Olivia S. Mitchell

Fall 2012: BEPP 250, Intermediate Microeconomics

All Courses

• BEPP2020 - Con Fin Decision Making

  Research shows that many individuals are profoundly underinformed about important financial facts and financial products, which frequently lead them to make mistakes and lose money. Moreover, consumer finance comprises an enormous sector of the economy, including products like credit cards, student loans, mortgages, retail banking, insurance, and a wide variety of retirement savings vehicles and investment alternatives. Additionally, recent breakthroughs in the FinTech arena are integrating innovative approaches to help consumers. Though virtually all people use these products, many find financial decisions to be confusing and complex, rendering them susceptible to fraud and deception. As a result, government regulation plays a major role in these markets. This course intended for Penn undergraduates considers economic models of household decisions and examines evidence on how consumers are managing (and mismanaging) their finances. Although academic research has historically placed more attention on corporate finance, household finance is receiving a brighter spotlight now-- partly due to its role in the recent financial crisis. Thus the course is geared toward those seeking to take charge of their own financial futures, anyone interested in policy debates over consumer financial decision making, and future FinTech entrepreneurs.

• BEPP2990 - Independent Study

• BEPP3050 - Risk Management

  The last financial crisis and subsequent recession provide ample evidence that failure to properly manage risk can result in disaster. Individuals and firms confront risk in nearly all decisions they make. People face uncertainty in their choice of careers, spending and saving decisions, family choices and many other facets of life. Similarly, the value that firms create by designing and marketing good products is at risk from a variety of sources. The bankruptcy of a key supplier, sharp rise in cost of financing, destruction of an important asset, impact of global warming, or a liability suit can quickly squander the value created by firms. In extreme cases, risky outcomes can bankrupt a firm, as has happened recently to manufacturers of automobile parts and a variety of financial service firms. The events since the Global Financial Crisis also offer stark reminders that risk can impose significant6 costs on individuals, firms, governments, and society as a whole. This course explores how individuals and firms assess and evaluate risk, examines the tolls available to successfuly mange risk and discusses real-world phenomena that limit the desired amount of risk-sharing. Our focus is primarily on explaining the products and institutions that will serve you better when making decisions in your future careers and lives.

• BEPP3220 - Bus Insr & Est Plng

  This course presents an analysis of overall private wealth management. This includes planning for disposition of closely-held business interests; the impact of income taxes and other transfer costs on business interests and other assets; integration of life insurance, disability insurance, medical benefits, and long-term care insurance in the financial plan; planning for concentrated asset (e.g. common stock) positions, diversification techniques, and asset allocation strategies; distribution of retirement assets; lifetime giving and estate planning; and analysis of current developments in the creation, conservation, and distribution of estates. Attention also is given to various executive compensation techniques (including restricted stock and stock options) and planning for various employee benefits. The course also covers sophisticated charitable giving techniques and methods for financing educaton expenses. Reading consist of textbooks, case studies, and bulk pack articles.

• BEPP8050 - Risk Management

  The last financial crisis and subsequent recession provide ample evidence that failure to properly manage risk can result in disaster. Individuals and firms confront risk in nearly all decisions they make. People face uncertainty in their choice of careers, spending and saving decisions, family choices, and many other facets of life. Similarly, the value that firms create by designing and marketing good products is at risk from a variety of sources. The bankruptcy of a key supplier, sharp rise in cost of financing, destruction of an important asset, impact of global warming, or a liability suit can quickly squander the value created by firms. In extreme cases, risky outcomes can bankrupt a firm, as has happened recently to manufacturers of automobile parts and a variety of financial service firms. The events since the Global Financial Crisis also offer stark reminders that risk can impose significant costs on individuals, firms, governments, and societ6y as a whole. This course explores how individuals and firms assess and evaluate risk, examines the tools available to successfully manage risk, and discusses real-world phenomena that limit the desired amount of risk-sharing. Our focus is primarily on explaining the products and institutions that will serve you better when making decisisions in your future careers and lives.

• DEMG9999 - Independent Study

  Primarily for advanced students who work with individual instructors upon permission. Intended to go beyond existing graduate courses in the study of specific problems or theories or to provide work opportunities in areas not covered by existing courses.

• FNCE2020 - Con Fin Decision Making

  Research shows that many individuals are profoundly underinformed about important financial facts and financial products, which frequently lead them to make mistakes and lose money. Moreover, consumer finance comprises an enormous sector of the economy, including products like credit cards, student loans, mortgages, retail banking, insurance, and a wide variety of retirement savings vehicles and investment alternatives. Additionally, recent breakthroughs in the FinTech arena are integrating innovative approaches to help consumers. Though virtually all people use these products, many find financial decisions to be confusing and complex, rendering them susceptible to fraud and deception. As a result, government regulation plays a major role in these markets. This course intended for Penn undergraduates considers economic models of household decisions and examines evidence on how consumers are managing (and mismanaging) their finances. Although academic research has historically placed more attention on corporate finance, household finance is receiving a brighter spotlight now-- partly due to its role in the recent financial crisis. Thus the course is geared toward those seeking to take charge of their own financial futures, anyone interested in policy debates over consumer financial decision making, and future FinTech entrepreneurs.

