Squared Away Blog

The magic number is 35. That’s how many years of earnings the U.S. Social Security Administration (SSA) uses to calculate every worker’s pension benefit.  But 35 years can be a tall order for the many boomer women who took time off or cut back on their hours to raise their children.  Nearly half of 62-year-old working women today didn’t make any money for at least one year in their earnings history on record with SSA. But this also means they have more to gain financially than men from working longer, because each additional year of work substitutes for a zero- or low-earning year during motherhood in the benefit calculation, according to research by Matt Rutledge and John Lindner at t…

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…

It’s a simple concept. Deposit retirees’ Social Security checks right before their big-ticket bills come, especially rent. The U.S. Social Security Administration’s current schedule for depositing pension checks in bank accounts is based on each retiree’s birth date– it can be the second, third, or fourth Wednesday of each month. The problem is that cash-strapped, low-income seniors receiving the earlier checks, on the second or third Wednesdays, can fall into a common behavioral trap: they spend the money soon after it comes in and then can’t cover the rent, mortgages or credit cards due at the beginning of the following month. According to a clever new study, people who get these early monthly checks are at greater risk of resorting…

The scary thing about fully retiring is the obvious thing: the ability to earn stops cold. Most retirees live on what they get from Social Security and what they can spend from their savings, if they have any.  So how many older Americans with fixed incomes can accurately be described as being in difficult straits financially? Only about 10 percent of retired people today are being forced to cut back on food and medications to pay their other bills, concludes a summary of recent studies on retirement income by the Center for Retirement Research (CRR), which supports this blog. Tomorrow’s retirees have a more troubling outlook, in part because they will be dramatically more reliant on 401(k)s. The typical middle-incom…

Tami Fincher dives into projects head first. Two years into a 5-year plan to retire early in Central America, her short list – so far – is Boca Chica and El Valle de Antón, in Panama, and Guanacaste Province, in northern Costa Rica. She and husband Stephen Fincher are making their plans to join the growing number of Americans-turned-expatriate retirees. In 2016, more than 603,200 Social Security checks were mailed to retirees, their spouses and widows living abroad. They are moving as much for the adventure as for the lower cost many countries offer. An exotic retirement isn’t for everyone. Even if they could save on living costs, people who’ve never been keen on international travel might prefer to remain…

Mothers often work less because, well, they’re also moms. Still, they generally work consistently enough to qualify for Social Security pensions based on their own earnings records – rather than on their husbands’, as was common when more women were full-time housewives or worked just a few hours a week while the kids were at school. Yet today’s working mothers do take a hit to their earnings when they temporarily reduce their hours or take a hiatus from work for childcare. The upshot of lower earnings is less Social Security income later for mothers, according to a new study by researchers for the Center for Retirement Research (CRR supports this blog). The researchers, Matt Rutledge, Alice Zulkarnain, and Sara Ellen…

About 15 percent of Americans age 65 and over are poor, according to the federal government’s alternative definition of poverty, known as the Supplemental Poverty Measure, a yardstick that takes into account seniors’ out-of-pocket medical expenses, as well as income and tax effects not included in the standard measure of poverty. A compelling new video profiles poor older Americans who live in Baltimore, rural West Virginia, and Los Angeles. In the video, produced by the Kaiser Family Foundation, a non-profit research and policy organization focused on health care, the seniors identify rising rents and medical expenses as major explanations of financial hardship, which can mean lacking enough money for food. Squared Away also has interviewed seniors living in a Boston…

During the pandemic, the U.S. Social Security Administration leaned into providing more services and processing applications online. But that has furthered the agency’s disconnect with Native Americans living miles from its field offices in rural areas with poor internet access. That’s one conclusion from a new study of the agency’s effectiveness in reaching Native American and Alaskan Native populations. The study included some analysis of data on these communities but was based largely on interviews with tribal leaders, community members, advocates, and the government staff who assist people applying for Social Security and other government benefits. Although tribal communities have a higher poverty rate than non-Native populations, their members are somewhat less likely to be receiving Social Security’s various benefits,…

The bulk of care for the nation’s elderly is informally provided by spouses, adult children, and other family members. But if family can’t fill the need, will retirees be able to hire an in-home caregiver or pay for a nursing home in the future? Just one in five 65-year-olds has enough family and financial resources combined to provide the support they would require in the event they develop the most severe care needs as they age, according to new research by the Center for Retirement Research. At the other extreme, more than one in three will have insufficient resources to cover even a minimal amount of care. The study builds on previous report showing that most retirees will eventually need…

The United States has a notoriously complex healthcare system, and Medicare is no different. In the early months of the pandemic, the Medicare Rights Center received a large number of calls to its telephone help line from people over 65 who had suddenly been laid off and lost their employer coverage. Even when there isn’t a crisis, the center’s staff and volunteers answer all manner of questions about Medicare enrollment rules, insurance options, and what to do when an insurance company denies them coverage. Sarah Murdoch is the center’s director of client services and oversees the helpline. She spoke with Squared Away about the common issues retirees face and how they can address them. Question: Your helpline fielded 42,000 questions…

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…

The twin goals of prescribing opioids to workers with a bad back or arthritis are to alleviate their pain and keep them employed. But the use and abuse of opioids can cause poor memory, extreme drowsiness, and an inability to engage in normal social interactions – all of which limit workers’ ability to function. Opioids also have serious physical effects outside of the dependence itself. The resulting detachment from the labor market, revealed in a new research study, calls into question any benefits the medications have. Between 2012 and 2018, average employment declined by nearly 2 percent for every 10 additional opioid prescriptions per 100 adults in a county-sized area, the researchers found. Wages also dropped by 6 percent, indicating…