Squared Away Blog

Let’s get this out of the way first: the vast majority of financial advisers would not take advantage of you. But that doesn’t eliminate the problem of discerning whether an individual adviser can be trusted. About 7 percent of U.S. advisers have misconduct records in civil or regulatory proceedings.  If someone draws an unlucky card and picks a bad one, how would they know? In certain situations, they might not. A new study finds that various things can trip people up and make them trust an adviser who is giving out bad advice. These influences included a good first impression of the adviser. And one way for an adviser to make a good first impression is by initially confirming t…

One thing really stood out in a recent study: the deterioration in Hispanics’ retirement prospects since the 2008-2009 recession. Workers’ success at saving for retirement is becoming increasingly important to their financial security in old age. This puts Hispanic households at a clear disadvantage: they earn half as much as white households, which makes it that much more challenging to build retirement wealth by buying a house or saving more in their 401(k)s – two-thirds of Hispanic workers don’t even participate in an employer 401(k). White Americans aren’t exactly in great shape either. Today, 48 percent of them are at risk of experiencing a drop in their standard of living after they retire – this is 6 percentage points higher…

The dramatic increase in U.S. inequality is due almost entirely to the expanding fortunes of the 1 percent. They have tripled their share of the nation’s total wealth to 21 percent since the 1970s. Such extreme concentrations of wealth are of growing concern to economists and even one Wall Street firm. They argue that it hurts the economy for everyone. The public’s reaction couldn’t be more different. Their preferred solution to barely coping financially is to become rich themselves. Two out of three Americans told Gallup they aspire to being rich and say that the super-wealthy are good for the country. Democrats and Republicans are equally enamored of the rich. What it means to be in the top 1 percent…

A dramatic increase in 1993 in how much parents are permitted to borrow from the federal government for their children’s college is coming home to roost. Since then, average debt through the parent PLUS loans has more than tripled, adjusted for inflation, according to a Brookings Institution report. About one in 10 parents owe more than $100,000. And as loan balances have ballooned, the rate of repayment has slowed. Now that the college applications have been submitted, Allan Katz, a financial adviser in Staten Island, New York, has this advice for parents contemplating their next move: PLUS loans should be avoided “at all cost,” he said. “A big part of my practice is avoiding PLUS loans.” His dire warning stems…

This is young adults’ financial dilemma in a nutshell: you’re well aware you should be saving money, but you admit you’d rather spend it on the fun stuff. Yes, paying the rent or student loans every month takes discipline. But it isn’t enough. Even more discipline must be summoned to save money, whether in an emergency fund or a retirement plan at work. Tia Chambers Tia Chambers, a financial coach in Indianapolis and certified financial education instructor (CFEI), has put some thought into how Millennials can overcome their high psychological hurdles to saving. The 32-year-old lays out six doable steps on her website, Financially Fit & Fab, which she recently elaborated on during an interview. Get in the right mindset…

Created in the 1930s, Social Security’s spousal benefit – it’s half of a retired husband’s benefit – was the way to compensate housewives for the work of raising children. The world has changed, but Social Security hasn’t been modified to reflect the rise of the full-time, working mother. Today, married women frequently have earned enough to collect Social Security based on their own employment histories, rather than a spousal benefit. The problem comes when their earnings are reduced – and ultimately their Social Security benefits – because they disrupted their career paths and sacrificed pay raises to care for their children. Single motherhood has also become very common, which means that a wide swath of women have no access to…

If a new baby is in the works for the new year, prepare yourself now. Despite the pure joy of having a child, the fact of the matter is that the basics – daycare plus a second bedroom, extra health insurance, food and personal items – are expensive even in Little Rock, Arkansas, which is at the bottom of Magnify Money’s new ranking of the cost of adding a family member in 100 U.S. major cities. Monthly expenses for an infant exceed $700 a month in Little Rock, or nearly $8,500 a year. The big budget buster everywhere is day care, which is a financial shock for most new parents. The bills can easily reach or exceed $1,000 a month, and day…

We’re kicking off 2019 with our periodic review of the most-read articles over the past year, based on the blog traffic tracked by Google Analytics. Judging by the comments readers leave at the end of the blog posts, baby boomers are really diving into the nitty-gritty of preparing themselves mentally and financially for retirement. Financial advisers also frequently comment on Squared Away, and we hope some of our web traffic is because they’re sharing our blog with their clients. Last year, Squared Away received recognition from other media. The Wall Street Journal recommended us to its readers for the blog’s “wonderful mix of topics.” The Los Angeles Times picked up our article, “Why Retirement Inequality is Rising.” MarketWatch published our…

Be safe during the holidays, whether you’re traveling across town or across the country to enjoy your family and friends. We’re taking a break too at the Center for Retirement Research. This blog will return on Thursday Jan. 3 with a roundup of our readers’ favorite articles in 2018. ……

When my grandmother was spirited away by dementia and no longer recognized me, I stopped visiting her in the nursing home. I didn’t understand this at the time but now think that I just wanted to remember her baking lemon cream pies or waving at me as she rode around on her lawnmower cropping the lot next to her Indiana farmhouse. I wish I could get another chance and do things better this time. Regret is hard to live with. Psychologist Ann Kaiser Stearns views the holidays as a precious time of year to make elderly family members feel they are loved and included in the festivities. “People respond for as long as they live to smiles, to touch, to…

With more Americans today living into their 80s and beyond, the elderly are becoming more vulnerable to slipping into poverty. To reduce the poverty risk facing the oldest retirees, some policy experts have proposed increasing Social Security benefits for everyone at age 85. Under one common proposal analyzed by the Center for Retirement Research in a new report, the current benefit at this age would increase by 5 percent. The poverty rate for people over 85 is 12 percent, compared with 8 percent for new retirees. But more elderly people may actually be living on the edge, because the income levels that define poverty for them are so low: less than $11,757 for a single person and less than $14,817…

The federal government has released online brochures to give people who are thrust into a caregiving role a better idea of what they’re getting into. “It’s a big shock at first and a big adjustment,” an Episcopal priest says in the video above. He became his mother’s caregiver after she developed dementia. But people who anticipate they will one day be a caregiver can soften the blow by studying up on their future responsibilities with the Consumer Financial Protection Bureau’s new guides to caring for a loved one. The brochures are free and cover four financial responsibilities: guardian, trustee, power of attorney, and fiduciary for a Social Security or Veterans Affairs beneficiary. They can be downloaded in English or in…