Squared Away Blog

When David Marotta is investing his clients’ money in mutual funds, he scrutinizes the fees. To demonstrate why fees are so important, Marotta charted the fees and 10-year returns for dozens of index funds in the Standard & Poor’s 500 family. Since these funds all track the same index and their performance is roughly the same, the fees will largely determine how much of the return the investor keeps and how much goes to the mutual fund company. “The larger the fee the less that it performs. It’s kind of a straight line,” said the Charlottesville, Virginia investment manager. “Anytime we’re picking a fund” for a client, “we’re trying to find the lowest-cost fund that we can find in that…

Everyone knows about the dangers of opioid addiction. But prescription opioids can be useful to people with physical disabilities if they ease their pain so they can hold down a job. A new study finds that this might be occurring in certain parts of the country where more opioid prescriptions are written. But this finding is at odds with other evidence in the study that these same areas also see increased enrollment in Social Security’s disability program. A possible increase in employment is puzzling, since this program has strict limits on how much people can earn. Adibah Abdulhadi at the University of Wisconsin reconciled her seemingly contradictory findings this way: some people with disabilities, including some who rely on opioids,…

 After four or five decades of work, retirement is liberating! It’s gonna be great! Right? Well, not necessarily. It depends on how you retire. In this video, Ross Andel, director of the School of Aging Studies at the University of South Florida, warns that a risk to retiring is that it can “speed up the aging of our brain. It could make us slower and more forgetful.” His research demonstrates how work and retirement influence brain functioning. He tested the memories of people in their early 60s living in Canberra, Australia. Every four years, they were asked to remember as many random and unrelated words in a list as they could. Naturally, they couldn’t remember as many words at…

Due to the strength and agility required for physical labor, half of blue-collar workers sign up for Social Security as soon as they’re eligible – at age 62. But a large majority of white-collar workers wait so they can lock in a larger monthly check for retirement. In a new study, Lindsay Jacobs at the University of Wisconsin found that blue- and white-collar workers would also respond very differently to potential increases in the program’s two benchmark ages: the earliest eligibility age and the full retirement age. Raising the earliest eligibility age to 64 would not change retirees’ lifetime benefits. But a two-year hike in the full retirement age would amount to a significant benefit cut – and with t…

It’s often true that men in their 50s who’ve done physically demanding jobs for decades develop debilitating conditions. But they’re not old enough to retire and collect Social Security. Particularly during economic downturns, many of these workers have turned to a fallback option: federal disability benefits. While economic conditions and policy changes are primarily responsible for the year-to-year changes in applications for disability, there is growing evidence of worsening health and functioning among men in their 50s and 60s. A new study has found that these trends have also increased the number of older workers who may qualify for disability benefits. The researchers first confirmed past studies showing that this population’s health has gotten worse since the 1990s. More of…

This big number may surprise you: one out of every four adults feels they need some type of accommodation by an employer for a medical condition or disability. This finding comes from a study in the Journal of Policy Analysis and Management that established a very inclusive standard for determining the need for employer accommodations. The researchers concluded, after following individuals 18 and older in their study for four years, that their employment rate was higher when they received support. The Americans with Disabilities Act of 1990 requires employers to provide workers and job applicants with a “reasonable accommodation.” But disabling conditions aren’t always visible, and many people never ask employers for assistance. In addition, some employers – particularly sma…

The state of our retirement preparedness is captured in this fact: about half of U.S. private sector workers at any given time are not enrolled in an employer retirement plan. To be clear, they are not currently enrolled. Some of them have participated in a plan in the past or will in the future. But this inconsistency is the problem, largely because so many employers still don’t offer 401(k) savings plans to their employees. The financial toll of not saving consistently is modest retirement account balances. Yet saving has become increasingly urgent as traditional pensions have virtually disappeared from the private sector and Social Security is replacing less of workers’ incomes over time. In 2019 – after several years of…

The federal government warns that older Americans are being targeted by a battery of financial scams, including telemarketers offering to do contact tracing – for a fee – or to reserve a slot for a future vaccine. Others are soliciting donations to charities purportedly helping people in need during the economic slowdown. COVID-19 makes this a perilous time for people struggling with cognitive decline. Few can escape a deterioration in their cognitive capacity as they age. It’s just a matter of degree and speed. But the faster it happens, the more damage it can do, the FINRA Investor Education Foundation concluded in a new study. The study was based on surveys of more than 1,000 older residents in Chicago retirement communities…

Working mothers scrambled when the schools shut their doors last spring, but they found ways to cope. The 2020-21 school year may push many of them over the edge. Last spring, one in four women nationwide who’d either quit their jobs or were laid off blamed the difficulties of working after the schools closed or they lost child care to COVID-19, a Northeastern survey found. Alicia Sasser Modestino is in the midst of repeating the survey but believes that the situation has only gotten harder for working mothers this fall. “When you look down the barrel of a full school year of hybrid or remote learning,” the stopgap measures mothers deployed last spring “are not sustainable,” said Modestino, a mother…

Self-employed workers who are 50 and older fall into a hierarchy of sorts, a new study finds. The largest group is the 75 percent who work independently in jobs like freelancer and gig worker. Their average earnings are low – $18,000 a year – and they are more likely to be women or Hispanics. The other 25 percent of the self-employed older workers are primarily white men and are evenly divided between business owners and managers who work on a contract basis. These individuals tend to be doctors, lawyers, or executives in industries ranging from finance and construction to retail. To get a better handle on who is choosing self-employment and why, University of Michigan researcher Joelle Abramowitz analyzed 2016…

The COVID-19 recession demonstrates an axiom of economics. Black unemployment always exceeds the rate for whites, the spikes are higher in recessions, and, in a recovery, employment recovers more slowly. A record number of Black Americans were employed in 2019. But when the economy seized up in the spring, their unemployment rate soared to 17 percent, before floating down to a still-high 12.1 percent in September.  Meanwhile, the white unemployment rate dropped in half, to 7 percent. The much higher peaks in the unemployment rate for Blacks than whites and the slower recovery are baked into the economy. This phenomenon occurred during the “jobless recovery” from the 2001 downturn. When the economy had finally restored all of the jobs lost…

Sales and rentals of recreational vehicles have skyrocketed during the pandemic as people working remotely use their newfound freedom to move their workplaces to the great outdoors. Outdoorsy – the Airbnb of recreational vehicles (RVs) – reports that 40 percent of its new rental customers are under age 40. But long before younger adults hit the road, thousands of baby boomers were buying RVs to roam the country in search of work. Rather than seeking psychological relief from COVID, as younger workers are doing, the boomers – some retired and some unemployed – are looking for financial security. In this excellent PBS NewsHour segment, Paul Solman talked to boomers who park their RVs at campsites near whatever seasonal jobs they…