Squared Away Blog

Family harmony and your parent’s desires are the top priorities during their final years of life – not long-simmering sibling arguments or what you may feel is best for him or her. That’s why it’s critical for the entire family to gather around parents for caring and gentle conversations before a crisis occurs, such as a medical emergency or sudden cognitive decline. Jennifer B. Warkentin “These are the kinds of conversations that need to happen while a parent is still able to discuss the options and make their wishes clear,” said Jennifer B. Warkentin, a clinical psychologist specializing in geriatric care. The Conversation. Numerous conversations will actually be required to sort out myriad potential needs as a parent continues to ag…

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 prospect of retiring opens a Pandora’s box of questions. But one big question dominates all the others: How will I manage my finances when I retire? This is a vexing problem, and baby boomers could use some help thinking it through. To ease the process, a team at UCLA and Cornell University led by David Zimmerman, a UCLA doctoral student, created an online decision tool. In an experiment, they found that the tool might help future retirees understand how to smooth out their income over many years and make their savings last. The results are preliminary, and the researchers are refining their analysis. But for the initial experiment, they recruited 400 people, ages 40 through 63. The participants wer…

Medicaid pays for care for six out of 10 nursing home residents. To reduce the program’s costs, the Affordable Care Act (ACA) encouraged states to expand the care that people over 65 can receive in their homes or through community organizations. The hope was that they would delay or – even better for them – avoid moving into a nursing home if they had easier access to medical and support services. Many states historically did not use Medicaid funding to pay for home care. The ACA’s Balancing Incentive Payments Program required the 15 states that chose to participate in the reform, including Nevada, Texas, Florida, Illinois, and New York, to increase spending on home and community care to half of…

On-the-job injuries, like layoffs, are life-altering events. A worker can lose tens of thousands of dollars in earnings over many years as a result, according to a new RAND study. The researchers used data from California’s workers’ compensation system to investigate what happened to injured workers’ earnings over a 14-year period. They were interested in the people whose injuries were serious enough to prevent them from working for a significant amount of time. These injured workers, who had either a temporary or permanent disability and received workers’ compensation, were compared with workers with minor injuries who didn’t miss any work or were out for fewer than four days. After their injuries, the workers with significant lost time earned $920 less…

For older workers starting to think about retiring, the economic maelstrom the coronavirus set in motion is a reminder of that sinking feeling they experienced just over a decade ago. In 2008, the stock market plunged nearly 40 percent, accelerating the steep decline that was underway in U.S. house prices. The unfolding 2020 recession is playing out differently. But both downturns have one thing in common: Social Security as a stabilizing influence on older workers’ retirement finances. A 2011 study of the change in baby boomers’ finances during the Great Recession found that total wealth dipped by 2.8 percent, on average, between 2006 and 2010 for households between ages 51 and 56. The 2.8 percent decline in wealth at t…

Medicare Part D, passed in 2003, has significantly reduced seniors’ spending on prescription drugs. But the coverage hasn’t protected Leslie Ross from near calamity. The 72-year-old diabetic needs insulin to stay alive. The prices of these drugs have skyrocketed, forcing her to supplement her long-lasting insulin, Lantus, with more frequent use of a less-expensive insulin. This one remains in her body only four hours, requiring more vigilance to control her blood sugar. To cut her Lantus bills – nearly $1,700 this year – she has sometimes resorted to buying unused supplies from other diabetics on eBay. “You take your chances when you do stuff like that,” she said. “I checked that the vial hasn’t been opened. It still had t…

The impact of retiring on mental health is very hazy. So many considerations factor into whether people retire that it’s difficult to predict how it will go. Some are uplifted by finally getting out from under a bad situation while others gets depressed because they’ve lost their purpose or important social connections. Reactions to being retired depend on, among other things, the person’s health, whether the job is fulfilling or physically very strenuous, and whether they’ve planned for how to fill the days. So it seems important to figure out why some people thrive in retirement while others become depressed. Financial considerations are, of course, central to the timing. But money aside, my own experience watching 60-something friends tells m…

It is the most important source of retirement income for most workers. Yet too many older Americans lack a basic understanding of certain aspects of Social Security benefits. In fairness, many people got some key questions right in a survey that quizzed them about the program’s rules and incentives. But a significant minority, and sometimes a majority, revealed a poor understanding of several major features of the program. As the researchers note, misunderstanding Social Security benefits could lead to poor financial decisions about retirement. They analyzed responses by more than 2,300 people – all between ages 50 and 70 – to a nationally representative survey administered online in 2008. The survey, which took about half an hour, started with basic…

Rather than put his money in a bank, my cousin, who’s in his mid-40s, makes loans in $25 increments on a peer-to-peer lending website.  He decides on the amount of risk he’s willing to take on – and the riskier the borrowers he chooses, the more he earns on his “savings.” My cousin’s $25 investments illustrate how much our consumer finance market has evolved over several decades. We all embrace the convenience. Car loans are a more affordable way to buy a vehicle, Internet banking lets homebuyers get several mortgage quotes at once, and paying with cell phones is much easier than paying with cash or even credit cards. But all this innovation has a downside. One example is t…

A growing number of Americans can’t pay their rent, and the queues forming outside food banks hint at human need on the scale of the Depression. For Americans who were already living paycheck to paycheck prior to the pandemic, the $1,200 relief checks the government has deposited into their bank accounts are too little and came too late. Few are being spared the financial fallout from the COVID-19 economic contraction. But economists predict the damage being done to working and middle class people will cause another surge in U.S. inequality, just as the previous recession did. The big unknown is whether this downturn, which is unfolding more violently than the previous one, will do even more damage to livelihoods and…

In the United States and Singapore – places that emphasize self-reliance – many older workers and retirees admit that, if given a do-over, they would have saved more money over the past 20 or 30 years. Regret was more common in the United States – 54 percent of older Americans had it versus 46 percent in Singapore, according to comparable surveys in each place. Perhaps the reason Singapore has less is because the government requires that employees set aside more than a third of their income in three government-run savings accounts for retirement, healthcare, and home purchases and other investments. On the other hand, Singapore doesn’t have Social Security or unemployment insurance, and private pensions are rare. Whatever the differences,…