Squared Away Blog

The COVID-19 recession is unlike anything this country has seen. If the second-quarter contraction were to continue at the same pace for a full year, the economy would shrink by a third! This is the deepest downturn since the Great Depression, and low-income Americans are feeling the brunt of it. What makes this recession unique, however, is that the low-income people living in the most affluent metropolitan areas are worse off than low-income residents of less affluent cities, Harvard economist Raj Chetty explained during a recent interview on Boston’s public radio station, WBUR. “What’s going on is that affluent folks have the capacity to self-isolate, to work remotely, to not go on vacation,” he said. “So in affluent areas, you…

Although COVID-19 has exposed alarming gaps in a health insurance system that revolves around the employer, the Affordable Care Act is one potential solution for workers who lack the employer coverage. There is nothing equivalent on the retirement side, however. Many workers between ages 50 and 64 are in jobs that provide neither health insurance nor a retirement savings plan. But, in contrast to the health insurance options available to them, “no retirement sav­ing vehicle appears effective in helping older workers in nontraditional jobs set aside money for retirement,” concluded a new analysis of workers in these nontraditional jobs. Nontraditional workers who want to save for retirement are left with two options: their spouse’s 401(k) savings plan or an IRA…

The X-rays look very similar for two 60-year-old women with arthritic knees. But the less-educated woman has more severe pain than the person who graduated college. A new study of men and women finds that the degree of knee-joint deterioration visible in an X-ray isn’t the primary reason one person experiences more knee pain than someone else. Instead, the overwhelming reason is knee strain caused by obesity and the toll taken by physically demanding jobs – both of which are more common among less-educated workers. The researchers focused on knee arthritis, because musculoskeletal pain is one of the leading causes of Social Security benefit payments to people who develop a disability and can no longer work. Understanding what’s behind t…

About one in four state and local government employees – some 6.5 million people – do not participate in the Social Security system. They get their disability insurance, as well as their pensions, from their employers. Whether the coverage is more or less generous than Social Security disability depends on the individual worker’s circumstance and how the state or local employer calculates benefits. But a new study concludes that public-sector workers who have a disability generally receive benefits that are at least as generous as the federal benefits. To compare them, researchers at the Center for Retirement Research had to construct a database with each state’s and locality’s eligibility requirements and benefit payments. The sample consisted of 67 different disability…

Watch these six videos and walk in the shoes of low-income older Americans. It’s an arduous journey. Social Security is the primary or only source of income for the retirees who agreed to be interviewed for the videos. Since their income doesn’t cover their expenses, they live with family, frequent the Salvation Army, and continually stress about money. “You’re lucky if you come out even or a little behind” at the end of the month, said Howard Sockel. The 81-year-old resident of Skokie, Illinois, supports two sons – one with autism and one unemployed – on his Social Security, a small Post Office pension, and credit cards. The older workers who were interviewed are on the same road to a…

When COVID-19 throws people out of work, their chances of retiring comfortably can deteriorate rapidly. What better time to find a new way to help? A perennial proposal just reintroduced in Congress would do some good: establish an online database of employer retirement plans so workers and retirees can locate old pensions and 401(k) accounts. Workers are increasingly responsible for making sure they have enough money to retire. But moving from job to job is now the norm – the one-employer career is a distant memory – and pensions get left behind and 401(k)s fall by the wayside. People who try to find old plans often can’t locate employers that have changed names, merged, relocated, or terminated a plan. T…

Like much in life under a pandemic, the research presentations for the Retirement and Disability Research Consortium’s annual meeting are going virtual. This year’s online meeting will also be scaled down from the traditional two days to one: Thursday, Aug. 6. The purpose of the meeting, which is usually held in Washington, D.C., is for academics from universities and think tanks to describe their latest research to colleagues, policy experts, financial professionals, and the press. Topics this year will include taxes in retirement, federal disability insurance, housing, health, and labor markets. The U.S. Social Security Administration has funded the research and is sponsoring the meeting. The agenda and information about registration are available online, and participants can register anytime. Questions…

People with intellectual disabilities, autism, or schizophrenia have high rates of unemployment. But a new study finds that some can find part-time or even full-time jobs with the help of coaches funded by the government. Having a coach doesn’t guarantee that a person with a disability will get a job. But in a 2019 study, the people who received this support “were significantly more likely to become employed” than those who did not get the help, according to researchers for the Retirement and Disability Research Consortium. To get and keep these jobs requires a lot of personal attention. The federal-state Vocational Rehabilitation program provides coaches – often at non-profits – who find the right jobs for their clients and then…

Americans’ retirement outlook has gone from bleak to bleaker. The unemployment caused by COVID-19 has pushed up the share of working-age households not able to afford their current standard of living in retirement from 50 percent to 55 percent, according to a new analysis by the Center for Retirement Research, which sponsors this blog. The analysis updates a previous estimate, based on 2016 data, to include the harmful effects of surging unemployment. The researchers estimate that perhaps 30 percent of workers – far more than is reflected in the monthly jobless rate – could be affected by layoffs now and in the future. They did not factor in the recession’s impact on the housing and financial markets, which could mak…

The Black Lives Matter protesters have brought renewed attention to the enduring economic inequality that separates Black and white America. Homeownership is at the heart of this disparity. For many Americans, their largest source of wealth is the value they have built up in their homes over time. The house is also traditionally the primary way for moderate- and middle-income parents to pass wealth on to their children. But less than half of African-Americans own homes, and the ones who do have a fraction of the equity whites have due in large part to the nation’s long history of segregated housing, economists say. Further, the tidal wave of foreclosures a decade ago reduced the already low homeownership in minority communities,…

During the steel and coal busts of the 1980s, applications for federal disability benefits rose in areas where these industries had laid off workers. Now there’s a 21st century reason to apply: student loans. College debt is extremely difficult to discharge in the bankruptcy courts. But the U.S. Department of Education in 2013 opened a new avenue for potentially eliminating federal student loan debt. Former college students whose disabilities are severe enough to qualify them for disability benefits can then apply to the Department of Education for loan forgiveness. Since 2015, the typical person approved for the program has eliminated $17,500 in college loans. The prospect of discharging the onerous debt created a powerful financial incentive. After the program began,…

 The unemployment rate has rocketed to double digits. But older workers’ struggles in the job market are not new. An Urban Institute study, reported here, estimated that about half of workers over age 50 left a job involuntarily at some point between 1992 and 2016 – a period that included strong economic growth and two recessions. After the workers found new employment, their households were earning just over half of what they earned in their previous jobs, researcher Richard Johnson told PBS’ NewsHour. The baby boomers being laid off now might relate to Jaye Crist, who was featured in this NewsHour video last February when unemployment was still at record lows. He had been a manager at a nationa…