Squared Away Blog

It’s the employer’s responsibility to find former employees and keep them apprised of any retirement benefits they left behind. But that hasn’t always worked out. Some employers don’t have former workers’ current contact information, and others don’t bother to track them down. Worst-case scenarios are often fallout from a merger: the company being acquired has kept shoddy pension plan records and the acquirer doesn’t update them.  Some companies have even deleted a participant’s name from the records. Tyler Compton, an attorney with the Pension Action Center, which connects workers with lost pensions and 401(k) savings plans, said people frequently contact a former employer because they think they might have a plan. But if the worker is told he’s not in…

The rise in opioid addiction has created an epidemic of drug overdose deaths in the United States. But what increases the risk that people develop the disorder in the first place? Automation of the U.S. economy turns out to be a contributing factor, as workers lose good jobs to industrial robots and despair about being disengaged from the labor force, conclude researchers at the University of Pennsylvania and Yale in a study funded by the U.S. Social Security Administration. Manufacturing jobs, often in unionized industries, used to be a major route to the middle class. But millions of factory jobs disappeared as U.S. companies moved operations overseas. Compounding the job losses, corporate employers began installing robots in their remaining domestic…

Many workers in their 60s lose some of their stamina. Either their bodies start showing signs of wear, or they don’t tolerate on-the-job stress like they used to. People who find themselves in this situation but can’t afford to retire will appreciate the findings in a recent study: older workers who transition to a new job – and perhaps a less demanding one – have greatly improved their retirement finances, even if the new job lacks health and retirement benefits. The starting point for the analysis was to identify 61- and 62-year-olds employed in career jobs and follow the changes in their retirement finances over time, as they break into three groups. Some retired, some remained in longstanding jobs wit…

An impressive consensus has emerged around the benefits of working from home. More employers have come to accept the practice after being pleasantly surprised at how productive their employees are. If remote workers were once viewed as insufficiently committed to the company, they no longer feel as marginalized. And people seem to like it – with the notable exception of the mothers juggling Zoom meetings and childcare. An NBER study out this month estimates that about 20 percent of the workdays in this country, post-pandemic, will be carried out at home. That’s less than half the at-home time that was clocked last year as the pandemic raged but is multiples of the very low levels prior to COVID-19. There is…

Every year, older homeowners leave billions of dollars worth of the wealth locked up in their houses to their adult children. This is a paradox if one considers that home equity is one of retirees’ primary assets and could be a crucial source of income for people who are “house rich and income poor.” Retirement experts searching for an explanation have long wondered whether the deceased had intended to leave the house to family or simply died before they were able to cash in on the equity and spend it. A new study has an answer: retirees have every intention of letting family members inherit their homes. The people in the study who expressed a stronger desire to leave an…

It’s still too early to assess the full impact of the COVID-19 downturn on Millennials’ economic fortunes. But Black Millennials had already lost a lot of ground before the pandemic hit their communities hard. Their wealth in 2019 was just half of what would be expected based on how much wealth their parents’ generation had at the same age. Other Millennials are also running behind previous generations, but only slightly. And their situations have improved in recent years, while Black Millennials are sliding farther and farther behind. The Federal Reserve Bank of St. Louis called the situation “alarming” in its new report. The oldest Millennials are turning 41 this year. But in 2019, the typical Black family born in t…

An unfortunate misperception about people on federal disability is that they’re not interested in working. In fact, nearly half of them want to work or expect to go back to work, and that share has been rising. But getting or keeping a job has proved difficult, and the employment rate is very low for people who get Social Security disability benefits – or cash assistance from a companion program, Supplemental Security Income (SSI). Yet the vast majority of beneficiaries have past work experience that should help them in the job market. Researchers at Mathematica mined a survey of people on disability for clues about how to help them find a job or promotion or learn a new skill. Many of…

One telling indication that retirees are in serious financial straits is when they take less of their medications or don’t fill prescriptions. Nearly one in four low-income retirees has difficulty paying for medications, despite passage of Medicare Part D in 2006, which reduced out-of-pocket drug costs. Between 2011 and 2015, the average Medicare beneficiary spent $620 to $700 a year on prescriptions, and people with diabetes, lung disease, and cardiovascular disease spent more than $1,000 a year. One way retirees can address such hardships would be to tap some of the equity in their homes. Although a homeowner probably wouldn’t use this strategy just to cover drug copayments, new research finds that older Americans who tap equity significantly increase their…

Financial advisers have no shortage of clever strategies to dispense to their clients. The tricky part is getting the psychology right. Human beings have all kinds of hang-ups about money. Presumably, someone who’s walked into a financial adviser’s office has broken through the first barrier to getting help: denial. But even then, blind spots and fears can get in the way of a client choosing or executing a financial plan, even if it’s clearly beneficial. To that end, psychology is being added to the educational curriculum – along with the longstanding topics like risk management, tax planning, and investing – required for advisers to get certification as a Certified Financial Planner, or CFP.  Money “is a very emotional topic,” said…

As technology transforms the work world, jobs that were once routine might now require good interpersonal skills or the ability to quickly adjust to the situation at hand. The people bearing the brunt of these challenges are the same people who were already at a disadvantage in the labor force: workers who never attended college. New research on more than 700 occupations found that the types of jobs held by workers with only a high school education have become more difficult in recent years, which has sharply limited their job opportunities. The opposite is true for college graduates, whose jobs have gotten easier, opening up new opportunities for them. “The changing nature of work over the past 15 years may…

The housing market has shrugged off the pandemic, and home prices are rising sharply due to historically low interest rates. The market crash more than a decade ago is a distant memory. The total value of the equity in older Americans’ homes has doubled since 2010, hitting $8.05 trillion at the end of last year. The irony is that federally insured reverse mortgages, which allow a long-time homeowner to cash in on tens of thousands of dollars of equity, aren’t very popular. Last year, only 42,000 Home Equity Conversion Mortgages (HECMs) were sold – half as many as in 2010 – according to the U.S. Department of Housing and Urban Development (HUD). One reason HECM reverse mortgages haven’t caught on,…

The oldest minority retirees are struggling with debt, a new Urban Institute study finds. The researchers’ starting point is that people generally reduce their debt as they age. To prepare for retiring, older workers try to pay down their mortgage balances and pay off credit cards. Once retired, their debt continues to shrink. But on closer inspection, retirees in their 70s and 80s in the nation’s predominantly minority neighborhoods have shed less of their debt than their counterparts in mostly white neighborhoods, who tend to be better off financially. In a sign of financial distress among the oldest lower-income and minority retirees, 20 percent of their loans go to collections for non-payment – double the rate for higher-income and whit…