• The Ketchum Prize, 2019
• “Top 16 Powerhouse Female Economist”, 2019
• EBRI Lillywhite Award, 2017
• Roger F. Murray First Prize – Institute for Quantitative Research in Finance, 2017
• ICA Best Paper Award on Behavioral Aspects of Insurance Mathematics: Maurer, Raymond, Olivia S. Mitchell, Ralph Rogalla, and Tatjana Schimetschek. For their paper entitled “Optimal Social Security Claiming Behavior under Lump Sum Incentives: Theory and Evidence”, 2017
• Olivia Mitchell Named 2016 EBRI Lillywhite Award Winner, 2016
• CRAIN Top 100 Innovators, Disruptors, and Change-Makers in Business, 2016
• Top 10 Women Economists, World Economic Forum, 2015
• Investment Advisor Magazine “25 Most Influential People in 2011” and “50 Top Women in Wealth”, 2011
• Retirement Income Industry Association Award for Achievement in Applied Retirement Research, 2010
• Top 50 Women in Wealth, Wealth Management, 2010
• Roger F. Murray First Prize – Institute for Quantitative Research in Finance, 2008
• Roger F. Murray First Prize – Institute for Quantitative Research in Finance, 2008
• Carolyn Shaw Bell Award of the Committee on the Status of Women in the Economics Profession, 2008
• Fidelity Pyramid Research Institute Award, 2007
• Alexander von Humboldt-Stiftung Trans-Coop Program Research Award grant, 2005-2006
• Premio Internazionale Dell’Istituto Nazionale Delle Assicurazioni, INA, Accademia Nazionale dei Lincei, Rome, Italy, 2003
• Paul A. Samuelson Award for Scholarly Writing on Lifelong Financial Security, TIAA-CREF, 1999

• SENATE LAWMAKERS WORK TO ADDRESS SOCIAL SECURITY AND MEDICARE SOLVENCY, medillonthehill.edu - 02/16/2023
• Opinion: Social Security could be insolvent ‘within 8 years,’ economist warns, Brett Arends, marketwtach.com - 08/25/2021 Description

  How much financial damage has the Covid crisis done to Social Security? We may be about to find out. The 2021 annual report from the Social Security trust fund administration is expected to drop within weeks, possibly days, my sources say. This will be the first official status report on the fund’s finances since COVID-19 swept across America last year. This year’s report is already about four months late. The report will be critical. One of the country’s leading experts is warning that ‎the Social Security trust fund could run out of money as soon as 2029, five years ahead of official projections, because of the fallout from the Covid crisis. That’s the warning from Olivia Mitchell, a professor at the University of Pennsylvania’s Wharton School of Business and director of their Pension Research Council.

  “It seems that the date of insolvency of SS has crept sooner — perhaps as early as 2029,” Mitchell says in a new Wharton podcast. She adds: “So that’s in eight years. And that’s partly a function of a lot of people having lost their jobs, so they’re not paying in [to] Social Security. Some people have retired early, so they’re claiming earlier and therefore drawing down.” The last official projection from the trustees said the system would be OK until 2034. But that prediction was made early last year. It is hopelessly out of date. ‎ “This year the trustees are very late,” says Mitchell. “They have not issued their report, and it’s August. They’re supposed to put it out in March or April. So nobody really knows what the numbers are going to be.”

  The independent Congressional Budget Office has already brought forward its expected date of insolvency to 2032. Almost all of us will be relying on Social Security to varying degrees in our senior years. Some 180 million Americans are members of our national pension plan, which was set up by Franklin Roosevelt during the Depression and has been the mainstay of American retirement ever since.

