Monthly Archives for February 2016

Candidates Mum on Social Security

Published in Pawtucket Times on February 8, 2016

Just a week before the New Hampshire primary, scheduled for Tuesday, February 9, AARP releases a new survey, of likely primary voters, that finds Social Security is “one issue that transcends the partisan divide and unites people of all ages.” Both surveyed Democrats and Republicans alike agreed that all presidential candidates should give details as to how they will strengthen or expand Social Security.

In recent presidential debates, moderators focus on the economy, abortion, gun control, immigration and defense, hardly touching on aging issues. The January 29 AARP survey found that voters want more specifics about Social Security. More than nine in 10 New Hampshire primary voters across party lines and age groups say it is important for presidential candidates to lay out their specific plans to make Social Security financially sound for future generations.

Presidential Candidates Dodging Social Security Issue

“New Hampshire primary voters are sending a clear message to the presidential candidates that having a plan to keep Social Security strong is a test of leadership,” said AARP New Hampshire State Director Todd Fahey. “Yet, some presidential candidates are dodging the issue. Our survey confirms New Hampshire primary voters agree if a candidate thinks they’re ready to be president, they should at least be able to tell voters where they stand on Social Security’s future.”

According to AARP, the recent survey of 1,004 likely New Hampshire primary voters, was conducted by telephone from January 12 through January 16, 2016. By design, half of the respondents consist of likely Democratic primary voters (501) and half consist of likely Republican primary voters (503).

The AARP survey is part of nonprofit’s 2016 presidential election issue campaign, “Take A Stand.” In November, the nonprofit launched its its 2016 election accountability campaign initiative which demands on behalf of America’s voters that presidential candidates detail their specific positions on making Social Security financially sound.
The survey findings indicate that nine in 10 New Hampshire primary voters (93 percent Democrat and 92 percent Republican) across party lines and age groups say its important for presidential candidates to lay out a detailed plan to make Social Security financially sound for future generations. Regardless of age, nearly half or more of likely primary voters in each party think this is “very important.”

Also, more than three in four New Hampshire primary voters, across party lines and across age groups, agree that having a plan for Social Security is a basic threshold for presidential leadership. This includes 89 percent of likely Democratic primary voters and 80 percent of likely Republican primary voters.

Moreover, nearly nine in ten or more voters across both parties and age groups believe it is important that the next president and congress take action to make Social Security financially sound. This includes 96 percent of Democratic primary voters as well as 92 percent of Republican primary voters.

“If our leaders don’t act, future generations could see their Social Security benefits cut by 25 percent. That’s a $4,000 to $10,000 per year benefit cut! This survey confirms how critical it is for the next president to have a plan to update Social Security and a commitment to act on that plan,” said Fahey.

On the question of which presidential candidate they expect to vote for on February 9, the AARP survey found that among likely Republican primary voters, Donald Trump is the leading choice for president (preferred by 32 percent) with Marco Rubio preferred by 14 percent and John Kasich preferred by 13 percent However, more than one in four (26 percent) are less certain who will get their vote.

Among likely Democratic primary voters, Bernie Sanders is the leading choice for president (preferred by 59 percent), with Hillary Clinton coming in second (preferred by 33 percent. But one in five (21 percent are less certain who will get their vote.

“AARP said early on in the election cycle that Social Security is too critical a matter – and one affecting far too many people – to allow it to be skimmed over, breezed by, or paid only lip service,” said AARP Rhode Island State Director Kathleen Connell. “The presidential candidates need to take a stand on how they would update Social Security to keep it financially strong and adequate for future generations,” she says.

“Unfortunately, Social Security does not seem to be top-of-mind for candidates nor a discussion that finds its way into the debates,” says Connell, observing that some candidates, including some frontrunners, remain silent on the Social Security issue.
(You can get the very latest news and read what candidates with plans did say at http://www.2016takeastand.org.)

Connell says, “The challenge itself – keeping Social Security strong for the future – gets talked about a lot. You can be sure that when a candidate or elected federal official visits a senior center there will be a pledge (one I happen to believe has been sincere in Rhode Island) to protect Social Security.”

