Squared Away Blog

One thing bankruptcy won’t fix is college debt, which – in contrast to credit cards – can’t usually be discharged by the courts. One in three low-income people who have filed for bankruptcy protection from their creditors have student loans and face this predicament, according to LendEdu, a financial website. The debt relief they can get from the courts is very limited, because the aggregate value of their non-dischargeable college loans is almost equal in value to all of their other debts combined, including credit cards, medical bills, and car loans. Under these circumstances, a bankruptcy filing “does not sound like a financial restart,” said Mike Brown, a LendEdu blogger. Although LendEdu analyzed data for low-income bankruptcy filers, the court’s…

The poverty rate for widows has gone down over the past 20 years. This trend will probably continue for the foreseeable future. Women face the risk of slipping into poverty when a husband’s death triggers a drop in retirement income from Social Security and a pension (if he had one). But beginning in the 1970s and 1980s, women moved into the nation’s workplaces at an unprecedented pace. Women now make up nearly half of the labor force and are more educated, which means better jobs – and better odds of having their own employer retirement plan.  As a result, they have become increasingly financially independent. This trend of greater independence is now showing up among older women. Widows between ages…

In Beavercreek, Ohio, the cleanup from a recent tornado has begun. But debris is still piled high on many residents’ lawns. “What we’re seeing following this tornado is people not having enough cash to pay upfront for house debris removal even though insurance companies will reimburse them,” former mayor Brian Jarvis said on Twitter. The debris cleanup comes on top of other costs like temporary housing in this city east of Dayton. Much was made recently of a survey in which four of every 10 American families said they could not cover an unexpected $400 expense. But no one explained why. New research has some answers. Even when people have $400 in their checking or savings accounts, they don’t always…

Topics for this year’s Retirement and Disability Research Consortium meeting include the opioid crisis, retirement wealth inequality over several decades, trends in Social Security’s disability program, and the impacts of payday loans, college debt, and mortgages on household finances. Researchers from around the country will present their findings at the annual meeting in Washington, D.C. Anyone with an interest in retirement and disability policy is welcome. Registration will be open through Monday, July 29. For those unable to attend, the event will be live-streamed. The agenda lists all of the studies. Here are a few: Why are 401(k)/IRA Balances Substantially Below Potential? The Impacts of Payday Loan Use on the Financial Well-being of OASDI and SSI Beneficiaries The Causes and Consequences…

Half of the workers who have an employer retirement plan haven’t saved enough to ensure they can retire comfortably. This 17-minute video might be just the ticket for them. Kevin Bracker, a finance professor at Pittsburg State University in Kansas, presents a solid retirement strategy to workers with limited resources who need to get smart about saving and investing. While not exactly a lively speaker, Bracker explains the most important concepts clearly – why starting to save early is important, why index funds are often better than actively managed investments, the difference between Roth and traditional IRAs, etc. Some of his figures are somewhat different than the data generated by the Center for Retirement Research, which sponsors this blog. But…

When a Social Security statement comes in the mail, most people do not, as one might suspect, throw it on the pile of envelopes. They actually open it up and read it. But are they absorbing the statements’ detailed estimates of how much money they’ll get from Social Security? RAND researcher Philip Armour tested this and found that the statement does, in fact, prompt people to stop and think about retirement: workers said their behavior and perceptions of the program changed after seeing the statement of their benefits. The study was made possible after Social Security introduced a new system for mailing out statements. Workers used to get them in the mail every year. In 2011, the government took a…

Here’s the back story to your barbecued chicken and grilled hamburgers. On July 4, 1777, Philadelphians marked the first anniversary of independence from the British with a spontaneous celebration. Future president John Adams described the ships parading on the Delaware River that day as “beautifully dressed in the colours of all nations.” In the aftermath of the Civil War, freed slaves turned the Fourth into a celebration of their emancipation. If you have the day off from work, thank Congress for declaring the Fourth a federal holiday in 1870. Enjoy! ……

Home health aides, nurses, teacher assistants and servers do a lot of lifting or standing for long periods, which takes a toll on their bodies. For a middle-aged waitress, it might be a bad knee. For a baby boomer caring for an elderly person, it might be the strain of lifting a patient out of a chair. In a new study, researchers calculated the percentage of workers who cite health-related obstacles to performing their jobs for nearly 200 occupations. A ranking of these percentages proved a fairly reliable indicator of what one would expect workers to do. Workers in the occupations with the largest share of people having difficulty performing their jobs were more likely to quit work and f…

Kathleen Rehl’s husband died in February 2007, two months after his cancer diagnosis. She has taken on the mission of helping other widows process their grief, while they slowly assume the new financial responsibilities of widowhood. Rehl, who is 72, is a former financial planner, speaker, and author of “Moving Forward on Your Own: A Financial Guidebook for Widows.” She explains the three stages of widowhood – and advises women to take each stage at their own pace. Question: Why focus on widows? Rehl: After a husband dies, and whether it’s unexpected or a long-lingering death, there is a numb period. Some widows refer to it as “my jello brain” or “my widow’s brain.” It’s a result of how t…

“Families often serve as the first line of defense against adverse events,” a RAND study starts out. In this case, the researchers are talking about a mother who protects her unemployed adult child by providing financial assistance, a request that’s not easy for a mother to resist. RAND researchers Kathryn Edwards and Jeffrey Wenger find that women of all ages are very likely to help out and “significantly alter their behavior” when a son or daughter loses a job. How much mothers’ sacrifices affect their standard of living are beyond the scope of this study. But although unemployment is at historic lows today, when a child does lose a job, a mother who provides assistance is potentially exposing herself and…

Employee lawsuits against their 401(k) retirement plans are grinding through the legal system, with mixed success. Many employers are beating them back, but there have also been some big-money settlements. This year, health insurer Anthem settled a complaint filed by its employees for $24 million, Franklin Templeton Investments settled for $14 million, and Brown University for $3.5 million. More 401(k) lawsuits were filed in 2016 and 2017 than during the 2008 financial crisis, and the steady drumbeat of litigation could be affecting how workers save and invest. For one thing, the suits have coincided with a dramatic increase in equity index funds, according to a report by the Center for Retirement Research. Last year, nearly one out of three U.S…

There’s an informal rule in journalism: put too many numbers in an article, and readers will drop like flies. A similar phenomenon might also be at work when someone looks at a Social Security statement filled with numbers. The statement, which is intended to help workers plan for retirement, shows the size of the monthly benefit check increasing incrementally as the claiming age increases. Yet many people still choose to claim their benefits soon after becoming eligible at 62, which means smaller Social Security checks, possibly for decades. In a recent experiment, a friendlier approach proved effective in helping people process this information: tell a story.  Researchers at the Center for Economic and Social Research at the University of Southern…