Squared Away Blog

To paraphrase a U.S. senator in 1977, the moral test of government is how it treats the sick, the poor, and its children. That rings especially true during an historic public health emergency like COVID. Congress came through with financial relief to blunt the pandemic’s impact, and the money that flowed through the economy provided more Americans with health insurance, while also reducing poverty. Several newly released U.S. Census reports “show how much vigorous policies can do to prevent poverty and preserve access to health care,” the Center on Budget and Policy Priorities concluded. The Uninsured. During the pandemic, the share of all adults lacking health insurance declined from 9.2% in 2019 to 8.6% in 2021, reversing the trend of…

Retirees who postpone collecting Social Security from age 62 to 66 – the full retirement age for most baby boomers – get around a third more in their monthly checks. Delaying to 70 increases it even more. There’s one problem with this strategy. Many people want to retire well before they turn 66. But there is an alternative for people with 401(k) savings: retire but don’t sign up for Social Security and withdraw an amount from the 401(k) equivalent to the Social Security check. Then delay Social Security for a few years. The start date will, of course, depend on how much money is in savings and how much of it the retiree can spend comfortably. In a recent experiment,…

Too many retirees of color are in the financially precarious state between outright poverty and barely getting by. Far larger shares of the nation’s Latino, Black, Asian, and Native American retirees are financially insecure than Whites, according to a new report confirming the now-familiar racial disparities that face both workers and retirees in this country. But what also stands out in this report, produced by The Gerontology Institute at the University of Massachusetts, Boston, is the gaping disparity between retired single people and married couples. First, consider older White Americans. They are in the best position financially. Yet about two in five single White retirees are financially insecure, while only one in five couples is. Single Latino retirees are muc…

Many employees in the private sector, when left to their own devices, either save very little in the company retirement savings plan or don’t even sign up for it. But a growing number of companies have revamped their 401(k)-style plans over the past two decades to strengthen the incentives for employees to save. While progress has been gradual and uneven, the companies are moving in the right direction. In a new study, researchers have compiled a unique nationally representative data set that tracks the changes employers have made to their 401(k)s and 403(b)s. The findings describe three important areas in which they are making progress: About 41 percent of the largest 4,200 U.S. employers in this study automatically enrolled workers…

A popularized image of parents who struggle when adult children move back home is not shaping up as an accurate picture of the arrangements. Unemployment, divorce, college graduation – adult children in their 20s and 30s move back into a parent’s home for many reasons. And the parents can have all sorts of reactions, good and bad, to their boomeranging kids. Some parents get stressed out by young adults who return home because they need financial support. Others welcome having the kids back to pad the empty nest, help with household chores, or help pay the bills. The return home isn’t necessarily a one-time thing either. “As they attempt to gain financial independence, adult children may alternate between living on…

For baby boomers who thought they were on the path to retirement, the road is shifting beneath their feet. Danielle Harrison, a financial planner in Columbia, Missouri, sees a raft of problems stemming from the COVID-19-induced economic slowdown. Many older workers getting close to retirement age are taking big hits to nest eggs that were already too small. Some boomers who lacked pensions and were behind on saving tried in recent years to make up for lost time with a riskier portfolio in the rising stock market – now they’re experiencing the downside of that risk. Others are scrambling to pay expenses or maintain debt payments as their income drops, altering their financial security now and changing their calculations for…

“Self-control” is a catch-all label for resisting all sorts of temptations, including overspending. According to a new study, controlling overspending can be broken down into three distinct behaviors: • Setting goals such as buying a house or saving money. • Monitoring bank statements to systematically track where your money goes. • Committing to the goal in the face of short-term temptations to spend. Data for the study came from a nationally representative U.S. survey of households over age 50. The survey has extensive information about the households’ finances and about each individual’s resolve to set goals, track their finances, and carry out their commitments – whether financial or non-financial. Households lacking self-control disproportionately have lower net worth – no surpris…

Only about one in four older Americans consistently work in a traditional employment arrangement throughout their 50s and early 60s. For the rest, their late careers are punctuated by jobs – freelancer, independent contractor, and even waitress – that do not have any health or retirement benefits. Some older people are forced into these nontraditional jobs, while others choose them for the flexibility to set their own hours or telecommute. Whatever their reasons, they will eventually pay a price. The Center for Retirement Research estimates their future retirement income will be as much as 26 percent lower, depending on how much time they have spent in a nontraditional job. During these stints, the issues are that they were not saving…

Brisk sales of Linda Novak’s crocheted scarves and baby blankets have subsidized the 62-year-old’s Manhattan rent since her 2012 layoff. Boston resident Marcus Queen, 58, receives food stamps while trying to reignite his beloved career: helping city kids get a leg up. Joseph Imperiale, 66, wants to get back into the business world, so he doesn’t have to tap his retirement savings yet. Nearly three years after the Great Recession officially ended, more than 900,000 baby boomers laid off several months or years ago are still pounding the pavement, unable to find employment in an economy that produced only 88,000 jobs in March. They simply are not ready to retire – financially or emotionally – but they often feel that…

This video examines wealth through the prism of race. It compares the share of the nation’s African-American, Hispanic, Asian-American and white populations who have net worth exceeding $1 million; net worth equals financial and other assets minus mortgages and other debts. If the fact that there is a racial divide isn’t surprising, the magnitude of it might be. Other factors also have an enormous influence over who gets rich, and understanding this becomes increasingly important amid rising inequality. The biggest determinant of wealth is whether our parents are rich, as recent research has shown. Age and education are also crucial. That’s because older people have more time to save and accumulate wealth, and a college education typically leads to jobs…

How well you will live in retirement will depend on two things: your income and the local cost of living. A new study that ranks each state based on how many of its retirees can meet a basic standard of living comes up with an interesting combination of places that are financially friendly – or not – to people over 65. For example, who would expect Mississippi to be in the same company with California? The cost of living in Mississippi is much lower than in California – and most states. But 31 percent of Mississippi’s retired single people and 24 percent of its retired couples fall into what the study calls the “gap” between being poor and having barely…

Americans who save for retirement throughout their working lives often hold tight to that savings after they retire. A new study shows they eventually do spend much of this money and sheds light on where it goes. The study focuses on the retirement spending patterns of couples, adding to similar past studies on single retirees. While both spouses are alive, the researchers found that a couple’s wealth remains relatively stable over time – until they start paying for medical care, nursing homes, and other major end-of-life expenses. The researchers examined spending patterns for more than 4,600 households over a 15-year period using a subset of the Health and Retirement Study that collects data on the health and wealth of peo…