferred compensation plan will be subject to a 20% federal tax withholding. You also have the option of withholding additional state income taxes from your distribution, although you are not required to do so. As for how much you can withdraw, you do have the ability to receive a lump sum of your entire balance with the deferred compensation plan, but we encourage savers to read over the Distribution Options Guide prior to doing so.

It's important to note that the early withdrawal penalty you mentioned in your question does not apply to your savings in a 457 savings plan like the deferred compensation plan. Generally speaking, once you separate from service, you will not pay a penalty for accessing that money, even if you were younger than 59 ½. It's also important to remember that you are not required to immediately withdraw your money from the deferred compensation plan when you retire or leave state employment. Because it is an important employee benefit that provides low-cost access to custom investment solutions, a majority of retirees choose to keep their money in the Plan throughout retirement.

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Are Individual Retiree Pension Reports Available?

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Since the State kicks in an amount each year to fund retirement benefits, are individual retiree pension amounts publicly reported in a similar manner as state employee earnings are?
Effective 9-1-09, and in accordance with MOSERS' Board Rule 1-3, an online database called On the Money was posted on MOSERS’ website. This searchable database of benefit recipients includes pension information for retired elected officials, members of the general assembly, judges and administrative law judges. On the Money can be accessed at: www.mosers.org/en/About-MOSERS/On-The-Money.

MOSERS does not publish on its website a database of pension information for general state employees. However, in compliance with freedom of information (or “Sunshine”) public records requests, MOSERS’ Member Confidentiality policy states,
MOSERS is required to provide, upon written request, the following information with regard to benefits: name, department, benefit amount, and length of service. MOSERS will provide the requestor with the following information with regard to any present or future benefit recipient who is receiving or may be eligible to receive a benefit in the future under any benefit program administered by MOSERS: the benefit recipient’s name, eligibility to receive a benefit, dates when a benefit was or will be payable, and current or estimated future benefit amount.

All other member records shall be kept confidential unless:
  • The benefit recipient consents in writing to the release of the information
  • The information is requested by the benefit recipient’s legal representative
  • The information is requested pursuant to a subpoena or other legal process as provided by law including, but not limited to Sections 104.312 or 104.1051, RSMo
  • Disclosure is made by MOSERS for a purpose that is compatible with the purpose for which it was collected

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Missouri Taxes for Out of State Retirees

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I will be moving to another state after I retire. Will I forever have to file a Missouri tax return since my pension will have a Missouri source?
No, not as it relates to your MOSERS pension if Missouri is not your state of legal residence. MOSERS will withhold state taxes only for Missouri residents. We recommend you contact the appropriate state and local tax authorities in your new location to determine the taxability of your MOSERS benefit.

We would suggest that you specify your federal tax withholding preferences by completing a Substitute W4-P(Tax Withholding for MOSERS Benefit Payments) form when you retire, which you can do by logging into your secure Member Homepage on MOSERS’ website. If you do not choose one of the federal tax withholding options on the form, MOSERS is required by law to withhold federal taxes as if you elected married with three allowances.

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Friday Top Five: Retirement Related News for 3/13/15

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From Bloomberg Business: The Retirement Savings Gap Between Haves and Have-Nots Is Getting Bigger

Yeah, it's depressing, but there are lots of ideas how to alleviate the crisis, say the authors of a new report.

With the stock market up, the housing market largely recovered, and unemployment down, you'd think Americans would be in better shape to retire than they were in 2007. The opposite is true, according to a study released today by the National Institute on Retirement Security. While the value of 401(k) retirement savings accounts and IRAs hit a record high of $11.3 trillion at the end of 2013, the average American household isn't sharing in that wealth. The following three charts sum up the problem nicely.

From The Washington Post: Finance Lab: He’s $90,000 in debt and six years from retirement

English Brent Taylor is just a few years from retirement, but before he can take it easy, he needs to tackle a burden more seniors are carrying: debt.

At 67, Taylor is working to pay off close to $90,000 in debt before he leaves his full-time job with the help desk for James Madison University. He began collecting Social Security retirement benefits last year so that he could accelerate payments on about $15,000 in credit card debt, $27,000 total on three car loans and the $45,000 remaining on his mortgage. His goal: to pay it off within six years, just around the time he hopes to stop working full time.

From USA Today: What's the best retirement advice you ever got?

I never had the opportunity to get retirement advice from my dad. He died at 43, when I was only 16. He never even had a chance to experience retirement. I've often wondered what he would have told me and my two brothers.

So, I talked to people from all walks of life from around the country over the past few months, and I put the same question to each of them: What was the best retirement advice you ever got, and who gave it to you? Turns out the advice came from everywhere — moms, dads, teachers and even mentors. It's all good solid advice that I'm sure many of us would have loved to receive, especially when we were in our 20s.

From USA Today: Hate investing? Target-date funds are for you

If you watch financial advertising, you know that you should spend your days tracking your portfolio, trading frequently, and, well, tracking your portfolio.

Oddly enough, many people find other things that they would rather do in life, such as reading a book, traveling the world, or sorting bolts in the garage. If you're one of those people, then you probably should invest in a target-date retirement fund.

From Money Girl: 3 Common IRA Mistakes that Steal Your Wealth

One of the best ways to save for retirement is to make regular contributions to an Individual Retirement Arrangement or IRA. Although these special, tax-advantaged accounts are available to just about every American with income (including non-earning spouses), many are passing them up.

