Squared Away Blog

In a new survey asking retirees what surprised them about being retired, the big winner – for 43 percent – was how much they’re enjoying it. The rest of the survey indicates that the freedom that comes with leaving the labor force often serves to leaven the considerable sacrifices some have to make for financial reasons. One in four retired households, for example, agree they are “forced to live more frugally than we wanted,” and one in 10 said they’re “spending their nest egg too fast,” according to the survey, fielded in 2023 by Hearts & Wallets, which provides data to the financial industry. I also suspect that one pleasant surprise – having more income than when they were working…

Retired parents who have a child with a disability say the income they and their children receive from Social Security is critical to their survival. Yet, for some, it still falls short of what they need after years of financial struggles, career tradeoffs, and premature retirements stemming from years of caregiving.  Without Social Security’s monthly check, “I’d probably be out on the street,” one parent told University of Wisconsin researchers in one of 12 interviews they conducted with the retired parents of children with disabilities. An older mother who fears her daughter’s disability benefits will be stopped when she turns 18 worries they might have to give up their two-bedroom apartment. “Am I going to be able to afford it,”…

By their early 60s, four out of five workers have chronic health problems. One in four has developed some type of physical or cognitive limitation. If these problems force them to stop working, they can apply to Social Security for disability. But developing a disability late in a career still has long-term financial consequences. These workers not only give up their steady paychecks. Their preparations for retirement are also derailed at a critical time. A 2018 study in the Journal of Disability and Policy Studies quantifies the financial fallout. Four groups were compared, each ranging in age from 67 to 69. One started receiving disability benefits sometime between 58 and 62. A second group went on disability between 62 and…

A 65-year-old woman in Houston can pay $5,300 a year for Medigap’s Plan C policy or she can buy a policy with exactly the same coverage from another insurance company for $1,700 a year. A 65-year-old Hartford, Connecticut, man can spend anywhere from $2,900 to $7,400 annually for the most popular and comprehensive Medigap policy – Plan F. The price disparity for Plan A for a 75-year-old man in Manchester, New Hampshire, is also large: anywhere from $1,820 to $6,301. These are fairly typical of the enormous differences in the premiums that consumers across the country are paying for their Medigap policies. The price disparities are “extraordinary and unable to be justified purely by the coverage that they’re offering,” said…

Baby boomers love to discuss this age-old question: Should I pay off the mortgage before retiring? Our blog readers fell into two camps in their comments on a recent article. Some made an emotional argument – that a mortgage-free retirement makes them feel secure. The other camp argued that paying off the mortgage does not make financial sense. The article, “Boomers Repairing their Mortgage Finances,” described research showing that boomers have sharply cut what they owe on their mortgages by paying extra in the years since the housing market bust. People naturally pay more of this debt as they age. But the boomers’ rapid payoffs partly explain why 40 percent to 50 percent of Americans in their 60s no longer…

Sumat Lam, a recent college graduate, was skeptical when his Silicon Valley employer transferred him to Austin, Texas. What he found was a high-tech mecca that defies the stereotypes of 10-gallon hats and Southern drawls. Google, Apple and Amazon have established outposts in the “Silicon Hills” of Texas’ Hill Country. The young workers moving there are “bringing in their culture and influences from Boston and New York,” Lam told VOA News. Taylor Hardy lives in Dayton, Ohio, but she might as well be living on a different planet. This young nursing assistant can barely eke out a living. Her plight is shared by too many others in this former industrial hub that has been in a downward spiral that accelerated after…

When a marriage ends in divorce, there are no fewer than seven ways that it could damage a person’s finances. Divorce can rack up costly legal fees; force a house or stock sale in a down market; increase living expenses; increase tax rates; hamper the ability of the primary caregiver – mothers – to earn money; require fathers to pay alimony; and reduce each partner’s access to credit. A new study looking at their impact on workers’ future finances concludes that divorce – the fate of four in 10 marriages – “substantially increases the likelihood” that their standard of living will decline after they retire. ……

The Squared Away Blog’s focus is on how informed financial decisions can improve one’s personal finances or retirement prospects.  But much that impacts our standard of living is not in our control. One example is the cost of consumer goods, healthcare, and renting or buying a home, which vary widely from one city or region to another.  To highlight this variation, the Tax Foundation in Washington, D.C., used recent data from the U.S. Bureau of Economic Analysis to create the cool interactive map below, which shows locations with the highest cost of living (bright orange) and the lowest (bright turquoise). Running a cursor over the map displays metropolitan and rural areas and their comparative living costs, measured in terms of…

Much of what I’ve been writing about lately are the dire prospects for elder care when the oldest baby boomers begin reaching their late 80s within a decade. The challenges we will face are exacerbated by the physical design of our communities based on single-family homes scattered around the suburbs. This leads to the isolation of seniors, especially when driving becomes difficult and older adults can become confined to their homes. It can also make it expensive to provide services in their homes as home care workers, visiting nurses, and other providers must travel relatively long distances to serve their clients. Fortunately, there’s an alternative. In my latest Risking Old Age in America podcast, Lizbeth Heyer, President of 2Life Communities in greater Boston, describes…

Hard work isn’t always enough. For three decades, two families – the Neumanns and the Stanleys, one White, one Black – fought hard but failed to regain the financial security they had before being laid off from their good manufacturing jobs with benefits.  A powerful and heartbreaking PBS Frontline documentary that aired last week followed them from 1991 until earlier this year, as they moved from one low-paying job to the next, always striving for incremental improvements in their living standards. The timing of this documentary seems particularly relevant in a U.S. election year in which inflation and rising inequality are central concerns for millions of voters.  The two Milwaukee families allowed the reporters to capture intimate portraits not only of…

This is a fun TED talk on a topic all of us can relate to: procrastination. It is relevant to a central theme of this blog: retirement. Research shows that procrastination plays at least a small role in why so many U.S. workers haven’t saved enough to retire in the lifestyle they’re accustomed to. The urgency of saving early has never been truer than it is for Millennials and Gen-Z. More on that later. First, let Tim Urban explain his theory about procrastination. He is a master procrastinator, demonstrated by his handling of his senior college thesis, a year-long project jammed into three days that included two all-nighters. He argues that when a deadline is fast approaching, procrastinators panic and…

The promise of America is progress, but that progress stalled for the youngest generation: U.S. workers under age 45 earned dramatically less than workers who were that same age a decade ago, the Federal Reserve Board’s latest survey shows. For Americans 35 through 44, the median household income – the income that falls in the middle of all earners – was $53,900 in 2010. That’s 14 percent less income than in 2001 when households in the 35-44 age bracket were earning $63,000, according to the Fed’s Survey of Consumer Finances released Monday. For young adults in the under-35 age bracket, median income fell to $35,100 in 2010, from $40,900 for that group in 2001. The median income also declined, by…