• How Could Leftists Change Chile’s Pension System?, FINANCIAL SERVICES ADVISOR - 06/06/2021
• Why pandemic forced baby boomers to rethink retirement plans, The Christian Science Monitor - 06/01/2021
• Investment & Wealth Institute - 04/28/2021
• Slow U.S. population growth stiffens economic headwinds, Market Place - 04/27/2021
• CalPERS ahead of earnings goal with absence at top. When will investment chief vacancy hurt?, The Fresno Bee - 04/19/2021
• Olivia Mitchell on Wharton Business Daily - 04/12/2021
• Wharton’s Olivia S. Mitchell on financial well-being, Penn Today - 04/06/2021
• Social Impact Faculty Spotlight: Professor Olivia S. Mitchell and Financial Well-Being, Wharton Social Impact Initiative - 03/31/2021
• The most financially fragile Americans during COVID-19 have difficulty answering these 15 money questions — can you?, Report Door - 12/14/2020
• Calibrating Retirement Planning with Current Condition, Retirement Management Journal - 11/30/2020
• Stimulus Spending, and Lots of It, Is the Only Way for Next President to Fix the Ailing Economy, Experts Say, Newsweek - 10/19/2020
• Why low interest rates hurt retirees, PennToday - 10/14/2020
• 1 in 4 Americans say they have to delay retirement because of COVID-19, Business Insider - 10/07/2020
• Is Peru’s Congress About to Break the Pension System?, Financial Services Advisor - 10/07/2020
• How to Think Long Term With Near-Zero Interest Rates, Wall Street Street - 09/19/2020
• Consumer Behavior in Financial Markets 2020, Aug 24-26, YouTube - 09/16/2020
• How much do you know about retirement planning? Take this quiz and find out, CNBC - 09/01/2020
• Consumer Behavior in Financial Markets 2020 Olivia Mitchell, Wharton “Building Better Retirement Systems in the Wake of the Global Pandemic”, Swedish House of Finance - 08/26/2020
• Wharton on SiriusXM, Wharton on Business Daily - 07/29/2020
• Is Employer-Sponsorship of Plans Suboptimal?, Retirement Income Journal - 06/10/2020
• Should You Tap Retirement Funds in a Crisis? Increasingly, People Say Yes., Wall Street Journal - 06/04/2020
• Should Chile’s Pension System Be Nationalized?, The Dialogue.org - 06/03/2020
• 5 Ideas from a Retirement Expert’s New Paper, for Annuity Sellers, ThinkAdvisor - 06/02/2020
• Negative Interest Rates Turn Saving, Borrowing Upside Down, US News - 06/02/2020
• COVID-19 Has Made the Retirement System Weaker, Plansponsor - 06/02/2020
• Retiring to a sunny foreign vacation spot was the American dream. Now the coronavirus is forcing some expats to come back., The Washington Post - 05/26/2020
• Financial Knowledge Can Limit Debt Exposure at Older Ages and Improve Retirement Planning, The Street - 05/09/2020
• Short-Staffed EPA Leans on Older Adjunct Workers, With No Raises, Bloomberg Law - 05/07/2020
• How the Pandemic Is Making the Retirement Crisis Worse — and What to Do About It, nextavenue - 04/30/2020
• Think Twice About Using Your Retirement Savings Right Now, Savings Advice - 04/13/2020
• Olivia Mitchell on Wharton Business Daily, Wharton on SiriusXM - 04/05/2020
• Retirement Behaviorist, Finance and Developement - 03/31/2020
• Pure target-date fund investors see significantly more gains, Pensions & Investments - 03/27/2020
• Americans will soon be able to take penalty-free withdrawals from their 401(k)s, but experts say think twice about using retirement savings, CNBC - 03/26/2020
• TikTok’s newest viral influencers? Personal finance stars, Fortune - 03/21/2020
• Best Investment Apps for 2020, Credit Donkey - 02/21/2020
• Bridging the gap in financial literacy, The Business Times - 02/19/2020
• A Rothified Retirement?, Wall Street Journal - 02/18/2020
• Opinion: This one change can improve your retirement wealth by 50%, MSN Money - 02/12/2020
• Trump budget could lead federal workers to put less money in Thrift Savings Plan, InvestmentNews - 02/12/2020
• Target-date funds a game changer for plan member outcomes: research, Canadian Investment Review - 02/12/2020
• Are people retiring earlier or later? Both are true — and it says a lot about the youngest generations entering and defining the workforce, Business Insider - 01/21/2020
• THE END OF RETIREMENT, Wall Street Journal - 01/10/2020
• OPINION: Financial literacy apps are more important than you might think, Personal Finance - 01/07/2020
• Negative interest rates turn saving, borrowing upside down, AP News - 01/01/2020
• SECURE Act, signed by President, a game-changer for retirement plans, The Philadelphia Inquirer - 12/31/2019
