Squared Away Blog

Only about half of all U.S. workers in the private sector participate in retirement savings plans at their current places of employment, according to a new report by the Center for Retirement Research. Pension coverage in this country “remains a serious problem,” concludes the Center, which also sponsors this blog. The goal of the Center’s report is to make sense of the myriad estimates of how many Americans are covered at work. One prominent source of data is the federal government’s survey of employers, the National Compensation Survey. The NCS shows that 78 percent of full-time workers, ages 25 through 64, have some type of defined benefit or defined contribution plan available to them at work. But that’s the rosiest…

The cost of employer health insurance has skyrocketed, and workers are picking up some of that growing tab. Amid employees’ grumbling, employers are loath to push more of the cost onto their workers. That’s why the consensus view among major employers, expressed in a recent survey, sounded like a cry for help. Calling rising insurance costs “unsustainable,” the vast majority said they need help from the government either to provide alternative forms of coverage or control health care and prescription costs. Employers “have reached their limit,” said Elizabeth Mitchell, chief executive of the Purchaser Business Group on Health, an employer advocacy organization that collaborated with the Kaiser Family Foundation on the survey. Employers, she said, “are tired of pouring tons…

Most people used to sign up for Social Security when they were fairly young – around 62, which is the earliest age allowed. Not today: fewer than 40 percent are filing for benefits at that age. So what else are we doing differently?  Well, working in retirement is high on the list. About one in three Americans calling themselves retired in a new AARP survey have worked or now work in part-time, seasonal and sporadic jobs or sometimes full-time. Keeping in mind that people don’t always do what they’d planned, boomers’ expectations for work exceed what current retirees are doing. Well over half of workers over 50 plan to find some kind of work after they retire. The seeming oxymoron – working “retirees” –…

The number of employers offering target date funds as an option in their 401(k) plans, and the number of workers using these funds, continue to increase. In 2013, 86 percent of all employer plans offered target date funds (TDFs) – double the share of plans offering them in 2006 – according to Vanguard’s annual report on defined-contribution plans, “How America Saves 2014,” released in June. Vanguard data also support TDFs’ growing popularity among employees: more than half of plan participants now have some or all of their retirement accounts in TDFs, compared with just one in 10 in 2006. TDFs eliminate the need for employees to wade in and make complex investment decisions about choosing and updating their asset allocations…

The housing market has shrugged off the pandemic, and home prices are rising sharply due to historically low interest rates. The market crash more than a decade ago is a distant memory. The total value of the equity in older Americans’ homes has doubled since 2010, hitting $8.05 trillion at the end of last year. The irony is that federally insured reverse mortgages, which allow a long-time homeowner to cash in on tens of thousands of dollars of equity, aren’t very popular. Last year, only 42,000 Home Equity Conversion Mortgages (HECMs) were sold – half as many as in 2010 – according to the U.S. Department of Housing and Urban Development (HUD). One reason HECM reverse mortgages haven’t caught on,…

A new study finds that debt burdens have grown for older workers and retirees in recent decades. But this isn’t the first research to reach that conclusion. What is new is whose debt burden is increasing the most: the people who score higher on simple memory and math tests. Across the three age groups the researchers examined – 56-61, 62-67, and 68-73 – the high scorers on the cognitive tests were more likely to have debts exceeding half of their assets in 2014 than the high scorers who were the same ages back in 1998. They also added disproportionately more mortgage debt than people with lower cognition during the study’s time frame, a period when house prices were rising. T…

Are people who claim their Social Security retirement benefits when they’re 62 too sick or impaired to work? Fast forward three years, to when these early claimers turn 65.  They’re about as healthy as those who decided to wait until age 65 to start receiving their Social Security retirement benefits, according to preliminary findings from a study using Medicare spending data as a proxy for health.  The early claimers are also far healthier than people who left the labor force early to go on federal disability. Some 8,500 older Americans were in the study’s sample, and they fell into four different groups: those who claimed a reduced Social Security pension soon after turning 62; those who claimed a larger pension…

Upon retiring, you suddenly have access to a chunk of money that’s been accumulating in your 401(k). It’s easy to make a move that incurs unfamiliar tax consequences or otherwise jeopardizes your hard-earned savings. Based on interviews with financial planners, as well as experts at the Center for Retirement Research, which funds this blog, Squared Away assembled the following check list for imminent and new retirees: At least one year before retiring, collect information from: Social Security – how does your monthly check vary, depending on the filing age you select, and how can you and your spouse determine the best strategy for getting the benefits you’ll need? Your employer – is an annuity an option in your 401(k) plan,…

The housing market collapse more than a decade ago inflicted a lot of financial damage on baby boomers nearing retirement. But a new study finds that some have been trying to make up for lost time by rapidly reducing their mortgage debt. Since the Great Recession, the boomers who were born in the 1950s – they are now in their 60s – have paid down more than 40 percent of their remaining mortgages and home equity loans, on average – a much faster pace than their parents did at that age. Not all the damage from the Great Recession can be repaired, however, because many people lost their homes in the wave of foreclosures. For example, the homeownership rate for…

No matter how you measure it, older Americans are falling deeper in debt. The number of people in their 60s who have debt has grown from just under half of that age group in 1998 to nearly two out of three in 2010. And their debt, as a share of their assets, has surged during that time from 10 percent to 18 percent. Debt is becoming increasingly common among older people, regardless of their level of income, according to Urban Institute researchers, who presented their findings at the August meeting of the Retirement Research Consortium. (The Center for Retirement Research at Boston College, which sponsors this blog, is a Consortium member.) Among individuals with incomes that place them in t…

Men with high school diplomas are retiring around age 63 – three years before college-educated men.  The gap in their retirement ages used to be smaller. The reasons behind the current disparity are explained in a review of research studies on the topic by Matt Rutledge, an economist with the Center for Retirement Research.  The trend for women is similar, though their story is complicated by a sharp rise in their participation in the labor force in recent decades. Rutledge provides four reasons that less-educated men are still the lion’s share of early retirees: Health. Older Americans are generally getting healthier and living longer – so why not wait to retire? Well, the health of less-educated people is poorer and…

This profile is the first in an occasional series about individual baby boomers who either have retired or are facing the retirement decision.   Jane Kisielius Jane Kisielius is at that age – 63 – when she is being pushed and pulled between the work world and the retirement lifestyle that her husband already inhabits. She retired once – temporarily – in August 2014 from a stressful job as head of the nursing team for the public schools in Quincy, a suburb southeast of Boston. But with her administrative and nursing skills in such demand, she was quickly sucked back into the labor market, this time as a part-time coordinator of a wellness program for Quincy residents. She was asked to…