Squared Away Blog

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…

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,…

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 PBS NewsHour has some terrific reporting on an important topic: the job market for the two-thirds of working-age adults who don’t have a college degree. The problem facing many of them is that, despite their hard work, they will earn much less over their lifetimes than college graduates. In stories for the NewsHour, Paul Solman highlights the opportunities available to workers without degrees at a time that many employers are scrambling to find smart, energetic people to fill good-paying jobs with benefits in light manufacturing and the skilled trades. Women of color are catching on and entering fields like carpentry and plumbing – in fact, they are over-represented in the trades. But Solman talked to employers early this…

In the late 1990s, six out of ten retirees found retirement “very satisfying.” Today, not even half do, according to a recent analysis of a long-term survey of older Americans. The news isn’t all bad, since the “moderately satisfied” share rose – and moderately satisfied is probably a more realistic goal for most people anyway. But the question of why so few people are very satisfied with their retirement state of mind is difficult to pin down. The survey analysis by the Employee Benefit Research Institute (EBRI) and past academic research provide some clues. Health.  It’s well-established that health and satisfaction are inextricably linked: healthier retirees are happier retirees, according to a 2005 study by the Center for Retirement Research, whic…

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…

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…