Squared Away Blog

Taking out a high-cost payday loan is an act of desperation, and people on federal disability are some of the biggest users. Nearly 6 percent of households under 66 and on disability use payday loans, compared with 4 percent of the general population, according to Haydar Kurban at Howard University, who did the analysis for the Retirement and Disability Research Consortium. The financial vulnerability of disability recipients was starkest in the months after the 2008-2009 recession, when their use of payday loans spiked to 22 percent. The rate of borrowing also rose at the time for the general population but by much less. Disability benefits under the federal Supplemental Security Income (SSI) program average about $900 a month. To ek…

I appreciate how privileged my husband and I are that we are able to remain in our home, where we feel fairly safe. He is a retired Boston high school teacher. I have a good job that also provides me with some degree of flexibility when needed, and my boss didn’t resist, because of my autoimmune condition, when I asked to work at home early last week. A young couple in my condo building with a new baby fled last weekend to a relative’s house in rural Connecticut, where the husband will be able to telecommute to his high-paying job in Boston. Yes, our 401(k)s are getting pummeled. But this national crisis is immediate and far more consequential for t…

Photo by T. Charles Erickson How fitting that I would see the play “Sweat” on Feb. 28 – a Friday night at the end of a week in which the stock market dropped 12 percent and the specter of recession reared its ugly head. The Pulitzer Prize-winning “Sweat” – I saw the Boston revival – is about the havoc the boom-bust economy and falling financial markets wreak on working people’s employment security and their personal lives. In fact, the timeline of the play is bracketed by 2000, when the stock market crashed, and 2008, when it crashed again. At the beginning of each scene, a voice-over broadcasts the day’s bad financial news. The stock market never crosses the lips of…

The growing list of effective medications available for managing a variety of chronic conditions seem to be changing the way we work and retire. For example, older workers at one company who suffer from arthritis and high blood pressure – two relatively easy conditions to treat – are able to keep working just like their healthier co-workers, according to a new study from a research consortium funded by the U.S. Social Security Administration. In fact, the two specific groups in this study – employees with hypertension or a combination of arthritis and hypertension – actually worked an average of four to 10 months longer, respectively, than the healthy workers. This counterintuitive finding might owe to the fact that people wit…

A decade after the passage of the Affordable Care Act, about one out of every five Texans under age 65 still do not have health insurance. Georgia, Oklahoma and Florida are close behind. The contrast with Hawaii, Minnesota, Michigan, and New Hampshire is stark – only about one in 20 of their residents lacked insurance in 2018, the most recent year of available data, according to the Kaiser Family Foundation’s annual roundup of insurance coverage in the 50 states. Despite this glaring disparity, the share of Americans lacking coverage has dropped dramatically across the board, including in Texas. Texas’ uninsured rate fell from 26 percent in 2010 to 18 percent in 2018. This translates to 2.3 million more people wit…

Baby boomers have a lot more debt than their parents did. By all accounts, the parents were in pretty good shape for retirement because they held their debt levels down to a mere 4 percent of their total assets in the years immediately before retiring – ages 56 to 61 – according to a new study. At those same ages, the typical baby boomers’ debt has ranged from 19 percent to 23 percent of their assets, thanks in large part to the 2008 drop in stock portfolios and in the housing market. Generational trends in debt levels are difficult to analyze, and the issue is far from settled among researchers. This study notes, for example, that the situation might not…

Most baby boomers find the first weeks of retirement liberating. But it takes some work to ensure the feeling lasts. “Almost everyone is just thrilled with the first days of retirement, and the big thing is: ‘I do not have to set my alarm,’ ” said Harvard Business School professor Teresa Amabile. Eventually, another thought dawns on a new retiree: “I don’t want to turn into one of those people who sits around in their jammies half the day. I need more of a routine.” That’s when they start investigating what they’ll do with their time, said Amabile, who, with a team of researchers, interviewed 83 older professionals during their pre- or post-retirement years (or both) to understand the transformation…

Wouldn’t it be nice to find some money sitting in a long-forgotten retirement account somewhere? It’s not hard for workers to lose track of an old account as they move from employer to employer, often across state lines. Each state government keeps a repository of unclaimed property – most have been doing this since the 1980s – and residents and former residents can check online through a simple name search in the state’s unclaimed-accounts database. But not everyone takes the trouble to search for the money or is even aware it exists. So billions of dollars have accumulated nationwide in various types of unclaimed accounts, including retirement plans, insurance policies, trusts, and brokerage and bank accounts – so much so…

One might say that baby boomers on the cusp of retiring come in two varieties. Some cannot wait to retire and already have a plan. For others, the unknowns fill them with dread. How will I occupy my days? Should I do something meaningful, or is the goal just to have fun? And how do I figure this out? At 62, this writer really has no idea. For the other boomers who are feeling this way, take some comfort in knowing you are in good company. “I can’t say this strongly enough. There are some people who seem to literally not think about what their retirement might look like before they retire,” says Harvard Business School professor Teresa Amabile, whos…

Timing is everything for low-income people who rely on federal benefits to survive. For example, retirees who receive their Social Security checks early in the month and spend the money before the bills come in are more prone to fill the gap with high-cost payday loans than people who get their checks a few weeks later, a 2018 study found. New research in a similar vein shows that timing also matters for individuals who receive food aid under the federal Supplemental Nutrition Assistance Program, or SNAP. When the electricity bill arrives on or within a day of the monthly SNAP benefit, the lowest-income customers in this study were much less likely to have a past due bill or to hav…

 Romance scammers follow a predictable script. Find a willing person on social media or a dating website. Use the information she’s posted online to befriend her and then win her affection. Ask her for a loan for an urgent matter and promise to pay it back. After the money is wired, ply the victim for more money while promising to meet in person – a plan that never seems to pan out. Despite the flashing red lights that say “fraud,” romance scams are becoming increasingly profitable. Last year, its victims were cheated out of more than $200 million. This is a 40 percent increase over 2018 and exceeds the losses for any other type of scam, according to the Federal Trade Commission. Middle-aged…

Retirees are apparently unpersuaded that it’s a good idea to convert their substantial home equity into some retirement income. One way to tap this home equity is through state programs that defer older homeowners’ property taxes. The programs are offered in many states, but very few people take advantage of them. Retirees are also skeptical about the benefits of converting their equity into income using a federally insured reverse mortgage: only about 50,000 older homeowners, on average, get them every year. A big concern is that if they ever sell the house, the back taxes or the reverse mortgage must be paid back – with interest. But a new study by the Center for Retirement Research finds that this is…