Squared Away Blog

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…

The minority of Americans who have a financial adviser say they feel pretty good about where they are. It’s everyone else who is largely dissatisfied with their finances. Among the workers and retirees who consult a financial adviser, two out of three describe themselves as financially secure, and the others are presumably working on it. Only one of three people who do not use an adviser are feeling secure, according to Northwestern Mutual’s January survey of more than 4,500 adults over age 18. About 80 percent of those with an adviser also have a plan for how they will pay off debt, whether members of Gen Y and Gen Z with student loans or baby boomers with a mortgage. Only…

The typical baby boomer couple had $135,000 in retirement savings last year, up from $111,000 in 2013 amid a rising stock market and a strong job market that has kept them employed, according to a report on the new Survey of Consumer Finances (SCF) by the Federal Reserve. Yet $135,000 – the balance for working couples who have a 401(k) – won’t go very far. This amount, held in both their 401(k)s and IRAs, will generate about $600 per month, said the SCF analysis by the Center for Retirement Research, which supports this blog.  That’s obviously not enough to supplement most retirees’ primary source of income: their Social Security benefits, which are slowly eroding for various reasons.  The purchasing power…

Dramatic changes in the U.S. family structure over several decades – more divorce, single motherhood, and unmarried couples – could have a big impact on the financial security of baby boomer women as they march into retirement – and on future retirees. A review of studies on Social Security spousal and survivor benefits by the Center for Retirement Research, which sponsors this blog, examines the difficulty of providing retirement security for the growing ranks of women and mothers who do not fit the traditional family mold. Social Security’s benefits were designed for the typical family when the pension program was enacted in the 1930s, a family portrayed at the time by Henry Barbour and his wife, Fanny, in the popular…

If you don’t know this chart on the Social Security website, you should: The chart shows the so-called Full Retirement Age (FRA), which is the age at which you’re entitled to your full monthly Social Security benefit, a pension based on your earnings history. Many boomers see their FRA as the time they ought to retire. But the question they should be asking themselves is: will the monthly benefit I’ll get at my FRA be enough? At a time when many Americans are in danger of not having enough money for retirement, the answer is frequently no. ……

It was Gerry Smythe’s final confirmation he had never quite felt at home working in the Oklahoma airplane manufacturing plant.  When well-meaning coworkers bought a cake to celebrate his and another person’s retirement, they got Smythe’s name wrong on the sign inviting everyone to the break room. At age 63, he until recently was one of the nation’s 10 million older Americans working in physically demanding jobs in difficult conditions. He felt worn down by the factory noise, carbon dust, and standing all night on collapsed arches to assemble cabin floor beams for Boeing 777s.  His requests for a transfer away from the hard floor never went anywhere, he said. “It wasn’t really the job – I kinda liked t…

Financial advisers and retirement experts say the best advice they can give workers to prepare for old age is to save, save, save. But two young researchers might argue this advice isn’t sensitive to the hurdles that Black and Hispanic workers face when they try to save. At a recent panel discussion, the researchers presented a laundry list of the hurdles, which are harder for minority workers to clear and can be insurmountable. One disadvantage is widely understood: people of color tend to be in lower-paying jobs overall and disproportionately work in the retail or the food service industries, which have irregular hours, high turnover, and wages that often depend on tips. Many of these jobs do not include employ…

The share of people in their late 50s with the second most severe form of obesity has tripled since the early 1990s. This grim fact, featured in a recent Squared Away article, clarifies COVID-19’s danger to older Americans. The article, “Our Parents Were Healthier at Ages 54-60,” summarized research establishing that baby boomers are less healthy than their parents’ generation due to several conditions related to obesity, including diabetes, pain levels, and difficulty performing daily activities. The poorest Americans’ health deteriorated the fastest – and COVID-19 is preying on them. “This decline in markers of metabolic health seems to correlate with increased vulnerability to the pandemic,” wrote one reader, Dan O’Brien, who was among several who commented on recent health-related…

Manhattan residents who itemize their federal tax returns pay an average $102,000 in state and local taxes – more than anywhere else. The second highest tax tabs, nearly $50,000, are in Marin County, the home of musicians and movie stars across the Golden Gate Bridge from San Francisco. Other enclaves with large bills for property, sales, and income taxes include Falls Church, Virginia, a high-income community outside Washington, D.C., and Teton County, Wyoming, where the super-wealthy buy property on the open range surrounding Yellowstone and Grand Teton National Park. In 2017, Congress put a $10,000 cap on the amount of state and local taxes – or SALT – that all homeowners could deduct on their federal income tax filings. T…

Nearly 8 trillion dollars sits in Individual Retirement Accounts, or IRAs. This is nearly half of all the value held in the U.S. retirement system, which also includes employer pension funds and 401(k)s. A big reason IRAs were created in 1974 under the Employer Retirement Income Security Act (ERISA) was to give individuals not covered by retirement plans at work an opportunity to save in their own tax-deferred accounts. So, are IRAs helping these workers? IRAs “have drifted very far from their original intent” of helping those who need them most, researchers for the Center for Retirement Research conclude in a new study. Who is eligible to receive tax benefits for saving in an IRA has morphed over the years…