Correcting Misperceptions about Social Security’s Fate

Once a year, Social Security reports on the program’s financial outlook but the bottom line doesn’t change: the reserve in the trust fund is running out of money. Many workers and retirees go straight to the inaccurate worst-case scenario: retirement benefits will cease when the reserve is depleted. In fact, if Congress doesn’t address the looming shortfall – and there’s still time for that – the payroll taxes that fund benefits will keep flowing into the program. But the reserve is shrinking because it is being used to cover part of the benefits being paid to the growing ranks of retiring boomers. Once the reserve depletes, benefits will not be eliminated, though they will have to be reduced if Congress…

October 19, 2023

Profiling Retirees Who Carry too Much Debt

Not all borrowing is bad. Someone with a low-rate mortgage of modest size on an appreciating house has a very valuable asset. And some retirees pay off their credit cards every month without breaking a sweat. But about four out of every 10 older U.S. households are falling into the trap of having too much debt, a new study finds. These high-risk households, mostly retirees, tend to be burdened by low incomes or large balances on unsecured debt like credit cards, which accumulate interest at a rapid pace. Some are overleveraged and may be unable to afford their homes. The low-risk borrowers are their mirror image: no unsecured debt and relatively low debt payments and debt-to-asset ratios. The share of…

October 18, 2023

Many Couples Do Not Coordinate 401(k) Matches

Imagine a married couple. Both work, and their earnings are identical. But one spouse’s employer is matching every dollar of her 401(k) contributions up to a cap. The other spouse’s 401(k) match is only 50 percent. They could increase how much they are saving for retirement by contributing first to the 401(k) with the full match in this simple version of the myriad situations married couples face. But, according to a new study, one in four couples do not prioritize the more generous employer’s 401(k) matching funds. This lack of coordination may have a cost: the average couple who leaves match money on the table could give up nearly $700 in a year. That may not sound like a lot…

October 12, 2023

Criticisms of Medicare Advantage Marketing Continue

A recent blog about advertisements for Medicare Advantage policies brought a torrent of criticisms from our readers that…

October 10, 2023

A Use for Online Information You’re Sharing: Fraud

There is no end to the websites and phone apps requiring your phone number, email and other personal information as the cost of passage into the products and services they provide. Even some financial companies sell your data to third parties for a profit. But it is virtually impossible to see what happens after the fresh information you’ve handed over is attached to your existing profile in the netherworld of the cloud. New research confirms what many have suspected: some of your data is being used to rip you off. By comparing the fraud complaints filed by Android and iPhone users after Apple added a tough new security feature, the researchers, all business professors, found that the iPhone’s anti-tracking technology…

October 5, 2023

Why Blacks, Hispanics Contact Social Security More Often

In our high-tech world, virtually any transaction or communication can be executed online. Yet, despite the range of services that Social Security offers on its website, two-thirds of older Americans thinking about retiring or planning to start up their benefits speak directly to someone at the agency, either by phone or at a field office, at some point during the process. For years, the agency has allowed workers to create an online my Social Security account, which helps with retirement planning by laying out their monthly benefit levels, depending on the age they start. This is very useful information when workers are trying to determine how long they might want to wait before claiming their benefits, which can also b…

October 3, 2023

Health, Economic Disparities Emerge in the Middle Class

The fortunes of Americans whose wealth is in the top 10 percent have soared, leaving the rest of the country trailing in their wake. But let’s focus instead on the unsettling trends that have developed within the middle class. Both the health and finances of older workers have deteriorated in the bottom half of “the forgotten middle” over the past two decades, according to researchers at the University of Southern California and Columbia University. Take one important indication of this. Home equity is typically an older worker’s largest single asset. But homeownership has fallen sharply in the bottom half of what the researchers define as the 60 percent of older Americans in the middle class. The homeownership rate in t…

September 28, 2023

Social Security’s Disability Benefits Save Lives

A third of the people who receive federal disability benefits have no income other than their benefit checks. And given their serious medical conditions, their death rate is much higher than that of the general population. In such a vulnerable group, small increases in their disability checks produce big results, finds a new study funded by Social Security, which administers the federal program. For individuals receiving about $10,400 a year in average benefits, for example, an additional $1,000 per year would cut their mortality rate by up to a third of a percentage point in the first four years after their benefits start. The researchers found similar, positive results for disabled workers with families. When the combined benefits paid to…

September 26, 2023

State Efforts to Increase Food Stamp Use are Working

Moves by state governments to improve access to food stamps have been very effective in increasing the number of retirees and people with disabilities who get the benefits, a new study finds. The states, given a wide berth to administer the federal Supplemental Nutrition Assistance Program, or SNAP, as they see fit, have responded in recent decades by easing access to food stamps for their low-income residents through a variety of policies. Many states have loosened the eligibility requirements by, for example, increasing the limits on the dollar amount of assets applicants are permitted to have or by automatically qualifying them when they receive other means-tested benefits. A second set of policies aim to reduce so-called transaction costs, which broadly…

September 21, 2023

Moving Mom into Assisted Living was a Big Lift

Planning the Normandy invasion seems like a good comparison with the layers of logistics, to-do lists, emails, phone calls, and documentation required to move my mother from her Orlando-area home to assisted living near Boston, where I live. She was understandably reluctant to leave her home of 30-plus years. But I’m luckier than many baby boomers because elderly parents often refuse to move out. Mom liked the idea of having people in assisted living who would cook and clean for her and do her laundry. But what I believe finally convinced her that relocating was the best option were two hospital stays within 10 days last March in Orlando for two newly diagnosed conditions. I think she realized I could…

September 19, 2023

Most People Think Medicaid Sign-Up Should Be Easier

To help people through the COVID public health emergency, Congress barred the states from removing people from the Medicaid rolls in return for providing additional funding for their programs. In March, those pandemic-era protections expired and states are returning to the old practice of requiring residents to verify their eligibility to renew the coverage. As a result, many states have begun cutting Medicaid enrollment for reasons ranging from ineligibility to a failure to submit paperwork. KFF, a health research organization that has been tracking Medicaid enrollment post-pandemic, said that about three out of four people have who have lost their coverage were dropped for procedural reasons, such as not completing their paperwork or missing a deadline. This is a concern, KFF…

September 14, 2023

The Mothers of Children with Disabilities: Can They Retire?

Juggling a job and being a mother is hard work. It’s much tougher if your child has a disability. And when these mothers look ahead to retiring, the challenges are just as complex as their current situations. One woman whose daughter has a disability predicted in a recent interview with a researcher that she’ll work until she’s at least 72. “I need to be earning up until that point in order to make sure that I have more set aside for my daughter. And I don’t consider my needs primary. I consider hers to be primary,” she said. Another working mother worried, “Is my son going to be living with us? Is he going to be able to go off…

September 12, 2023