“You don’t hear so much about how. The devil is in the details. And, as the saying goes, ‘It’s complicated,’” adds Connell.

Older Voters Have Political Clout

From inside the Beltway, Darrell M. West, Ph.D., Vice President and Director of Governance Studies at the Brookings Institution, considers voters age 50 and over are one of the most important voting blocs in the nation. “It is a numerous group and these people vote in higher percentages than those who are younger. They often are decisive in elections and candidates have to take their views seriously,” says West.

Connell agrees about the clout of older voters. “The average age for a Rhode Island voter in the 2012 presidential election was 48.6, and that was up from 48.5 in 2010. We know that older Rhode Islanders vote in high percentages and we know that the 50+ population is grown as people live longer. But I have to say that when it comes to Social Security, voters 50 and older are united on the issue; they expect some form of accountability from the candidates on how they would lead on this issue, she says.

Anyone who thinks they’re ready to be President of the United States should be able to tell voters how they’ll keep Social Security strong,” adds Connell. “If our leaders don’t act, future retirees could lose up to $10,000 a year. Every year our leaders wait and do nothing, finding a solution grows more difficult,” she says.

Aging issues impact everyone, says Connell. “When I am asked about ‘aging issues it seems to me to indicate how people often default to a narrow view of ageing. Access to and the cost of healthcare is an issue for all ages. Taxation is an issue for all ages. Affordable housing is an issue for all ages. Protecting pensions is an issue for all ages, even for voters working in their 30s or 40s – as is the issue of Social Security. Our aging population presents a challenge to all Americans and I think you will see 50+ voters becoming increasingly liked-minded making more and more of an effort to be heard.”

Retirement Survey Bleak for Ocean State

Published in Pawtucket Times on February 1, 2016

Here we go again. This month, America’s tiniest state gets outed as being the most unfavorable state to live out your retirement years. According to a new WalletHub study, “2016’s Best & Worse States to Retire,” when compared to all 50 U.S. states and the District of Columbia, Rhode Island came in dead last when compared against 24 metrics falling in one of these three categories (Affordability, Quality of Life and Health Care).

WalletHub, an internet site that calls itself “a personal finance Web site, taps Florida as being the top state to live your retirement years, followed by Wyoming, South Dakota, South Carolina and Colorado. The in-depth analysis, geared to identifying the most retirement-friendly states, gives the Ocean States the distinct of being the worst place to live in your later years, followed by the District of Columbia, Hawaii, Connecticut and Vermont.

As to affordability, WalletHub looked at the adjusted cost of living, tax friendliness of a state, it’s taxation on pensions and Social Security income, and annual cost of in-home services. Rhode Island was ranked 51 (the worst) in affordability for retirees. In zeroing in on this specific variable, the state came in 41st in adjusted cost of living; 45th in annual cost of in-home services and 48th in taxpayer rankings.

For a state’s quality of life, WallettHub zeroed in on an array of variables including the number of theatres, museums, music venues, golf courses. The researchers also checked out crime rates, weather, the number people age 65 and older and whether the state’s labor is elderly friendly. A sampling of Rhode Island specific rankings for this variable include a ranking of 35th for Museums per Capita; 42nd for Theaters per Capita; and 48th for the number of golf courses per Capita; and 32nd in having employed residents age 65 and over.

As for health care, the study examined the number of family physicians, dentists, nurses, and health-care facilities per 100,000 residents, the ranking of the state’s public hospitals, the resident’s life expectancy and emotional health, even taking a look at the death rate for people age 65 and older. Rhode Island ranks 49th in number of family physicians per 100,000 Residents.

WallettHub analyst, Jill Gonzalez, says that for Rhode Island to become a mecca for retirees, state lawmakers must reconsider how they tax Social Security and pensions. The state’s current tax policy “is not at “all friendly toward retirees,” she adds.

