Squared Away Blog

When Bob Mauterstock asked how many financial advisers in the room had elderly clients showing signs of diminished mental capacity, a few hundred raised their hands. Next, he asked, how many have a protocol for these clients? Fewer than 10 put up hands. With the U.S. population over age 85 growing at a rapid clip, advisers increasingly are facing this issue, he explained last week at the Financial Planning Association meetings in Boston. A 2009 Fidelity survey backs him up: 84 percent of advisers said they had clients touched by Alzheimer’s disease. Mauterstock, the author of “Passing the Torch, Critical Conversations With Your Adult Children,” shared seven tips to help advisers, clients, and their families. While many of his suggestions…

Waiting to claim Social Security is good for retirees’ financial health – none more so than the U.S. Latino population. This message is delivered in Spanish in the above video, “El Seguro Social: Vale la Pena Esperar.” The video was produced by the National Academy of Social Insurance, a policy research non-profit, and Squared Away found it on the website of Latinos & Economic Security. Latinos & Economic Security, which is part of UCLA’s Center for Policy Research on Aging, said Latinos make up 7 percent of the U.S. population age 65 and older. But due to their lower incomes during their working years, Latinos are more reliant on Social Security than are Asian-American, African-American and white, non-Latino retirees, t…

Longer lives, eroding Social Security benefits, and rising health care costs – these are just some of the reasons older workers need to save more in their 401(k)s. To encourage them, Congress in 2001 approved a “catch-up contribution” for workers over age 50.  The size of this additional tax-deductible contribution started at $1,000 in 2002 and jumped to $4,000 by 2005 and $5,000 in 2006.  (After 2006, it continued to increase, though only at the rate of inflation, and is currently $6,000.) But the catch-up contribution has not turned into a broad-based solution to Americans’ retirement woes that some proponents had claimed at its passage.  According to researchers at the Center for Retirement Research (which supports this blog), it helps…

Half of all American adults view their top financial goal as making sure they have enough money to retire, finds a survey conducted in early April and released last week by the National Endowment for Financial Education (NEFE). That’s barely changed from 47 percent who said so in NEFE’s 2011 survey. These figures are unimpressive if one considers that most everyone eventually retires. Further, fewer than one in five U.S. workers has the luxury of a traditional defined benefit plan that will send them a pension check every month. Saving for retirement hasn’t gotten any easier either: two of three adults in the NEFE survey identified an inability to save enough as a major financial obstacle. That sentiment may b…

Karen James and John Kingrey remember very clearly breaking the news to their Millennial son that they would no longer support him. After struggling through his first year in college, Michael was sitting on his parents’ bed tossing around whether or not he should join the U.S. Navy. “I said, ‘You don’t have to join the Navy, but you’re not living here. And winter’s coming,’ ” Karen James recalled. And then she thought, but did not say, what many parents before her have thought about the offspring they love:  “You’re not living here doing nothing.” Easing their son out the door in the run-up to the couple’s 2014 retirement “was one of the toughest things we ever did,” John Kingrey said. Their…

You can’t always get what you want. But if you try sometimes you just might find you get what you need. Rolling Stones, 1969. There is nothing better that most people can do to get what they’ll need in retirement than delaying when they start collecting Social Security. The recent PBS documentary, “The Retirement Gamble,” sounded the alarm for many viewers who may be ill-prepared for the financial challenge of a long life – and not much retirement savings in the bank. To address this growing issue, financial advisers often emphasize retirement-survival strategies to their baby boomer clients. These strategies revolve around the complexities of figuring out how much to save, how to invest, or the best way to spend…

As a 20-something working in downtown Chicago in the 1980s, I spent every dime of my disposable income – and then some – on beer and Thai food, vacations, clothes, and parking tickets. Fast forward 30 years, and my niece and nephew in Chicagoland are now graduating college. It’s liberating to leave school for a full-time job and a substantial increase in one’s income after years of penury. It’s also so tempting to squander this money. But young adults no longer have that luxury. The financial demands Millennials will face over their lifetimes are shaping up as far more complex than they were for their baby boomer parents, whose primary worry was buying a house. ……

As the U.S. Department of Labor video above makes clear, the population of Latino workers is exploding. By 2024, nearly 33 million Latinos will be working in this country – they will have doubled their labor force share to 20 percent, from just 10 percent in 1995. Despite their expanding presence in the labor market, Latino-Americans face significant retirement challenges. Chief among them is that they don’t have the same access to traditional pensions and retirement savings plans that white Americans have, primarily because of where Latinos tend to work.  Two out of three Latino workers – many people prefer the term Hispanic – lack a 401(k)-style plan in their jobs, the U.S. Social Security Administration and other sources report…

Americans once defined success mainly by whether they owned a house or were better off than their parents. Today, it’s a debt-free college education and a comfortable retirement. U.S. adults feel that their top indicator of financial success is having enough money in the bank to retire (28 percent of adults), followed by sending their kids to college without having to borrow to pay for it (23 percent), according to a telephone survey sponsored by the American Institute of CPAs. Homeownership and upward mobility each came in at a distant 11 percent of the adults, age 18 and up, randomly surveyed by Harris Poll. “No longer are homeownership and upward financial mobility the hallmarks of financial achievement,” said Ernie Almonte, chairman…

Traditional 401(k) or Roth 401(k)? Workers usually don’t know the difference. Yet employers increasingly are asking them to choose. Nearly two-thirds of private-sector employers with Vanguard plans today offer both a traditional and a Roth 401(k) in their employee benefits. Just four years ago, fewer than half did. For tips on navigating the traditional-vs-Roth decision, we interviewed two members of the American Institute of CPAs: Monica Sonnier is an investment adviser in the Salt Lake City, Utah, area; and Sean Stein Smith is an assistant professor in the economics and business department at Lehman College in New York. The difference in the two types of plans is the timing of federal income taxes: In a traditional 401(k), a worker who contributes to his…

Squared Away wrote about three unemployed baby boomers on Tuesday – an arts administrator, a corporate executive, and a social-services professional – who are having to scrounge for income to sustain themselves. They are among the more than 1.5 million baby boomers caught in that painful limbo between a long and successful career and retirement – very possibly by default. All three want to get back into the labor force but may be forced to retire, because it’s more difficult for them to find employment than it is for younger workers. While nearly half of unemployed adults between the ages of 25 and 49 were able to find work within seven months during and after the Great Recession, it took…

U.S. workers have a long list of reasons, many of them legitimate, for why they can’t come up with the money for a retirement savings plan. But here’s the rub: we live in a 401(k) world. Workers who aren’t convinced of the urgency of saving should listen to people who have already retired.  Even though many current retirees have defined-benefit pensions, they have become largely unavailable to most people still working today. And these retirees say they’ve learned the hard way that saving is key. Excuses now and regrets later – these two takeaways came out of a nationally representative survey of workers and retirees by HSBC, a global financial institution. Saving for retirement is not a major priority for…