• 401(k) Early Withdrawals Will Be Easier: Be Careful!, next avenue - 10/17/2019
• FINRA honors Wharton’s Olivia Mitchell with Ketchum Prize, Pensions & Investments - 10/14/2019
• More Troubles For GE As 20,000 Pensions Are Frozen, WAMC - 10/08/2019
• GE Will Freeze 20,000 Worker Pensions In Effort To Cut Deficit By $8 Billion, wbur - 10/07/2019
• Do recessions and stock market drops go hand-in-hand? Surprisingly, not always., The Philadelphia Inquirer - 09/16/2019
• The Problem With Bonds in a Retirement Portfolio, Wall Street Journal - 09/10/2019
• Association created for global study of pensions, Pension&Investments - 08/05/2019
• Auto-Enrollment Retirement Plans for the People: Choices and Outcomes in OregonSaves, National Press Club - 08/02/2019
• Researchers Propose Including Annuities as a Default in 401(k)s, Plan Sponsor - 07/24/2019
• More sponsors cut a break on 401(k) loan repayment, Pensions&Investments - 07/22/2019
• Why Don’t People Buy More Annuities?, BBN Times - 07/18/2019
• Why Don’t People Buy More Annuities?, Conversable Economist - 07/15/2019
• Congress’ new SECURE Act bill is the most significant retirement plan legislation in years, The Philadelphia Inquirer - 07/07/2019
• Deferred Annuities as 401k Plan Default?, 401k Specialist - 06/27/2019
• Multiemployer pension bailout plan is fatally flawed, The Hill - 06/27/2019
• Automatic enrollment in 401(k) annuities: Boosting retiree lifetime income, Brookings - 06/25/2019
• 5 Social Security Myths, Savvymoney - 06/10/2019
• 16 Powerhouse Female Economists, Worth - 05/30/2019
• How Debt Affects Retirement, Retirement Income Journal - 05/10/2019
• CALIFORNIA SUPREME COURT UPHOLDS PENSION REFORMS, BUT PROBLEMS REMAIN, The Heartland Institute - 05/08/2019
• Thaler pushing retirement income idea, Pensions & Investments - 04/29/2019
• Aging Populations Force Lawmakers to Rethink Pension Systems, The Dialogue - 04/16/2019
• Lump-sum pension payments: Who are the winners and losers?, Penn Today - 04/16/2019
• 5 steps to take now to make your house work for you in retirement, Bank Rate - 04/11/2019
• Being financially literate can help you save more, retire better, Today - 04/06/2019
• 5 New Things Finance Professors Are Saying About Your Prospects, Think Advisor - 04/05/2019
• Re-evaluating the retirement option, The Eagle-Tribune - 03/30/2019
• Why saving—and spending—money gets trickier for retirees, The Market Watch - 03/21/2019
• Use Social Security to Pay for Parental Leave? That’s a ‘Terrible Idea,’ Experts Say, Barron's - 03/16/2019
• Survey of Older Americans Finds Many are Lacking in Understanding Needed for Key Financial Decisions, NBER.org - 02/14/2019
• 6 Ways Retirement Has Changed Over the Past 25 Years, https://www.kiplinger.com/slideshow/retirement/T037-S004-6-ways-retirement-has-changed-over-past-25-years/index.html - 02/04/2019
• Kick the Tires on Car Insurance to Understand What You Get, Wall Street Journal - 01/27/2019
• Vanguard founder John C. Bogle remembered as retirement-industry icon, Pensions&Investments - 01/16/2019
• 10 ways to deal with debt while in retirement, USA Today - 01/12/2019
• What would you do with an extra $88 in Austin?, USA Today - 12/07/2018
• The $210 Billion Risk in Your 401(k), Wall Street Journal - 10/10/2018
• Emerging-Market Tremors Rattle Tennessee’s Public Pensions, Wall Street Journal - 09/08/2018
• Scammers are targeting retirement savings. Here’s how to fight them, Market Place - 08/14/2018
• Evaluating Lump Sum Incentives for Delayed Social Security Claiming, Oxford Academic - 08/10/2018
• In need of a win, Congress proposes expanded retirement accounts before mid-terms, The Inquirer - 07/20/2018
• The hard economics of the High Court’s Janus decision, The Washington Times - 07/10/2018
• Fintech is Coming to Retirement Planning — But You Still Need a Good Ol’ Budget, TheStreet - 06/04/2018
• How Technology Is Disrupting Retirement Planning, The Street - 05/31/2018
• A handful of new tech companies are hoping to bring new people into the stock market, Marketplace - 05/29/2018
• The World Isn’t Prepared for Retirement, Bloomberg - 05/29/2018
• Spoilt Rotten: Are There Too Many Mutual Funds & ETFs?, Forbes - 05/16/2018
• Elder Financial Fraud Is Worse Than We Thought. Here’s What We Can Do About It., Wall Street Journal - 05/09/2018
• Americans Should Be More Financially Literate. But What Does That Mean?, Wall Street Journal - 05/06/2018
