Squared Away Blog

The majority of Americans who have health insurance – some 150 million workers – get their coverage through their employers. But this network has suddenly developed a big hole in the midst of a pandemic. The economic shutdown that is suppressing the coronavirus has thrown nearly 30 million people out of work – and taken away their health insurance. Millions more are expected to be laid off. About 10 percent of the U.S. population did not have health insurance in 2018, Kaiser’s most recent estimate. This share will certainly increase sharply, but how high it goes and how quickly the situation will improve is hard to predict, given all the uncertainties, said Jennifer Tolbert, director of state health reform for…

Resourceful retirees usually weather the financial surprises that come their way. But a handful of unexpected health events can really hurt. The death of a spouse is at the top of the list. Net worth drops by more than $30,000 over a couple of years as retirees pay for the extraordinary medical and other expenses surrounding a spouse’s death. Two serious health conditions also deplete retirees’ assets: strokes and lung disease, which strike about one in five older Americans during their lifetimes, according to a National Bureau of Economic Research study funded by the U.S. Social Security Administration that tracked changes in the finances of people 65 and over. Despite the presence of Medicare, a first-time stroke reduces a retired…

Do online financial companies give minorities a fair shake? Researchers and consumers have found some early evidence that this fast-growing segment of the financial industry – Fintech – may be mitigating, though not eliminating, the legacy of discrimination that has been widely documented in the brick-and-mortar mortgage industry. First came bank redlining, a conceptual line lenders drew around black neighborhoods. In a famous study, banks rejected black loan applicants more often than white borrowers with the same incomes. Lenders have also been found to discriminate by charging black borrowers higher interest rates for their mortgages. Discrimination took a different form when subprime lending invaded the mortgage market prior to the 2008 financial collapse. Commissions to subprime loan brokers gave them…

A growing number of Americans can’t pay their rent, and the queues forming outside food banks hint at human need on the scale of the Depression. For Americans who were already living paycheck to paycheck prior to the pandemic, the $1,200 relief checks the government has deposited into their bank accounts are too little and came too late. Few are being spared the financial fallout from the COVID-19 economic contraction. But economists predict the damage being done to working and middle class people will cause another surge in U.S. inequality, just as the previous recession did. The big unknown is whether this downturn, which is unfolding more violently than the previous one, will do even more damage to livelihoods and…

Workers of all ages are being affected by the damage COVID-19 is doing to the economy, but people who are loosely attached to the labor force may be more vulnerable. That’s the situation for a small but growing segment of the U.S. labor market: self-employed people who are 65 and older. When workers are in their prime, most of them are directly on an employer’s payroll. But a new study finds that self-employment begins to dominate as people work past traditional retirement ages and work as independent contractors, consultants, freelancers, or gig workers. The detailed Gallup survey designed by the researchers shows that self-employment is more pervasive at older ages than previous data had indicated. Nearly half of all workers…

In a 401(k) world, purchasing an annuity is one way to turn retirement savings into a reliable source of income. But annuities have never been popular. Now, a new study finds they are losing appeal even among some employees who historically purchased annuities at much higher rates than the general public: members of the TIAA retirement savings plan – one of the nation’s largest. Until 1989, TIAA required that retirees convert their savings into annuities. Even in 2000, one out of two participants putting money in TIAA would eventually take their first withdrawal in the form of one of the annuity options the plan offers to retirees. But by 2017, this number had dropped to about one in five, according…

To conserve cash, some employers are suspending contributions to their workers’ 401(k)s. And if this downturn plays out like previous recessions, more will follow. The handful of employers announcing suspensions in recent weeks include travel companies and retailers hit first and hardest by shrinking consumer demand, including Amtrak, Marriott Vacations Worldwide, the travel company Sabre, Macy’s, Bassett Furniture Industries, Haverty Furniture Companies, and La-Z-Boy. Tenet Healthcare and a physician practice in Boston on the front lines of providing expensive coronavirus care have also suspended their matches. Employees, not surprisingly, are unhappy with these moves. An emergency room doctor told The Boston Globe that his organization’s decision comes as he is “working huge extra hours trying to scrape together [personal protectiv…

Baby boomers aren’t as healthy as their parents were at the same age. This sobering finding comes out of a RAND study that took a series of snapshots over a 24-year period of the health status of Americans when they were between the ages of 54 and 60. The researchers found that overall health has deteriorated in this age group, and they identified the specific conditions that are getting worse, including diabetes, pain levels, and difficulty performing routine daily activities. Obesity is an overarching problem: the share of people in this age group with class II obesity, which puts them at very high risk of diabetes, tripled to 15 percent between 1992 and 2016. In addition to declining health, t…

People born smack in the middle of the baby boom wave, including many of this blog’s readers, are now in their mid-60s and have retired – or, at least, they were planning to retire before the stock market crashed. Some of your favorite articles in the first quarter, based on the blog’s traffic, were about the nuts-and-bolts of retirement, including one that ranked retiree living standards by state. The 10 most popular blogs listed below ran before the coronavirus changed our lives but they may still hold kernels of wisdom that will be useful in these trying times. For example, one article reported on the $38 million in misplaced retirement funds from prior employers. If you think you have a…

For baby boomers who thought they were on the path to retirement, the road is shifting beneath their feet. Danielle Harrison, a financial planner in Columbia, Missouri, sees a raft of problems stemming from the COVID-19-induced economic slowdown. Many older workers getting close to retirement age are taking big hits to nest eggs that were already too small. Some boomers who lacked pensions and were behind on saving tried in recent years to make up for lost time with a riskier portfolio in the rising stock market – now they’re experiencing the downside of that risk. Others are scrambling to pay expenses or maintain debt payments as their income drops, altering their financial security now and changing their calculations for…

It’s easy to overlook the emotions that swirl around money. But they often come to the surface when our financial security is thrown into question. The spread of the coronavirus has kicked Americans’ financial anxieties into high gear, a Kaiser Family Foundation poll found last week. More than half of the workers who were surveyed fear they will lose income when their workplace is closed or their hours are reduced. Reduced income is hitting low-wage, part-time and hourly workers hardest and fastest. But even among people with more financial resources, more than half are concerned they’ll have to dip into retirement savings or college funds. Even when financial problems stem from events that are outside of an individual’s control, a…

A majority of adults believe there’s better than a 50-50 chance they will still be working full-time after age 65, a new study found. The evidence suggests this goal is fairly realistic. In the study, adults ranging in age from 18 to 70 were asked to rate themselves on a 1-to-7 scale for 52 different cognitive, physical, psychomotor, and sensory abilities that determine their capacity to work. These abilities run the gamut from written comprehension, pattern recognition, and originality to finger dexterity, reaction time, and vision acuity. Of course, physical abilities decline with age. But when the researchers compared older and younger participants in the study, they found that many self-assessments of their abilities were very similar. For example, psychomotor…