The numbers are dismal: the U.S. Census Bureau reports that the poverty rate rose sharply last year to 14.3 percent, the highest since 1994. Forty-four million Americans were below the official poverty line, and one out of every five children were considered poor.

If there’s a silver lining in the annual poverty report, it seems to be this: Seniors were relatively unscathed by the harsh recession that started in the fall of 2008. The poverty rate for Americans over 65 fell from 9.7 percent to 8.9 percent. And, while income was flat or down for every other age group, seniors’ income rose a whopping 5.8 percent.

At first glance, the numbers seem to point to a generational divide, with older Americans in an economic lifeboat at a time when the ship is going down.

Unfortunately, the lifeboat is leaky, too. Social Security has played a critical role lifting millions of seniors out of poverty, but the big gains last year are due to a series of one-time events that won’t be repeated. In fact, the long-term economic prospects for older Americans are no better than those facing younger age groups.

Social Security is one of the few retirement benefits that features built-in inflation protection. In 1975, Congress added an automatic annual cost-of-living adjustment (COLA) to Social Security, which is pegged to the third quarter Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). And in the third quarter of 2008 — just before the economy crashed — the CPI-W spiked temporarily, the result of a big increase in energy prices.

The result was a whopping 5.8 percent boost in Social Security benefits for 2009 — a raise that was especially generous considering the near-absence of inflation in the post-crash economy. Social Security payments can’t fall under federal law, so payments have stayed at that level throughout 2010.

Seniors on Social Security or disability benefits also received a one-time payment of $250 under the 2009 stimulus — a payment that was especially meaning for older couples near the poverty threshold.

Are women at long last closing the pay gap with men?

Median pay for American women was 22 percent lower than for men in 2008, according to the U.S. Census Bureau. That gap hasn’t changed much over time, and it’s a key factor in the economic security challenges that women face in retirement.

But one group of women has not only caught up with men, but they’re taking home significantly bigger paychecks. Working women under age 30 who are single and without children have opened up an eight percent income lead over men in the same age group. Private research firm Reach Advisors came to that conclusion based on an analysis of Census Bureau data of pay levels in the nation’s 50 largest metropolitan areas. And the lead for women ran as high as 21 percent in some cities.

The gains are driven by higher graduation among women from college and graduate schools, according to James Chung of Reach Advisors, who notes that women are collecting bachelors and advanced degrees at 1.5 times the rate of men. And Chung’s research shows that the biggest advances in pay came to young women in cities with a heavy dependence on knowledge-based jobs—and in cities with decimated blue-collar employment bases where men were less likely than women to pursue higher education.

“We’re not saying women have caught up categorically, or that a woman in a similar situation as a man earns more,” Chung says. “What our research does say is that there are so many more women graduating college than men that there are more women filling high paying jobs than men.”

The big picture isn’t very encouraging.

Census Bureau data on all working women shows that the income gender gap persists. For example, in 2008, women with bachelor’s degrees earned 33 percent less than men. And median income for all women with post-graduate degrees was 11 percent lower than men who had a bachelor’s degree.

The numbers of workplace retirement plans providing free investing guidance to employees is rising quickly, but very few workers are taking them up on the offer.

A study by Charles Schwab of more than 900 plans that it manages found that 74 percent offer free investment advice to workers, up from just 42 percent five years ago. But less than 10 percent of plan participants have signed up for the help.

What’s more, a separate national survey of 401(k) investors commissioned by Schwab turned up the surprising finding that many retirement investors think financial advice would only be valuable later in life. Sixty-two percent of respondents said they would wait until they are “approaching retirement” to get advice and 49 percent said they needed to have $100,000 or more saved for retirement before it would be worthwhile to seek out professional advice.

“Unfortunately, many people start focusing on retirement when it’s already too late,” says Catherine Golladay, Schwab’s vice president of education and advice. “Procrastination, distraction or confusion are not effective retirement planning strategies. Advice can help people focus on the right things at the right time”.

Reforms contained in the Pension Protection Act of 2006 encouraged employers to engage financial professionals to provide retirement advice to employees. Often, plans provide that guidance through their third-party plan providers, such as Schwab.

Schwab’s analysis of plan participants found that professional advice produced several significant benefits, including:

–Improved savings rates. Seventy percent of participants who receive 401(k) advice made changes to their contribution rates and the rate of savings nearly doubled, from five percent to 10 percent of pay. – Greater diversification. Plan participants who received advice had a minimum of eight asset classes in their portfolios, more than double those who didn’t get advice. – More disciplined investing behavior. Ninety-two percent of advised savers stayed the course in their portfolios through the crash of 2008.