• Pension problems help drive US protests for teacher raises, Associated Press - 05/01/2018
• Pre-Retirees – Underfunded And Overleveraged: Financial Advisors’ Daily Digest, Seeking Alpha - 04/24/2018
• Will More Baby Boomers Delay Retirement?, PRB - 04/23/2018
• Older Consumers Carry More Debt, Risk, UCN - 03/08/2018
• Startup offers annuities online on a subscription plan, Investment News - 03/01/2018
• Researchers: Persistent Low Interest Rates Weigh on 401(k) Savings, NAPa - 02/26/2018
• What Makes 401(k) Loans Risky?, Nasdaq - 02/18/2018
• How people without patience set themselves up for pain, Wealth Professional - 02/16/2018
• 4 Ways Persistent Low Returns Affect Retirement Behavior: NBER, Think Advisor - 02/14/2018
• Why Making Big Decisions as We Get Older Is So Risky, Wall Street Journal - 02/08/2018
• Retirement info for women: Our favorite classes, clubs and blogs, The Inquirer - 02/01/2018
• Research on financial literacy can win award, Pensions & Investments - 01/22/2018
• Need A 401(k) Loan? It Just Got Less Dangerous, Forbes - 01/16/2018
• Column: For U.S. retirees, rising interest rates a double-edged sword, Reuters - 01/04/2018
• Why Private Pensions Are Becoming a Thing of the Past, wNYC - 12/28/2017
• Wharton prof: boomers enter retirement with more debt than ever and what to do about it, The Inquirer - 12/28/2017
• Why debt can be so dangerous in retirement, MarketWatch - 12/15/2017
• Fees Rise for Underfunded Pensions, Bloomberg Businessweek - 12/14/2017
• Philadelphia Parking Authority honcho Richard Dickson set to snag record $655K retirement perk, The Inquirer - 12/10/2017
• Three in 10 local households have no retirement savings, records show, The Intelligencer - 11/12/2017
• Indebtedness of Americans Nearing Retirement Has Risen Sharply, Increasing Risk of Bankruptcies, NBER - 11/09/2017
• Slashing 401(k) limits to fund budget is like ‘robbing Peter to pay Paul’, Yahoo! Finance - 10/27/2017
• The new retirement, The Andover Townsman - 10/26/2017
• Have you checked your employer’s pension fund lately?, Crain's Chicago Buisness - 09/29/2017
• When Warren Buffett Runs Your Pension Plan, Bloomberg Businessweek - 09/28/2017
• Why Higher Interest Rates Are Going to Really Hurt Today’s Elderly, Wall Street Journal - 09/24/2017
• Philly City Hall sits on pension deal info, Philly.com - 09/21/2017
• City’s pension ‘reform’ hits taxpayers, consumers, Philly.com - 09/11/2017
• Are Multiemployer Plans In Trouble Or Not?, 401k Specialist - 08/22/2017
• Financial Literacy For The Young And Young At Heart, Asian Scientist - 08/16/2017
• Here’s the real reason women get smarter about money as they get older, CNBC - 08/14/2017
• 70 percent of Americans can’t answer these 3 basic money questions, CNBC - 08/11/2017
• Self-made millionaire Grant Cardone: This is why ‘men will almost always win the money game’, CNBC - 08/08/2017
• PUTTING THE PENSION BACK IN 401(K) RETIREMENT PLANS: OPTIMAL VERSUS DEFAULT LONGEVITY INCOME ANNUITIES, Penn Wharton Budget Model - 08/03/2017
• Everything You Always Wanted to Know About Money (But Were Afraid to Ask), Freakonomics - 08/02/2017
• Widows, divorcees face financial wake-up call when spouses are gone, Philly.com - 07/21/2017
• Research Finds Benefit of Offering Longevity Annuities in DC Plans, Planadviser - 07/17/2017
• Make Your Retirement Money Last For Life, Forbes - 07/17/2017
• Keeping it simple is key lesson for encouraging retirement savings, experts say, Pensions & Investments - 07/10/2017
• Most school districts raising taxes, reducing staff to meet rising costs, Oberver Reporter - 06/26/2017
• Q&A: Olivia S. Mitchell,, UBS Knowledge Network - 06/21/2017
• The $31 Billion Hole in GE’s Balance Sheet That Keeps Growing, Bloomberg - 06/16/2017
• Pennsylvania takes new step on troubled public pension plans, AP - 06/12/2017
• Redefining retirement, Zurich - 05/31/2017
• Honorary Doctorate for Prof. Olivia S. Mitchell, Ph.D., Goethe Universitat - 05/25/2017
• Olivia Mitchell Named 2016 EBRI Lillywhite Award Winner, ebri.org - 05/15/2017
• The pension-style retirement product you should know about, Fidelity Investments - 05/13/2017
• Who Says You Need Tax Breaks for Retirement Saving?, Bloomberg Businessweek - 05/11/2017
• Wharton’s Olivia Mitchell hosts a retirement conference and — surprise! — the research is ‘depressing’, philly.com - 05/05/2017
• Individual retirement accounts aren’t attracting enough of the right individuals, Marketplace - 05/02/2017