According to Gonzalez, the state’s cost of living index is also high at 122 while the national index is 100. This means that if the cost of goods and services nationwide is $100, the Rhode Island retirees will pay $122. Annual costs to pay for home care are nearly $54,000 per year in Rhode Island and state policy makers must find a way to reduce this key community-based service.
Statewide Reactions to Web site Survey

These surveys aggregate data that does not encourage retirement here,” observes AARP Rhode Island State Director Kathleen Connell. “They do not fully measure quality of life or how the proximity to Boston and New York City make Rhode Island attractive to many retirees. But you often hear people talk about retiring in states where lower taxes and deflated housings prices suggest that retirement income will go dramatically farther.

“The tax issue is a reality driven by the state’s so-called ‘structural deficits’ that have resulted in cities and towns raising property and excise taxes. Meanwhile, hikes in fees and new surcharges have added to the tax burden. Legislative leaders face a great challenge in reversing this trend.

“Many people in their 40s and 50s who want to retire in Rhode Island can save more wisely for retirement and find a way to make it work. Anyone entering retirement now with little savings and expecting to rely primarily on Social Security is faced with difficult decisions.

“So, clearly the survey means different things to different people. Few would disagree that Rhode Island is a great place to retire – maybe one of the best places in the nation. If you can afford it.”

Edward Mazze, Distinguished University Professor of Business Administration, says, “I cannot disagree with the quantitative findings in the study. Behind the numbers are two critical factors that have an impact on retiring in Rhode Island – first, the Rhode Island economy has barely grown in the last eight years – second, the negative reputation of the state with government leaders going to jail, high property taxes, poor school systems and unfunded public pension and health programs.”

Mazze calls on the Rhode Island General Assembly to raise the state estate tax level to the same level as the federal estate tax level and exempt social security benefits from state taxes no matter what the income level. “The legislature has to reduce sales taxes and fees, be more transparent in its operations so that individuals trust government actions and fund the social services that retirees need,” he says.

But even with these negative findings retirees should Rhode Island as place to live because of its strategic location, transportation facilities and cultural and recreational activities. However, he acknowledges that “with the high cost of living in Rhode Island and fewer part-time job opportunities for retirees it is difficult to promote the state as a place to retire.”

Ernie Almonte, Rhode Island’s former auditor and partner at RSM US, LLP, a company that performs audit, tax and consulting services, says the changes in how the state taxes Social Security made by lawmakers last year was a good first step. But the former candidate for State Treasurer urges Governor Gina Raimondo and House and Senate Leadership to take a look at the state’s estate tax in the upcoming session. “I believe last year’s changes made by lawmakers was a move in the right direction but we cannot forget the legislative change to the estate cliff effect. “This certainly is a deciding factor for retirees looking to a place to settle down in their retirement years,” he adds.

Almonte also encourages state lawmakers to sit down with the Rhode Island Society of CPA’s to discuss tax policy. “Having a robust discussion on the role of tax policy to pay for necessary services and investments balanced by the ability to pay and the need to pay would be quite helpful to the long run,” he says.
House Speaker Nicholas Mattiello sees the business climate and economic outlook improving as he works to make the state’s tax structure more competitive with neighboring states. He says that the WallettHub survey did not take into account the repeal of state income tax for most Social Security recipients. The State offers retirees “a great quality of life with easy access to our beaches and we have excellent cultural attractions, restaurants, hospitals and universities, he says.

As she has said over her first year, Governor Gina Raimondo is “laser focused” on improving the quality of life for all Rhode Islanders, says deputy press secretary Katie O’Hanlon. “We’ve made a lot of progress over the past year, including eliminating state taxes on Social Security benefits for low and middle-income seniors and increasing funding for Meals on Wheels. However, we can always find ways to improve, says O’Hanlon.

It’s time for the Rhode Island General Assembly to get serious with enacting legislative proposals to attract retirees, more important to keep them from leaving for other retirement havens. Why not do a thorough review of tax policies of WalletHub’s best five places to retire and seek out best tax practices of other states? In the upcoming legislative session, Governor Raimondo and House and Senate leadership might consider reaching out to AARP Rhode Island and aging groups, along with the Rhode Island Society of CPAs, to organize a tax summit, seeking creative ways to tweak the state’s tax code to retain and attract retirees.

This WebHub study can be found at  http://www.wallethub.com/edu/best-and-worst-states-to-retire/18592/.