Squared Away Blog

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…

Hearing loss can amplify cognitive decline by isolating retirees and forcing them to divert precious brain power to participate in a conversation. People who lose teeth have trouble eating, sacrificing their health. And poor vision, uncorrected by cataract surgery or the proper magnification in eyeglasses, is dangerous when driving at night. These problems are facts of aging. But Medicare doesn’t cover their often-expensive solutions such as hearing aids, dental implants, or eyeglasses. A report by the Kaiser Family Foundation identified a gap between need and access is wide. Among the 16 percent of Americans over 65 who said in a survey that they couldn’t get hearing, dental or vision services, nearly three out of four couldn’t afford them. Three charts, based…

The option to start Social Security benefits at any age from 62 to 70 – with an actuarial adjustment – is a key feature of the program. However, the adjustments – reductions in the monthly benefit for claiming early and increases for waiting – are decades old and do not reflect improvements in longevity or other important developments over time. The option to claim early was introduced just over 60 years ago, when Congress set 62 as the program’s earliest eligibility age. The option to claim between 65 and 70 on an actuarially fair basis stems from the 1983 Social Security amendments, which gradually increased the annual “delayed retirement credit” from 3 percent to 8 percent. Also in 1983, reductions…

A Jewish child rides the Kindertransport out of Nazi-controlled Austria to safety in England, eventually coming to the United States. A Japanese-American mother is confined to an internment camp. A child of Mexican farm workers in California goes to bed hungry. A young African-American organizes sit-ins for Civil Rights. Taken together, the early life stories shared by the individuals in a new PBS feature, “Lives Well Lived,” are a compendium of U.S. history. The trailer that appears above can’t do justice to the full video, which can be viewed free of charge on the PBS website until Sept. 29. Despite their trials, these individuals have embraced life with a zeal and perseverance that are surely part of the secret to…

Nothing causes dread in a retiree quite like the prospect of having to go into a nursing home someday or becoming dependent on someone who comes into the house to help with routine daily needs. But media reports or studies with alarming predictions of infirmity in old age are not very useful to retirees or their family members. A new study provides a more nuanced picture of the various scenarios that can play out. Researchers at the Center for Retirement Research estimated that roughly one in five 65-year-olds will die without using any care, and another one in five will need only minimal care. But one in four will have such severe needs that they will require high intensity support…

 The PBS NewsHour has some terrific reporting on an important topic: the job market for the two-thirds of working-age adults who don’t have a college degree. The problem facing many of them is that, despite their hard work, they will earn much less over their lifetimes than college graduates. In stories for the NewsHour, Paul Solman highlights the opportunities available to workers without degrees at a time that many employers are scrambling to find smart, energetic people to fill good-paying jobs with benefits in light manufacturing and the skilled trades. Women of color are catching on and entering fields like carpentry and plumbing – in fact, they are over-represented in the trades. But Solman talked to employers early this…

Many employees in the private sector, when left to their own devices, either save very little in the company retirement savings plan or don’t even sign up for it. But a growing number of companies have revamped their 401(k)-style plans over the past two decades to strengthen the incentives for employees to save. While progress has been gradual and uneven, the companies are moving in the right direction. In a new study, researchers have compiled a unique nationally representative data set that tracks the changes employers have made to their 401(k)s and 403(b)s. The findings describe three important areas in which they are making progress: About 41 percent of the largest 4,200 U.S. employers in this study automatically enrolled workers…

In the second half of 2020, the number of retired homeowners who fell behind on their mortgage payments doubled to about 1 million per month. By July of this year, it had dropped to 680,000 retirees. The federal Consumer Financial Protection Bureau (CFPB), which issued the report on homeowners over age 65, said about 12 percent of this population is vulnerable to imminent foreclosure and possibly homelessness. Some of the people who are having the hardest time paying their loans either have disabilities or are over 75. But most the retirees in the CFPB report are largely reliant on Social Security, so their income is stable. To understand why they’re having problems paying the mortgage requires reading the tea leaves…

President Biden has said he wants to increase the benefits in a federal program for low-income children and adults with disabilities. But a long-running debate about the program is whether the direct cash assistance helps children when they grow up. The Supplemental Security Income program, or SSI, clearly has immediate benefits. SSI provides nearly $800 in monthly cash payments and Medicaid health insurance to help parents care for their children and teenagers and manage their physical, cognitive, or behavioral disabilities. However, policy experts disagree on the program’s long-term effects. Critics say it creates a negative dynamic if it causes poor parents, consciously or unconsciously, to lower their expectations for a child in order to preserve the payments. If the child…