The Social Security Administration is pushing to tighten a loophole that allows beneficiaries to increase their payments by thousands of dollars annually through a “resetting” of the date when benefits begin.

Under Social Security’s rules, workers can file for benefits as early as age 62, but they receive higher monthly payments when they wait until their full retirement age – currently 66. About half of Americans file at 62, but in most cases it’s a costly mistake.

Lifetime benefits for earlier filers are reduced based on an actuarial projection of longevity. Starting at 62 means you retired four years early, which reduces annual benefits permanently by a total of 25 percent. If you live long, that means forgoing thousands of dollars in lifetime benefits — in some cases, hundreds of thousands.

That is, unless you take back your decision. Under a little known – and little-used — feature of Social Security rules, it’s possible to reverse an early filing decision and re-file at a later age. The catch is that you must repay all the gross benefits you’ve received (before deductions for Medicare Part B premiums), which can easily total $100,000 or more for the average recipient.

Here’s how it works. You start by filing Social Security Form 521, which is a request to withdraw your application for benefits. The Social Security Administration (SSA) suspends your benefits, and sends a letter indicating how much you must repay—a process that can take up to a few months. After you’ve made the repayment, you can reapply for the benefits available at your current age.

But this option could be sharply curtailed soon. SSA is proposing to limit benefit withdrawals to 12 months after an application is first submitted. The new rules also would allow only one withdrawal per lifetime.

An SSA spokesman said the changes have been proposed to the Office of Management and Budget, and stressed that “it’s only a proposal at this time and there have been no changes to current policy regarding application withdrawal and voluntary suspension.”

Samantha Shintay won’t be retiring for quite some time. At age 23, she’s been in the workforce for all of one year as a chemist for Nike in Portland, Oregon.

Yet when she discusses retirement investing, Samantha (pictured here) sounds as though the gold watch is right around the corner. Aside from a small amount of Nike stock provided through an employer match, her 401(k) investments lean heavily toward the plan’s most conservative options, including a stable value and bond fund. Only about 40 percent of her holdings are in equities.

“I’m scared — I’ve heard a lot of stories about people completely losing their retirement,” Shintay says. “I’d like my money to be there when I want to use it.”

Are young investors taking the wrong message from the 2008 market meltdown?

Financial experts usually advise young investors to be aggressive, socking away up to three-quarters of their retirement account contributions in stocks. While stocks are riskier and markets fluctuate, they argue, equities help investors keep up with inflation, and leave you with significantly more money to spend in retirement.

But young investors appear to be losing their appetite for risk. Just 34 percent of retirement investors under age 35 said they were willing to take substantial or above average risk in their portfolios last year, down from 48 percent in 2005, according to a survey of mutual fund investors by the Investment Company Institute (ICI).

The shift away from stocks isn’t limited to young investors. The Investment Company Institute reports an overall net outflow of $18.4 billion from domestic equity funds in 2010 through the end of July. That outflow was offset by $27.3 billion that flowed into international equity funds — a pattern that’s been in place since 2006, according to Brian Reid, ICI’s chief economist. But during the same period, a whopping $155.7 billion flowed into the relative safety of bond funds.

Renée Hirshfield didn’t expect to tap her retirement account to pay for her daughter’s college tuition. But when she opened the bill for Sarah’s junior year at Mount Holyoke College, sticker shock set in.

“She had been getting a fair amount of financial aid, but there had been a slight spike in my income the year before,” says Hirshfield, a small business owner in St. Louis. “That pushed the formula for my expected share of the bill to about double what it had been before. I was blindsided.”

Hirshfield, who is divorced, gets some assistance on tuition from her ex-husband. Her father also had been helping out, but at age 93, he moved recently to an assisted living facility that costs $5,000 each month. “Now I need to come up with ways to shore up his finances, and cover the college bills,” she says. “I’m the sandwich generation.”

The financial stress pushed Hirshfield (pictured left with her daughter Sarah) to liquidate a variety of investments and savings to cover Sarah’s junior year, including a $3,000 Individual Retirement Account. That put Hirshfield among a growing subset of families tapping retirement accounts to fund soaring tuition bills in the midst of the toughest economic climate since the Great Depression.

The number of families raiding retirement accounts for college this year has doubled, according to a new study by Gallup and student lending giant Sallie Mae. The study of more than 1,600 families with college-age children found that 7 percent withdrew or borrowed funds from a 401(k) or IRA for the 2009-2010 academic year, up from 3 percent in the previous year.