• How Financial Knowledge Drives Wealth Inequality, Wall Street Journal - 04/09/2017
• 3 Reasons Why the Gender Pay Gap Still Exists, Fortune - 04/03/2017
• The Rising Retirement Perils of 401(k) ‘Leakage’, Wall Street Journal - 04/02/2017
• This Is Not Your Father’s 401K: The Retirement Product You Should Know About, credit.com - 03/29/2017
• Most people flunked this retirement quiz. Can you pass?, CNBC - 03/10/2017
• Longer Lives, New Opportunities, SSGA.com - 03/08/2017
• Putting Philadelphia’s $149 million pension fund loss into context, Planphilly - 03/02/2017
• When 6.9% Isn’t Enough, Chief Investment Officer - 02/28/2017
• CalSTRS Lowers Return Expectations and Revises Actuarial Expectations, Chief Investment Officer - 02/06/2017
• How Much Cash Would It Take to Get You to Delay Retirement?, Think Advisor - 12/30/2016
• Growing number of Americans are retiring outside the US, The Big Story - 12/27/2016
• Thinking about retiring to a place overseas?, Kalb - 12/27/2016
• How Much Cash Would It Take to Get You to Delay Retirement?, Bloomberg - 12/20/2016
• Report finds wealth gap continues into retirement, WVTF Public Radio - 12/19/2016
• Making longer lives better: Living long and prospering, ebn Adviser - 11/29/2016
• Insights on Pension, Advisers, Wall Street Journal - 11/07/2016
• The Key To Better 401k Participant Outcomes: Olivia Mitchell, 401k Specialist - 10/24/2016
• How to Put the Pension Back into Retirement Plans, Wall Street Journal - 10/23/2016
• THE NEW RETIREMENT, MyInforms.com - 10/23/2016
• Penn meeting focuses on how to get more people to save for retirement, Philly.com - 10/20/2016
• Should the Social Security Retirement Age Be 76?, Next Avenue - 10/18/2016
• Financial Literacy Is Still Abysmal Everywhere, Wall Street Journal - 10/12/2016
• An Analysis of Options to Increase Retirement Security for New York City Private Sector Workers, NYC Retirement Security Study Group - 10/12/2016
• of CRAINS 100 Innovators, Disruptors and Change-makers in Business!, CRAIN 2016 - 10/05/2016
• Nearly 7 million Californians will be automatically enrolled in state-run retirement savings plan under new law, LA Times - 09/29/2016
• Photographer: Getty Images Why More Women Than Ever Are Putting Off Retirement, Bloomberg - 09/14/2016
• Why Boomer Women Are Worse Off Financially Than Their Predecessors, Wall Street Journal - 09/11/2016
• Older Adults Place Less Value on Saving, AAII - 09/01/2016
• Women In Their 50s More Financially Fragile Than Generation Ago Say Researchers, Linkedin - 09/01/2016
• Patience Is the Secret to Wealth and Health, Economists Suggest in a New Study, Wall Street Journal - 08/01/2016
• En entredicho, sistema de administradoras de fondos, Eleconomista - 07/27/2016
• 5 Tips to Help Women Work Longer, Next Avenue - 06/30/2016
• 401(k) Investment Options: Less is More, Squared Away Blog - 06/30/2016
• Financial Knowledge Leads to Better Retirement Savings Behavior, Plansponsor - 06/27/2016
• RETIREMENT SECURITY IN PHILADELPHIA: An Analysis of Current Conditions and Paths to Better Outcomes, Philadelphia Comptroller - 05/31/2016
• Pemex’s Pension Problem: Why the Oil Giant Is on Slippery Ground, Knowledge@Wharton - 05/27/2016
• Here’s How to Help More Americans Boost Their Social Security Benefits, Time - 05/19/2016
• DISCUSSION: Here’s How to Get More People to Delay Claiming Social Security, The Financial Exchange - 05/10/2016
• Here’s How to Get More People to Delay Claiming Social Security, Wall Street Journal - 05/09/2016
• A new idea for solving Social Security’s money troubles, Philly.com - 05/09/2016
• The US public pensions crisis ‘is really hard to fix’, Financial Times - 05/01/2016
• Opinion: Why a lump-sum payment should be part of Social Security, Market Watch - 04/11/2016
• Variable Annuities, Lifetime Income Guarantees, and Investment Downside Protection, Trends and Issues - 03/31/2016
• California debates a retirement savings fix, Market Place - 03/30/2016
• How to Get People to Delay Retirement, Wall Street Journal - 03/20/2016
• Investment over the Life Cycle: Inertia and Financial Advice, House of Finance - 03/01/2016
• Geldanlage: Verstehen Sie Sparen?, Spiegel Online - 02/23/2016
• Who’ll Pay for Americans to Live to 100?, Next Avenue - 02/08/2016
• Are Too Many Choices Costing 401(k) Holders?, Wall Street Journal - 02/07/2016
• Streamlining the Plan Menu, Plansponsor - 02/01/2016
• 2016’s best and worst states to retire, WalletHub - 01/25/2016
