Deals & People October 10, 2024

Munnell to Step Down as Head of BC Retirement Research Center

Alicia Munnell founded the center 26 years ago and will remain a senior adviser; Andrew Eschtruth, deputy director, will step into the director role.

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Alicia Munnell, founding director of The Center for Retirement Research at Boston College, will be stepping down from her role on December 31 after more than two decades of leadership, the Center announced Thursday. 

Deputy Director Andrew Eschtruth, who has been with the organization since 1999, will serve as the next CRR director, supported by senior researchers Jean-Pierre Aubry, Anqi Chen, Laura Quinby and Gal Wettstein. Munnell will remain as a senior adviser, according to the announcement.  

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Chair of management sciences in Boston College’s Carroll School of Management, Munnell is known as “one of the nation’s most influential experts on retirement income policy,” the CRR wrote.  

Before working at Boston College, Munnell served as both a member of then President Bill Clinton’s Council of Economic Advisers and, prior to that, as assistant secretary of the Treasury for economic policy. Before joining the Clinton administration, she spent 20 years at the Federal Reserve Bank of Boston, where she became senior vice president and director of research. 

“Alicia Munnell is a distinguished economist whose scholarship has had a profound and lasting impact on strengthening the U.S. retirement system and household financial security throughout her career in government service and during her past quarter-century here at Boston College,” said Boston College Provost and Dean of Faculties David Quigley in a statement. “She arrived at Chestnut Hill with a compelling vision for her new center and went on to build the CRR into the nation’s leading research center on retirement policy. Her legacy includes the exceptional team she has created to carry on the CRR’s mission and her mentoring of a generation of scholars around the world who are refining our understanding of the economics of aging, retirement and lifelong financial health.” 

Eschtruth has helped the CRR grow from a small startup into a nationally recognized institution, earning a promotion to deputy director in March. He also has experience in managing relationships with donors and the media. Before joining the CRR, he worked in the U.S. Government Accountability Office as a policy analyst focused on the challenges posed by an aging population.  

The CRR’s senior researchers will also assume more responsibilities in shaping the center’s research program, as well as expanding development activities and mentoring junior researchers.  

“The CRR is in good hands.” Munnell said in a statement.  “I’m confident it will continue to thrive for decades to come.” 

Since it was established in 1998, the CRR has produced academic research and policy briefs to assist decisionmakers in both the public and private sectors on the issue of retirement security.  

Client Service October 10, 2024

Social Security Raises Benefit by 2.5% for 2025

The boost is lower than last year because inflation has cooled; meanwhile, the consumer price index rose by 0.2%, slightly exceeding estimates.

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The Social Security Administration announced a 2.5% increase of Social Security and Supplemental Security Income payments for 2025, even as inflation numbers came in a bit higher than expected.

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The increase will provide an average increase of roughly $50 per month, according to its annual cost-of-living adjustment announcement Thursday.

That boost is slightly below the average annual cost-of-living adjustment of 2.6%, the administration noted in its announcement. The most recent adjustment was 3.2% for 2024, when inflation was still at a higher level and hitting many retirees’ pocketbooks.

“Some other adjustments that take effect in January of each year are based on the increase in average wages,” the administration wrote in its announcement. “Based on that increase, the maximum amount of earnings subject to the Social Security tax (taxable maximum) is slated to increase to $176,100 from $168,600.” 

The Social Security increase was in line with a September forecast by the Senior Citizens League, a nonprofit that tracks the benefits. It estimated the increase would boost the average Social Security payment by $48 to $1,968.

On Thursday, the Consumer Price Index, a key measure of inflation, was revealed to be up 2.4% from one year earlier, according to the Bureau of Labor Statistics. That was slightly larger than many analyst estimates, signaling that inflation may be cooling at a slightly slower pace than markets anticipated.

According to John Choong, head of equities and markets at Investors Edge, the results may contribute to an argument that the Federal Reserve should hold back on further interest rate cuts; September’s rate reduction was its first since 2020.

“While headline inflation continued to cool in September, we think the downward trend has hit a bottom for the time being,” Choong says via email. “With both core and supercore inflation remaining sticky, any further cooling in overall inflation will be heavily reliant on energy and food costs, which seems unlikely given the recent spike in oil prices. Thus, the Fed’s stance on future cuts may need to be reassessed in light of these developments.”

Choong also pointed to the Federal Open Market Committee meeting minutes released Wednesday, which indicated that “more members than previously thought” were split between whether to make the first rate cut 50 basis points or 25 basis points.

“This, coupled with a surprisingly resilient labor market and higher wage growth since their September meeting, suggests the Fed may need to revert back to a more hawkish stance until they see further progress on inflation and/or a weaker labor market,” Choong says. “In our opinion, we don’t think a November rate cut is on the cards, and we now only expect one more 25bps cut in December, totaling to 50bps for 2024.”

The Social Security administration will begin notifying people about the benefit increase via mail starting in early December. It also noted that, for the first time, beneficiaries will “receive a newly designed and improved COLA notice that makes it easier for customers to find the information they need most.”

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