Some simple misunderstandings about how IRAs work may be keeping you from shoring up your financial security. In this episode, I’ll tackle 3 common mistakes you should be aware of, so you can use IRAs to successfully build wealth.

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Layoffs, Dismissal, & Your Contributions

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I have heard that if you are involuntarily dismissed from your position that you may or may not be entitled to your retirement benefit, even if you are vested. Can you clarify this?
Employees who are vested  (after 5 years of employment in MSEP and MSEP 2000 and after 10 years in MSEP 2011) are eligible for a future benefit once they meet the age and service requirements for normal retirement under the plan that they belong to. See this information about layoffs for more information and Which Plan am I In? for specific information about each retirement plan. The exception to this would be that you will forfeit your pension benefits if you are found guilty of a felony under state law (or a substantially similar offense provided under federal law) in connection with your duties as a state employee.

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March Spring Cleaning

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While the winds howl and we wait out the winter temperatures, here are five simple financial fitness exercises to do while you’re waiting for spring!

1. Clean up your beneficiaries

While you’re spring cleaning your house, take a few minutes to look at your 2015 Annual Benefit Statement or log in to our secure Member Homepage and check your beneficiaries.

2. Finish your taxes

Taxes are due April 15th, but filling out your forms early has multiple benefits. First, if you’re owed a refund, you’ll get it sooner rather than later. Second, if you owe the IRS or Department of Revenue money, it’ll give you time to arrange your payment before the deadlines. Third, it’ll give you time to catch potential mistakes. If you wade into your taxes now and discover there’s paperwork you don’t have or that it’s going to be a more complicated tax year than you anticipated, you’ll have more time to spend on your taxes.

Finally, filing your taxes early may avoid fraud. One scheme is to file on behalf on someone, but have the refund sent somewhere else. Once you file, no one can file in your place.

3. Start planning your kids’ activities.

While you’re thinking of warmer times during the freezing temperatures, it’s helpful to plan ahead for your children’s summer activities – you can work on your summer budget. Hulafrog is a good resource for kids’ activities and resources in your local community. You may also tap your local YMCA, Parks & Rec Office, or community center to find more resources.

4. Get support

Have you set a financial goal for the year? You may try approaching your financial goals like others approach their fitness goals – with a buddy! Having a support system for your financial habits can help reinforce efforts to control impulsive purchase, reward savings goals, and provide strategies to avoid financial setbacks.

5. Fill out FAFSA

If you have college-age children, the deadline for filing your FAFSA is coming up! You’ll need both your child’s and your tax returns to get the maximum amount of financial aid. Many colleges give scholarships and grants on a first come, first served basis. See the Federal Student Aid website for more information.

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Friday Top Five: Retirement Related News for 3/6/15

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From BenefitsPro: Congress forms retirement caucuses

A bipartisan congressional caucus dedicated to better understanding the country’s retirement landscape has been established.

Rep. Mike Kelly, R-Pennsylvania, and Rep. Richard Neal, D-Massachusetts, filed the paperwork to register the House Retirement Security Caucus last month, saying the group’s primary mission was to help Americans saving more.

From Plansponsor: Increase in Average Retirement Age Has Stalled

The leveling of the average retirement age suggests that earlier drivers of working longer are no longer having a substantial impact, according to a research report from the Center for Retirement Research at Boston College.

Alicia H. Munnell, director of the center, notes in the report that around the mid-1980s the labor force participation of men ages 55 to 64, and men 65 and older, started to gradually increase due to a number of factors:

From CBS MoneyWatch: With good reason, Americans stressed about affording retirement

Americans are anxious about their ability to live out their Golden Years with a measure of financial security. Those fears, unfortunately, are more than justified.

With about 10,000 Americans retiring each day, a growing number are leaving the workforce without pensions, with modest Social Security benefits or inadequate individual account balances. Factor in skyrocketing health care costs and the picture becomes even more alarming.

From Squared Away Blog: Wanna Retire? Find a Purpose

In this video by KUTT-TV in Anchorage, Alaska, Fred Keller and Judy Foster show off their retirement project: they transformed a 1976 pickup truck into an oversized replica of a Radio Flyer wagon they can drive around town.

While a new red wagon isn’t for everyone, it illustrates an important point: retirees need to find ways to remain active. Older people warn that retirement shouldn’t be viewed exclusively as a time to “relax,” a well-deserved break.  People who enter retirement expecting nirvana often find they’re bored stiff, or even depressed, due to an abrupt drop in productivity after decades of working. Retirees also spend a lot of time alone or watching television.

From Bloomberg Business: Your Kids Are Ruining Your Retirement

Cathy Egan has been supporting herself since she was 18, when she worked as a waitress in Minneapolis. Her 23-year-old son lives at home and relies on his single mother for transportation, food, and other expenses. Egan, now 50, only began putting money aside for retirement five years ago, after she started working as a licensed practical nurse for the Veterans Health Administration—her first job with benefits. Although she also has a son in high school, the single mother can’t bring herself to cut off her eldest, who earns $8.50 an hour plus tips delivering takeout orders part time for a restaurant in St. Paul. “Right now, I’m still the supporter,” she says.

Baby boomers are putting their retirements at risk by spending too much on their adult children. With real wages stagnant and unemployment among those age 16 to 24 running above 12 percent, large numbers of households continue to dole out cash to children no longer in school, covering rent, cell phones, cars, and vacations.

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