• Few ways to improve your odds for record $700 million Powerball, The Press Democrat - 01/07/2016
• Streamlined DC Investment Menu Could Save Participants Millions, Plansponsor - 12/30/2015
• To Delay Social Security Claiming, Offer Lump Sum Benefit: Report, ThinkAdvisor - 12/10/2015
• Target Date Funds: Top 3 for Each Retirement Period, Yahoo! Finance - 11/25/2015
• Obama’s MyRA Retirement Savings Plan Goes Nationwide, Bloomberg Business - 11/04/2015
• What the U.S. can learn from Chile’s retirement system, Fortune - 10/29/2015
• Retirement Living: Debt holds many Boomers back, USA Today - 10/21/2015
• Loan is not a four-letter word, Vanguard Blog for Institutional Investors - 10/07/2015
• Yes, Chilean Personal Retirement Accounts Work, Investors.com - 10/05/2015
• Baby Boomer Women and the Burden of Debt, Wall Street Journal - 10/01/2015
• Pension advances draw scrutiny, Market Place - 09/29/2015
• What really happens when pensions disappear, CNBC - 07/24/2015
• 10 top women in economics, Agenda - 07/23/2015
• Choice a Detriment to Public Worker Retirement Savings, Plansponsor - 07/20/2015
• Financial Literacy Among CEOs and CFOs on LinkedIn, Plansponsor - 07/13/2015
• Leakage from 401(k) loans, defaults is greater than thought, benefitspro - 07/01/2015
• GFOR: Adding annuities to DC plans still open to debate, Pensions & Investments - 06/25/2015
• Why people don’t buy long-term-care insurance, MarketWatch - 06/25/2015
• With long-term care coverage so costly, what do the pros do?, Philly.com - 06/22/2015
• Why People Don’t Buy Long-Term-Care Insurance, Wall Street Journal - 06/14/2015
• Powell: How to fix America’s retirement problems, USA Today - 05/21/2015
• When one partner makes more than the other, CNN Money - 04/20/2015
• Sponsors’ Approach to Loans Affects Retirement Plan Leakage, Plansponsor - 04/20/2015
• New Proposed Rules for Retirement Investments, Market Place - 04/15/2015
• One Economics Book We All Should Read, Wall Street Journal - 04/15/2015
• The Biggest Hit to Your Retirement Savings: Living Too Long, NY Times - 04/03/2015
• Retirement plans adding annuities, Consumers Digest - 03/31/2015
• A Three-Question Test of Financial Literacy, Wall Street Journal - 03/25/2015
• Higher financial literacy would benefit everyone, Philly.com - 03/16/2015
• NYC comptroller announces group to study retirement plan for private-sector employees, Pensions & Investments - 02/27/2015
• Delay Social Security, get a bonus?, Bankrate - 02/11/2015
• A Retirement Age of 100? It’s Coming, Wall Street Journal - 02/09/2015
• The Timing of Pension Payouts and Social Security Claiming, NBER - 02/06/2015
• Late Retirement Bonus: How the Government can Incentivize Working Longer, Chicago Policy Review - 01/30/2015
• Fiduciary Re-Proposal, Fee Disclosures On Deck for 2015; MEPs Wait in the Wings, Bloomberg BNA - 01/16/2015
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• Olivia Mitchell: Saving Social Security, With Lessons From Down Under, Advisor One - 01/11/2013
• Why Boeing’s fighting to retire pensions, Business Journal - 01/11/2013
• Medicare Gaps Leave Many With Big Bill at End of Life, Study Finds, HealthDay - 09/14/2012
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• Poll: Boomers anxiety about retirement grows, MercuryNews.com - 11/10/2011
• Editorial, 11/2: Good for grandma, but worries mount, JournalStar - 11/01/2011
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• RIIA names winners of the 2011 Excellence in Communications awards, Investment News - 10/03/2011
• Olivia Mitchell comenta por qué los consumidores jóvenes deberían limitar el gasto, YouTube - 09/19/2011
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• Optimal Portfolio Choice over the Life Cycle with Flexible Work, Endogenous Retirement, and Lifetime Payouts, Oxford Journal - 08/26/2011
• Ed Schultz says Social Security lifts more than a million Floridians out of poverty, PolitFact.com - 08/25/2011
• How Gender and Personality Count in the Age of Who-Pays-Wins Retirement, Knowledge@Australian School of Business - 08/16/2011
• Baby boomers fret about the rising cost of aging, Philly.com - 07/31/2011
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• Financial Engines and the Pension Research Council Host Second Annual Retirement Income Summit, Traders Huddled - 06/21/2011
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• Make Social Security Fairer to Workers – Morning Consult, Morning Consult - 01/01/1970 Description

