Video: Grandparents as Substitute Parents

In 2015, the journal Pediatrics estimated some 3 million children were living with grandparents – and the number is certainly higher today. Grandparents find themselves in a caregiving role in the aftermath of parents’ myriad personal traumas, including opioid addiction, suicide, incarceration, and now COVID-19. In this excellent PBS NewsHour video, “Grandfamilies,” grandparents tell journalist Stephanie Sy about the financial and emotional toll of caring for children. Despite the challenges, they wouldn’t have it any other way. But the financial strain is real. Some of the people Sy interviewed said their childcare duties have forced them to close businesses, and others are earning less due to the pandemic. Lisa Banks stretches herself thin helping each of her three grandchildren wit…

March 16, 2021

Retirement Ages Geared to Life Expectancy

For most of the 20th century, life expectancy was on the rise. Yet older Americans were retiring at younger and younger ages. That changed in the 1990s. Life expectancy continued to rise, but retirement ages started increasing too. Many significant developments are behind the dramatic shift in retirement habits, including the decline of private-sector pensions, changing attitudes about working women, and bigger financial incentives from Social Security for people who remain in the labor force in order to get a larger monthly check when they finally retire. Given all of these changes, Urban Institute researchers wondered whether the dramatic longevity gains experienced by the people who make it to their 50s and 60s could be counted as another reason for…

March 11, 2021

Will More Aid to Parents Be Permanent?

To lift families out of poverty during the pandemic, Congress is on the verge of passing a substantial increase this year in the standard child tax credit as part of President Biden’s broader relief package. But despite the sharp divide over the $1.9 trillion package, some senators – both Democrats and Republicans – want to permanently increase federal assistance to families. Their goals range from reducing racial inequality and rural poverty to providing more financial stability for middle- and working-class parents. The prospect of a bipartisan plan for increasing assistance to parents beyond this year is welcomed by advocates for the poor and lower-income workers. The proposals represent a belief “that all of society benefits when children are doing well,”…

March 9, 2021

Federal Minimum Wage is 40% Below 1968

Largely missing from the debate about raising the federal minimum wage is how much its value has eroded over the past 50 years. The current federal minimum is $7.25 an hour. If the 1968 wage were converted to today’s dollars, it would be worth about $12 an hour. At $7.25 an hour, a full-time worker earns just over $15,000 a year before taxes, which is less than the federal poverty standard for a family of two. The Biden administration has proposed more than doubling the federal minimum to $15 by 2025, and one proposal in Congress would begin indexing the minimum wage to general wages so it keeps up with inflation. A $15 an hour minimum isn’t enough, said on…

March 4, 2021

Who Applies for Disability – and Who Gets it

Blue-collar workers who end up applying for federal disability benefits find themselves in that position for a variety of interrelated reasons. A dangerous or physically demanding job can either cause an injury or exacerbate a medical condition that could lead to a disability. And people with limited resources in childhood often develop health problems earlier in life, and their circumstances can limit their access to job opportunities, making them more likely to end up in dangerous or physically demanding jobs. A new NBER study untangles all these factors to clarify who applies for disability and which applicants ultimately receive benefits through Social Security’s rigorous approval process. Researchers at Stanford and the University of Wisconsin linked a survey of Americans 50…

March 2, 2021

Diverse Population Uses Nursing Homes Less

Since the 1980s, the share of the U.S. population over 65 has grown steadily. At the same time, the share of low-income older people living in nursing homes has declined sharply. New research by the University of Wisconsin’s Mary Hamman finds that this trend is, to some extent, being driven by an increasingly diverse population of Hispanic, Black, Asian, and Native Americans. They are more likely to live with an adult child or other caregiver than non-Hispanic whites, due, in some cases, to cultural preferences for multigenerational households. Nursing home residence is also declining among older white Americans. However, in contrast to the Black population, whites are increasingly moving into assisted living facilities. This creates what Hamman calls a “potentially…

February 25, 2021

Converting a Desire to Save into Saving

   Save. Budget. Spend less on takeout. “We know what we need to do,” financial behavior expert Wendy De La Rosa says. “The question is how to do it.” Consider one of the pandemic’s lessons for workers: it’s important to build up an emergency fund for a potential financial catastrophe. But how to translate that into action? De La Rosa, who founded the Common Cents Lab to help low-income workers manage their limited resources, has conducted research showing that people can overcome the psychological barriers to saving by changing the financial cues around them. In this Ted video, she provides three practical tips, one of which she applied to her own life. After spending $2,000 in a single mont…

February 23, 2021

Big Picture Helps with Retirement Finances

The prospect of retiring opens a Pandora’s box of questions. But one big question dominates all the others: How will I manage my finances when I retire? This is a vexing problem, and baby boomers could use some help thinking it through. To ease the process, a team at UCLA and Cornell University led by David Zimmerman, a UCLA doctoral student, created an online decision tool. In an experiment, they found that the tool might help future retirees understand how to smooth out their income over many years and make their savings last. The results are preliminary, and the researchers are refining their analysis. But for the initial experiment, they recruited 400 people, ages 40 through 63. The participants wer…

February 18, 2021

Where Will You Retire? This Might Help

The toughest part of Paul and Cathy Brustowicz’s decision to relocate from New Jersey to Summerville, South Carolina, was leaving behind their two grandchildren. The retirees also miss the theater and dinners in Manhattan. A big advantage of South Carolina, though, is “more house for the money,” Paul Brustowicz said. The couple also had a few old friends who were already living there, and the warm weather is nice, though it, too, involves a tradeoff: high summer humidity and hurricane season. As for amenities, it’s a quick drive to Charleston for dinner, the airport, and the Medical University of South Carolina. “Overall, it was the right move for us,” he said about the 2012 relocation. South Carolina ranked a very…

February 16, 2021

Billionaires Got Much Richer in Pandemic

In the COVID-19 downturn, this blog has had a steady supply of stories and statistics about the damage being done to low-income and middle-class families. That’s one perspective on the pandemic. The growing billionaire class is another one. Since last March, the nation’s 660 billionaires have added more than $1 trillion to their wealth – a 39 percent increase. Their combined net worth is now $4 trillion, which is nearly double the $2 trillion held by the 165 million Americans in the bottom half, according to the Institute for Policy Studies’ new report. “It’s a troubling sign that too much of society’s wealth and income is flowing upwards to that small group of people,” Chuck Collins of the Institute for…

February 11, 2021

Readers See Pros, Cons to Paid-off Mortgage

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…

February 9, 2021

CARES Act’s Loan Forbearance is Working

As the pandemic was sinking into our collective consciousness a year ago, Congress, fearing economic calamity, allowed Americans to temporarily halt their mortgage and student loan payments. By the end of October – seven months after President Trump signed the Coronavirus Aid, Relief, and Economic Security (CARES) Act – Americans had postponed some $43 billion in debt, including car loans and credit cards, which many lenders deferred voluntarily. Billions more are still being added to the total amount in forbearance. Fast action in Congress “resulted in substantial financial relief for households,” says a new study by researchers at some of the nation’s top business schools. Their recent analysis found that the assistance went where it was needed – to “financially…

February 4, 2021