And the amounts withdrawn or borrowed increased to $8,554, up from $5,318 in the previous year. “That kind of change in a single year is very significant, and very worrisome,” said Sarah Ducich, senior vice president, public policy at Sallie Mae.

The Sallie Mae study found that families continue to place a very high value on higher education, with 83 percent agreeing that it’s a key investment in the future of their children. Parents are cutting spending and working harder to pay for college, and the expenses are putting greater stress on all sources of saved and borrowed funds.

Here are three words that can stir moral outrage: Just walk away.

The phrase refers to strategic defaulters – homeowners who are opting not to keep paying mortgages that they can afford. Unlike the millions of hardship foreclosures afflicting residential real estate, strategic defaulters conclude that it no longer makes economic sense to do so when mortgage balances far exceed the value of a property’s plunging value.

The number of strategic defaults is rising in a chronically ill housing market, and the phenomenon sparks a strong emotional response.

“I would like to know where all the accountability went, and why the government is not holding people accountable for their debt,” wrote one outraged commenter on my post last week about strategic default. “People should also be thrown in jail for walking away from a home while the rest of us law-abiding citizens follow the rules.”

Eighty percent of Americans think that defaulting on a mortgage is immoral if you can afford to pay it, according to researchers at the University of Chicago and Northwestern University. It’s also been argued that homeowners have an obligation to keep paying – if they can – to help preserve neighborhood property values and thereby support the broader economy.

It doesn’t seem likely that Americans would really make big real estate decisions based on what’s good for the community – that sounds downright socialist. But does strategic default constitute a moral or ethical breach?

I posed the question to Robert Davis, executive vice president of the American Bankers Association. He argued that banks want to help homeowners find alternatives to default, and stressed the importance of talking to lenders first, citing the all-but-certain hit to credit ratings, and the possibility that a bank will come after a defaulting borrower’s other assets.

Reuters.com contributor Mark Miller is a journalist and author who writes about trends in retirement and aging. The opinions expressed here are his own.

When Ken Carpenter bought his two-bedroom Florida condominium in 2004, the investment looked like a no-brainer.

The 68-year-old retired General Motors quality engineer, who lives in Michigan, paid a little under $200,000 for the West Palm Beach apartment in a complex with a swimming pool, tennis courts and fitness facilities. His adult daughter, who lived there and had been renting, would move into the unit and pay rent. The apartment would also serve as a vacation property for Carpenter and his wife.

“I knew property values were rising, and I thought if worse came to worse and my daughter had to move out I could sell it and at worst wouldn’t lose anything,” Carpenter says.

Carpenter’s daughter moved to the West Coast in 2007. And while he’s been able to continue renting the apartment, Carpenter is losing $500 a month after paying the mortgage, insurance and condo association maintenance fees. A much bigger pain point is Florida’s collapsed housing market. The condo carries a $153,000 mortgage, but was assessed recently at just $80,000 — putting Carpenter deep underwater on the loan.

Now Carpenter is hoping to sell the condo — at a steep loss — to a third-party company that negotiates with banks to purchase underwater mortgages. But if that fails, he may decide to walk away from the condo, making a so-called “strategic default” on the loan.

Strategic defaults are quite different from defaults and foreclosures that occur when homeowners don’t have sufficient resources to make payments. The decision by homeowners with resources to walk away stems from the steep drop in housing values in some parts of the country — and their judgment that continuing to pay doesn’t make sense.

Reuters.com contributor Mark Miller is a journalist and author who writes about trends in retirement and aging. The opinions expressed here are his own.

Tax-deferred workplace retirement plans were never intended to replace the traditional defined benefit pension, and new research confirms that they have not.

The near-disappearance of defined benefit pensions led to a 19 percent decline in the value of private sector retirement plans in the ten-year period ending in 2008, according to new research from Towers Watson, the employee benefits consulting firm.

The value of traditional defined benefit pensions in eight major industries studied by Towers Watson fell from 4.19 percent of pay in 1998 to 1.99 percent in 2008 — a plunge of 53 percent. During the same period, the value of employer contributions to defined contribution plans — chiefly 401(k) accounts — rose just 38 percent, from 2.89 percent of pay to 3.99 percent.

The 401(k) takes its name from a section of the Internal Revenue code that made the accounts possible. Policymakers’ initial intent was to offer taxpayers breaks on deferred income; but plan sponsors soon realized they could use the provision to offer voluntary workplace savings plans using a pretax payroll deduction, and the 401(k) took off in the early 1980s.

Initially, 401(k)s were seen as a way to supplement existing defined benefit (DB) pensions — and that’s why the rules gave employees so much control over decisions such as whether to participate, how much to contribute, what to invest in and when to withdraw funds.