  It’s well-documented that Social Security faces a massive financing shortfall that threatens its solvency unless lawmakers swiftly enact corrections. However, this isn’t the only reason to reform Social Security. The program doesn’t treat work or workers fairly, and this needs to change.

  By the time workers reach late middle age, each dollar of payroll taxes they contribute delivers on average only 2.5 cents in additional benefits. The reasons for this mistreatment are various, but are rooted in the fact that lawmakers have never adequately considered Social Security’s effects on work.

  The 1935 Committee on Economic Security that advised President Franklin Roosevelt on Social Security’s design took it for granted, amid the Great Depression, that workers “past middle life” had “uncertain prospects of ever again returning to steady employment.” In the 1970s, lawmakers enacted automatic annual benefit increases that cannot be sustained unless workers’ tax burdens rise dramatically. Workers now beginning their careers are projected to be made poorer by Social Security, on average, by an amount exceeding 3 percent of their lifetime earnings.

  The damage wrought by Social Security’s work disincentives is enormous. Healthy, productive workers are induced to drop out of the workforce, right at a moment in life when they are typically deciding whether to retire or continue working. Evidence shows that workers respond to these incentives by quitting work when their marginal Social Security tax rate is high.

  Even before the pandemic, we faced an enormous labor participation challenge, with the baby boomer generation retiring in droves to spend more of their lives drawing government benefits than any previous generation. But especially now, when America lacks enough willing workers to fill employers’ needs, the last thing we need is for our largest domestic program to make the problem worse.

  One problem is the archaic design of Social Security benefits. The benefit formula, reflecting bygone data limitations, is based on a worker’s average earnings in their highest 35 years (adjusted for national wage growth). The problem with this is obvious: As soon as a worker works for 35 years, he or she no longer accrues benefits at the same rate, because each subsequent year of earnings only counts toward benefits to the extent that it exceeds a previous year’s earnings.

  Far better would be for workers to accrue Social Security benefits each year they work, just as workers in private pensions do. This requires changing the formula so that it operates separately on each year of earnings rather than on a career average. A side benefit of this reform is that it would actually save the system money, mostly by constraining benefit growth for sporadic high-income workers (to whom the current formula pays windfalls because it mistakes them for low-income workers).

  We should also reform Social Security’s early retirement penalties and delayed retirement credits. The current system rightly adjusts monthly benefits for one’s age of claim — reducing benefits for those who claim early and draw for more years, while increasing benefits for those who delay retirement. The problem is that these adjustments are weak. Wharton economics professor Olivia Mitchell has found that offering the delayed retirement credit in a lump sum option (typically in the tens of thousands of dollars) could be a more powerful inducement to delay retirement than the current method of adjusting monthly benefits by a few percentage points. Current early/delayed retirement adjustments also don’t consider that those who keep working also continue to pay payroll taxes. To properly take workers’ taxes into account, early retirement penalties and delayed retirement credits need to be made larger than they now are.

  Of course, there is no avoiding the most politically difficult issues, including Social Security’s outdated eligibility ages. There is only so much that other adjustments can accomplish, so long as eligibility ages remain badly out of sync with demographic realities.

  The most common age of benefit claim today is 62. As long as healthy workers continue to claim benefits so early, program costs will be inflated, and workers’ tax burdens will be needlessly compounded. It bears noting that the current earliest eligibility age of 62 could be raised by three years, and still allow 21st-century workers to claim Social Security benefits at a younger age than those of the generation that fought the Spanish-American War of 1898. Then, too, initial benefit levels are currently indexed to grow faster than workers’ after-tax earnings. Until this cost growth is moderated, American workers’ standards of living will continue to fall behind.

  While specific reforms should be thoroughly debated, we would all benefit from a general shift in Social Security’s posture toward work. To serve 21st-century needs, Social Security must be converted from a program that penalizes work to a program that rewards it.

Knowledge at Wharton

• How Prepared Are Americans for Retirement?, Knowledge at Wharton - 5/24/2022
• How Far Could Pension Funds Drive Sustainable Investing?, Knowledge at Wharton - 5/25/2021
• Post-pandemic Retirement: Can We Build More Resilient Systems?, Knowledge at Wharton - 7/14/2020
• Living to 100: How Will We Afford Longer Lives?, Knowledge at Wharton - 5/19/2020
• When — and How — Should the U.S. Economy Reopen?, Knowledge at Wharton - 5/12/2020
• Why the U.S. Economic Downturn Could Hurt Women More, Knowledge at Wharton - 4/21/2020
• Living Longer, Saving Less: What it Will Mean for Retirement, Knowledge at Wharton - 7/22/2019
• Paid Family Leave: What’s the Right Model?, Knowledge at Wharton - 4/12/2019
• Creating a Pension to Fit the Needs of the Rural Poor, Knowledge at Wharton - 2/24/2017
• The Case for Phased Retirement, Knowledge at Wharton - 11/1/2016

Wharton Stories

• Social Impact Faculty Spotlight: Professor Olivia S. Mitchell and Financial Well-Being, Wharton Stories - 03/30/2021
• 8 Wharton Faculty to Follow on LinkedIn, Wharton Stories - 12/15/2017