Squared Away Blog

Every state should have what Delaware has: a program that helps low- and moderate-income seniors find a financial survival strategy. Since it opened in 2013, the program, Stand by Me 50+, has connected more than 2,300 older residents – mostly retirees – with federal and state aid programs, advised them of Social Security’s rules, and helped them pay medical bills or eliminate debt. The services are free. Kathleen Rupert, a financial coach and head of the organization, helped one man in his 70s pay off $13,000 in debt. Another retiree doubled his income from Social Security after she determined that he was eligible for his late wife’s $1,700 benefit. About 44 percent of the program’s clients have monthly income of…

The poverty rate for widows has gone down over the past 20 years. This trend will probably continue for the foreseeable future. Women face the risk of slipping into poverty when a husband’s death triggers a drop in retirement income from Social Security and a pension (if he had one). But beginning in the 1970s and 1980s, women moved into the nation’s workplaces at an unprecedented pace. Women now make up nearly half of the labor force and are more educated, which means better jobs – and better odds of having their own employer retirement plan.  As a result, they have become increasingly financially independent. This trend of greater independence is now showing up among older women. Widows between ages…

It’s old news that the many baby boomers who did not get married and stay married are worse off financially than those who did. Unfortunately, the financial damage to one segment of this generation has broken new ground. Only 44 percent of “middle boomers” – those born in the late 1950s – have remained married to their original spouses, down from 52 percent of their parents’ generation. Middle boomers are also far more likely to have lived with partners without marrying, remained single all their lives, or even to have divorced twice. The heart of a study is determining which of middle boomers’ choices were most likely to have led to financial distress when they reached their pre-retirement years. About 11…

Financial planner Diahann Lassus views as misguided the “obsession” some baby boomers have with paying off their mortgage before they retire. But Jane Rose, who has done just that with the loan on her home in Cherry Hill, New Jersey, has discovered how liberating it is. “I’m such a happy camper,” she said. The math versus the emotion, the rational versus the irrational, head versus heart – that’s a simple way of framing a complex issue. Many boomers looking ahead to their retirement years are grappling with whether to pay off their mortgage before they retire or shovel any spare funds into their employer’s 401(k). Both arguments have merit for very different reasons. First, the math.   The alternative to paying…

The nation’s job market regained some of its momentum in March.  But it’s not just getting a job that’s key to gaining financial security – it’s about getting and keeping a quality job. In a recent report, the Institute on Assets and Social Policy at Brandeis University used interviews with workers around the country to identify three aspects of a job – beyond the size of the paycheck – that help people save money and bolster their financial security.  [Excerpts from some of the interviews are shown.] The report also gave some indications of how common it is for workers to go without them: Benefits – Employer health care, disability insurance, a 401(k) retirement plan with an employer savings match,…

Vivian Gibson Taking care of her elderly parents is Vivian Gibson’s full-time job. The last two weeks in October weren’t so unusual.  She tended to her 86-year-old father for several days in the hospital – another episode in his unending battle with ankle sores stemming from service in the Korean War. Gibson also helped her mother, age 81, get through a medical procedure and chauffeured both parents to more than a dozen doctor’s appointments and to their dentist. Her mother has been dealing with a pulled tooth, along with abnormal cells in her bladder and an abnormal EKG. In addition to their medical needs, Gibson helps them with everything else, from cleaning and dressing her father’s wound daily to buying…

Two important U.S. Supreme Court decisions in two years removed not only the obstacles to same-sex marriage but also most of the financial inequities couples faced. The June decision upholding same-sex marriage opened up financial advantages of marriage that either had been completely unavailable to gay and lesbian couples or were complicated by marrying in a different state than the state in which they live. The decision came on the heels of the high court’s 2013 ruling against sections of the federal Defense of Marriage Act, a ruling that made Social Security benefits available to gay and lesbian couples in states that permitted them to marry. In the wake of these decisions, “If marriage is an option and it makes…

Virtually all high-income workers in this country are saving in some type of employer retirement plan. But only a minority in the lowest-income group are. A new study tackles this serious shortfall for disadvantaged workers in service, retail and other low-paying jobs. The crux of the problem, the researchers find, is that they lack easy access to a retirement savings plan at their jobs. This analysis, by establishing a direct connection between access to an employer-based plan and the act of saving, goes on to show that national legislation would greatly boost the financial security of low- and also middle-income workers by providing a retirement plan when, as is often the case, their employers do not. Automatically enrolling them would…

Is long-term care insurance a luxury product? Today, most policies covering home care and assisted living and nursing care facilities for the elderly are purchased by people with relatively high earnings, according to a new survey. Long-term care used to be insurance that the middle class would buy – either individually or through an employer, union, or affinity group – when it was more affordable. But the market, which has contracted dramatically, also seems to be shifting, according to retirement experts and new data from LifePlans, a long-term care research firm. In LifePlans’ survey, 82 percent of the people who purchased long-term care policies in 2015 earned more than $50,000 per year. In comparison, only half of the general older population…

The retirement issues facing black Americans can’t necessarily be lumped together for many reasons – there are high- and low-income blacks, and there are recent immigrants as well as longstanding families.  A similar problem arises when treating the U.S. Hispanic-American population or the Asian-American population as a homogenous group. Having acknowledged this, however, some recent studies have highlighted the financial challenges particular to each group.  For Hispanic-Americans, a major issue is that they live a long time but have low participation in employer retirement plans. For Asian-Americans, extremely high wealth inequality in their working population spills over into retirement inequality. This blog looks at the recent erosion in homeownership among black Americans since 2000, which threatens to further undermine their…

Two Morgan Stanley investment advisers agreed last week to plead guilty to stealing nearly $500,000 in a set of schemes that took particular aim at their elderly or retired clients, the U.S. Department of Justice charged. One client is in his mid-80s. Multiple allegations detailed in the federal complaint demonstrate the creative ways that trusting older individuals might be deceived. For example, the Justice Department (DOJ) indicated that college tuition may have been the auspice or motivation for adviser and broker James S. Polese’s alleged fraud to obtain $320,000 from the client in his 80s – labeled Client B in the complaint. The allegations included that Polese, age 51, knew a $50,000 loan from Client B for his children’s colleg…

My husband likes to tell a story about his father, Joseph Virchick, who was a pipefitter for the Standard Oil refinery in Bayonne, New Jersey, starting in the 1950s. It was a union job – the Teamsters – paying solid middle-class wages that supported his family in an upscale Levitt development with its own swimming pool. The point here is that this pipefitter with a high school degree lived about as well as his college-educated neighbors who commuted into nearby Manhattan. Virchick and his wife, Henrietta, who also worked, sent all three kids to college. When he retired in the 1980s, they had a pipefitter’s pension to supplement their Social Security. Today, only 6 percent of private-sector workers are unionized…