Squared Away Blog

Planning the Normandy invasion seems like a good comparison with the layers of logistics, to-do lists, emails, phone calls, and documentation required to move my mother from her Orlando-area home to assisted living near Boston, where I live. She was understandably reluctant to leave her home of 30-plus years. But I’m luckier than many baby boomers because elderly parents often refuse to move out. Mom liked the idea of having people in assisted living who would cook and clean for her and do her laundry. But what I believe finally convinced her that relocating was the best option were two hospital stays within 10 days last March in Orlando for two newly diagnosed conditions. I think she realized I could…

When older workers change occupations, many of them move into a lower-status version of the work they’ve done for years, according to a new study by University of Michigan researchers who tracked the workers’ movements among some 200 different occupations. Aging computer scientists were likely to become programmers or computer support staff.  And veteran high school teachers started tutoring, financial managers transitioned to bookkeepers, and office supervisors became secretaries. Late-career transitions need to be put into some context: a majority of Americans who were still working in their 60s were in the same occupations they held at age 55, the study found.  And these occupations ran the gamut from clergy to life scientists to cooks. Interestingly, while teachers, thanks to…

The seemingly random patterns in low-paid and middle-class workers’ struggles are assembled into a cohesive narrative supplied by people who let the camera in for an intimate look. A few top executives are thrown in to highlight the economy’s inequality, which lower-paid workers like Randi recognize as deeply unfair. Randi, a health care aide in rural Mississippi, explains in a new documentary that her job “pays little and works you to the bone.” Produced by Netflix, “Working: What We Do All Day,” is narrated by former President Barak Obama, who occasionally talks about his middle-class family, interviews some of the featured workers, and explains the economic shifts – globalization and the explosion in Wall Street wealth in the 1980s –…

J.D. Vance’s rural Kentucky roots, described in his book, “Hillbilly Elegy,” differ from my father’s family in southern Indiana in one important way. Vance’s violent, angry mother was a substance abuser with a trail of failed relationships in her wake. Vance carries the childhood scars. My dad’s family was a bunch of kind, reticent, teetotaling farmers. Alvin and Lena Belle Blanton and sons Gerald and Leland, 1966. But the similarities between our families struck me too – Vance called his grandfather Blanton “Papaw,” which I’d always thought was unique to my own Papaw Blanton but, I now know, is an endearment. And believe me, the corn fields and hills of southern Indiana and contiguous Kentucky are more southern than Midwestern…

Many workers are poorly prepared for retirement. Inadequate savings is a primary culprit. But the question of why workers don’t save enough was debated by our readers in comments posted to a recent article. The article pertained to a new study showing that life gets in the way of saving, which is derailed by major disruptions such as unemployment or a large, unexpected medical bill. “This confirms my thinking that the major reason for not saving is spotty employment and a lack of money,” Chuck Miller wrote in his comment posted to “Here’s Why People Don’t Save.” Debi Street agreed: “It is also the quotidian reality of too many people in low-wage, precarious jobs with no surplus to save.” T…

Behavioral economist Richard Thaler, winner of the 2017 Nobel Prize for economics, regards his field’s greatest contribution as showing that people are more likely to save if the saving happens automatically. “I’m all for empowerment and education, but the empirical evidence is that it doesn’t work,” he said in a 2015 Wall Street Journal interview. “That’s why I say make it easy.” To make saving for retirement easier, employers have increasingly turned to automated 401(k)s. Automation has taken two basic forms.  The first, automatically enrolling each employee, is pervasive and has had notable success in increasing participation in retirement savings plans.  The second form, automatically increasing the amount employees save – a concept originated by Thaler and economist Shlomo Benartzi – is…

As Americans were riveted to the spectacle of teetering Wall Street behemoths in 2008, another ruinous tragedy was beginning to unfold: a national foreclosure crisis. Black and Hispanic homebuyers were hit hardest by the foreclosures that resulted from unbridled sales of predatory subprime mortgages, which exceeded $500 billion annually at the market’s peak. In the decade since the financial crisis, the stock market has rebounded smartly, but the damage to minority communities remains.  At the height of the foreclosure crisis, entire neighborhoods were littered with bank foreclosure sales and realtors’ signs advertising sales of the properties. About 30 percent of black and Hispanic borrowers’ homes in total have gone into foreclosure in the years since the housing market crash, compared…

Investors will probably see good news in Morningstar Inc.’s annual report showing that the fees charged by actively managed mutual funds continue to come down. The truth is that focusing on fees alone misses the point. What matters is a fund’s after-fee return. There are always fund managers who excel at picking stocks and can deliver strong after-fee returns to investors year after year, justifying the high fees required to pay them. The early years of Fidelity’s Magellan fund is the classic example. The trick is finding that clever manager, which requires a combination of luck and the skill and inclination to compare numerous investment options. One thing making this task a little easier is the mutual fund industry practic…

Medical expenses increase unpredictably with age, so the crystal ball gets very hazy when trying to foretell how much you’ll need in retirement. A new study helps clear things up: a single older American spends about $39,000 on average for medical care in the final five years of life, or about $7,800 a year. For couples in which one spouse has died, $51,000 was spent during that spouse’s final years, or about $10,000 annually. These out-of-pocket expenses, which were reported by surviving spouses and family members, are for health care not covered by Medicare: insurance premiums, hospital and physician copayments and deductibles, and expenses for medications, nursing homes, and in-home care. The data also show that the financial burden on…

Picture an older warehouse worker whose back pain might qualify him for a federal cash benefit for his disability. If he’s right and his application is approved, he would get the Medicare health insurance he needs to manage his condition. But there’s a problem. Applicants often quit their jobs to strengthen the case for disability. But quitting would mean giving up his employer’s health insurance and going without coverage during the two-year waiting period for the Medicare that follows approval for disability benefits. Economists have a name for this predicament: job lock. A new study finds that the expansion of the Medicaid health insurance program, which has now spread to 40 states, opens up a new path for disabled workers…

A new article in the Journal of Financial Planning lays out the unpleasant reality facing baby boomers who really want to retire but can’t afford it: working longer helps a lot. In the article, David Blanchett, who heads the retirement research group for Morningstar’s money management unit in Chicago, calculated the impact of delaying one’s retirement date and found that it can sharply improve a retiree’s odds of financial success. “There is not one silver bullet for success but if there were it would be delaying retirement,” he said in an interview. The same case has been made for years by the Center for Retirement Research at Boston College, which supports this blog. Working beyond age 62, when individuals ar…

Retirees’ primary sources of income are the usual suspects: Social Security and employer retirement plans. They rarely use a third option: the equity locked up in their homes. The Urban Institute recently quantified how much this untapped equity could be worth to seniors in the United States and 10 European countries if it were converted to income – and the amounts are significant. The typical retired U.S. household has the potential to increase its retirement income by 35 percent, researchers Stipica Mudrazija and Barbara Butrica estimate. In Europe, using home equity would add anywhere from 19 percent in Sweden to 100 percent in Spain. ……