Squared Away Blog

Social Security’s great achievement for retirees is a guarantee that they’ll get a check every month, without fail. Less appreciated is the stability the program brings to local economies and businesses. Retirees use their Social Security benefits to patronize establishments that sell goods and services locally such as restaurants, car repair shops, banks, and hospitals. That steady supply of spending in good times and bad helps to stabilize economies, according to research conducted by the Center for Retirement Research and funded by the U.S. Social Security Administration. Between 2000 and 2018, working-age adults’ employment levels and earnings were less affected by the ups and downs in the state unemployment rate in counties where Social Security provides a higher percentage of…

If you need help managing your finances in old age, it’s a lot of work to find someone – and not a very pleasant task to think about. But it’s crucial that retirees plan for this. As to when or whether you might need help, it really depends on your individual circumstance. Attorney and researcher Naomi Karp cites a variety of studies that provide some clues to the different ways this process can play out. People who develop dementia obviously need what she calls a financial advocate. This might be a trusted friend, family member, lawyer or professional financial adviser. But roughly a third of aging Americans who are experiencing natural cognitive decline are prone to making poor decisions about…

Opioid painkillers are a double-edged sword for older workers. The medications allow them to keep working through their joint or back pain. But a slide into addiction would interfere with doing their jobs. A new RAND study of workers over age 50 has identified some of the negative consequences of relying on opioids. Rather than promoting work, the researchers found that opioids can cause or exacerbate disabling health conditions, hindering users’ ability to work and making them increasingly dependent on federal disability benefits over time. Bad results from opioid overuse may seem predictable, given that doctors prescribe them to people who are in worse physical condition in the first place. But older workers’ health is already in decline, just by…

The bulk of care for the nation’s elderly is informally provided by spouses, adult children, and other family members. But if family can’t fill the need, will retirees be able to hire an in-home caregiver or pay for a nursing home in the future? Just one in five 65-year-olds has enough family and financial resources combined to provide the support they would require in the event they develop the most severe care needs as they age, according to new research by the Center for Retirement Research. At the other extreme, more than one in three will have insufficient resources to cover even a minimal amount of care. The study builds on previous report showing that most retirees will eventually need…

The fate of the recent expansion of the federal child tax credit is uncertain in the ongoing budget negotiations in Congress. What is clear is that poor and low-income families are putting the increased assistance to good use. Nine out of 10 families earning less than $35,000 are spending the money on one or more essential living expenses, which include food, utilities, housing, clothing or education needs like books and after-school programs, according to an analysis of U.S. Census data by the Center on Budget and Policy Priorities. The American Rescue Plan passed in March temporarily increased the credit from $2,000 to $3,600 per year per child for kids under age 6 and to $3,000 for older kids and teenagers…

The federal tax code offers a nifty tax credit to low-income workers who save for retirement. If only it reached more people. The Saver’s Credit offers what appears on its face to be a strong incentive: the IRS will return up to 50 percent of the amount low-income workers and married couples put into a retirement plan. But Barbara Wollan, an 18-year volunteer in Iowa with the Volunteer Income Tax Assistance program, or VITA, which provides free tax preparation to low-income workers, said her clients often don’t qualify. The reason: the tax credit is not what the IRS calls “fully refundable.” For example, a single person earning $19,750 or less is eligible for a tax credit equal to 50 percent…

Hiring an attorney or other representative seems to be helping workers who apply for federal disability insurance. Legal representation dramatically increases the chances that individuals with disabilities will be awarded benefits at the initial level of review of their applications filed with the U.S. Social Security Administration (SSA), new research finds. Hiring an attorney has been common when applicants appeal an initial denial to an administrative law judge. What’s new is that they are increasingly getting help earlier – when they first file the application – from an attorney or, in some cases, another representative who has passed an SSA test on the agency’s administrative procedures. But disability experts have debated the value of representatives amid concerns about unscrupulous practices,…

The magnitude of the tragedy is unfathomable: Americans have lost nearly 187,000 family members living in nursing homes to COVID-19. Even when residents survive outbreaks in the facilities, their family caregivers experience trauma. Barred from visiting residents during the lockdowns, caregivers observed – on Zoom, over the phone, or from the other side of a nursing home window – loved ones suffering from the devastating impact of isolation. “To think in her final year[s] when she is most vulnerable and most in need of love and support from her children and was denied this for 6 months is in my opinion devastating,” one caregiver said in a survey of 518 caregivers, the vast majority of them women and mainly daughters…

In 1983, Congress introduced gradual increases in the eligibility age for full Social Security benefits from 65 to 67. The increases, starting in 2000 and continuing today, have meant larger reductions in the monthly checks for people who sign up for their benefits early. This was a major cut to Social Security benefits, and it has had an impact. Retirement rates have declined among workers in their early 60s as they delayed retirement to make up for the larger penalties for claiming their benefits early, a new study found. Estimating the effect of this change on retirements is challenging, so the researchers compared actual retirement rates after the reform with their estimates of what the rates would’ve been if Congress…

Each new reminder in the annual Trustees’ Report that Social Security’s trust fund will be depleted sometime in the 2030s causes a new round of angst. Some 40 percent of the workers in one poll expect to receive nothing from Social Security when they retire. The media often play into this sense of unease with sensational headlines like “Social Security and Medicare Funds Face Insolvency” (The New York Times) or “Trust Fund to Run Dry in 2035” (Fox Business). While these headlines do their job of attracting readers’ attention, they don’t reflect the fact that the payroll taxes paid by employers and employees will keep rolling in. If policymakers take no steps to prevent the depletion, the tax revenues w…

The urgency of the pandemic ushered in important changes to the Affordable Care Act (ACA), including a steep reduction in premiums for health insurance policies purchased on the state and federal exchanges through the end of 2022. Now Congress is debating reforms such as making the larger premium subsidies permanent and broadening the reach of the federal-state Medicaid program beyond the expansion introduced in the 2010 ACA. We spoke with Tyson Lester, an independent insurance agent in southern California, about what the changes so far have meant for consumers. Tyson is licensed to sell policies in California, Florida, and Texas. Tyson Lester Has the Affordable Care Act promoted disease prevention and care during the pandemic? Some of the best feedback…

U.S. retirement preparedness can best be described as mediocre: about half of workers are not saving enough money to continue their current standard of living once they retire. Judging by a dozen blogs that attracted the most web traffic in the third quarter, our readers understand the importance of the issue. Some felt strongly that workers need to take responsibility for their retirement finances. Workers “disregard the notion of saving for the future,” one reader said in a comment posted to “Onus of Retirement Planning is on Us.” “They have lived their lives like there is no tomorrow and spend money on any and everything they want.” To boost savings, growing numbers of state officials and employers are taking charg…