Squared Away Blog

Nursing homes are usually at the bottom of people’s list of places for their parents. A workable and little-known alternative is available in many states: adult foster care. This PBS video about Oregon’s program features a suburban Portland woman, Carmel Durano, who provides 24-hour care in her home for five elderly people, including her mother. Durano has been a good solution for Steve Larrence’s 99-year-old mother. He feels comfortable with Durano and lives in the same neighborhood, so he can walk over anytime to talk to his mother.  “You don’t feel like you’re in an institution. You feel like you’re living with a family,” Larrence said in the video. Durano is part of a network of more than 1,500…

Self-employed and gig workers who fail to report all of their earnings to the federal government will pay a price: a smaller monthly Social Security check when they retire. Gauging the magnitude of this problem is tricky since the IRS doesn’t know how much is not being reported by a group of workers not easily identified in the available data. As a first step, new research derived estimates of the unpaid self-employment taxes that result from the under-reporting, using a combination of U.S. Census data on the workers’ incomes and past studies on the prevalence of the problem. Specifically, the researchers found that more than 3 million self-employed people – construction contractors, small business owners, and other independent contractors –…

The first and arguably most important decision a new graduate will make is how much to pay for rent. If it’s too high, the rent – on top of those annoying student loans – will push out other priorities necessary to prevent financial trouble down the road. Rick Epple, a certified financial planner in Minnesota’s Twin Cities area, counsels his daughter’s friends and clients’ children entering the labor force to keep their rent at around 20 percent of their income. “Nobody ever talks about what they should spend,” he said. He worries about young adults who pay a third of their income – the standard recommendation – for an apartment. If the rent blows a hole in the budget, paying…

The amount of money a widow receives from Social Security can mean the difference between comfort and hardship. Husbands have a lot of control over how this will turn out. Each additional year they postpone collecting their own Social Security adds another 7.3 percent to the amount a future widow will receive every month from the program’s survivor benefit. But husbands can be a stubborn lot. Previous research has shown that a large minority fail to take their wives into account when deciding to start their Social Security. A new study confirms this in an online experiment designed to raise husbands’ awareness of the financial impact their claiming age could have on a spouse. The men’s ages ranged from 45…

The evidence continues to pile up: workers are having a very hard time affording their high-deductible health plans, which have gone from rare to covering nearly a third of U.S. workers. Between 2008 and 2018, the deductibles in employer health plans more than tripled – growing much faster than earnings. Workers’ full insurance coverage doesn’t kick in until they pay the deductibles, which now exceed $3,000 for individuals and $5,000 for families in the highest-deductible plans. Add to that a 50 percent hike in premiums during that time. Some 156 million people get health insurance through work, and they’re largely grateful to have it. They blame rising medical costs on insurers and pharmaceutical companies – and not their employers and…

Florida Retired Germans spend more days outdoors than retirees in this country. But when older Americans leave the house, they stay out longer. What makes the difference? The car. Americans love their automobiles and overwhelmingly rely on them, according to a new study by MIT’s AgeLab. If they’re going grocery shopping, they might as well run their other errands. Only about half of Germans, on the other hand, say driving is their favorite way to get around. And they venture out more frequently, because they can walk – or bike – to the market, which tends to be closer to home. As people age and recognize the inevitability of their limitations, they begin to think more carefully about whether they…

Abbott employee Harvir Humpal Student loans or the 401(k)? Young adults have a tough time finding the money for both. Unless they work for Abbott Laboratories. Employees who put at least 2 percent of their income toward student loan payments will qualify for Abbott’s 5 percent contribution to their 401(k) account – without the worker having to put his own money into the 401(k). From the company’s point of view, it’s an innovative recruitment tool – and it worked for Harvir Humpal, a 2018 biomedical engineering graduate of the California Polytechnic State University in San Luis Obispo. He joined Abbott’s northern California office in February. Humpal said his student loans weighed on him after graduation. “It’s very empowering that Abbott…

Today, half of U.S. workers say they want to work past age 65 – in the 1990s, only 16 percent did. Apparently, people are getting the message that, if they want to be comfortable in retirement, they will need to work as long as possible.  However, good intentions don’t pan out for more a third of workers closing in on retirement age. And the older the age they had planned to retire, the more they fall short of the goal. Researchers at the Center for Retirement Research, which sponsors this blog, wanted to uncover why people do not follow through. Their study was based on a survey that asked people in their late 50s when they planned to retire and…

Retirement, as portrayed in TV commercials, is the time to indulge a passion, whether tennis, enjoying more time with a spouse, frequent socializing, or civic engagement. Boston University sociologist Deborah Carr isn’t buying this idealized picture of aging. “This gilded existence is not within the grasp of all older adults,” she argues in “Golden Years? Social Inequality in Later Life.” “For those on the lower rungs of the ladder,” she writes, retirement is “marked by daily struggle, physical health challenges and economic scarcity.” Her book, which mines multidisciplinary research on aging, reaches the distressing conclusion that economic inequality not only exists but that it becomes more pronounced as people age and become vulnerable. And this problem will grow and affect…

About a third of retired households end up relying almost exclusively on Social Security, because they didn’t save for retirement. Social Security is not likely to be enough. To get Oregon workers better prepared, the state took the initiative in 2017 and started rolling out a program of individual IRA accounts for workers without a 401(k) on the job. The program, OregonSaves, was designed to ensure that employees, mainly at small businesses, can save and invest safely. Employers are required to enroll all their employees and deduct 5 percent from their paychecks to send to their state-sponsored IRAs –1 million people are potentially eligible for OregonSaves. But the onus to save ultimately falls on the individual who, once enrolled, is allowed…

Every Thursday morning, five, six, seven of them meet for a hearty breakfast and freewheeling conversation at the Sunrise Bistro in Summerville, South Carolina. The retirees’ talk careens from Tammany Hall and texting while driving to their military experiences and the aches and pains of old age. Several of the men had technical careers, so they recently dived deep into analyzing why a Coast Guard cutter carrying Zulu royalty crashed into a New Orleans dock. “We talk about man things,” said Bob Orenstein, an 83-year-old Korean War veteran who is retired from a Wall Street computer firm. “Men are mainly loners frankly, but everybody has found something to identify with in the group.” The truth is that the ROMEOs –…

A majority of workers do not know a crucial piece of information about their retirement: how much married couples can expect to receive from Social Security. The program will one day be the most important source of income for millions of Americans. But they showed their lack of understanding of how benefits work in a recent survey by researchers at RAND. A previous blog covering the same survey reported on workers’ poor knowledge of the survivor benefit for widows. This blog focuses on the other benefit for couples: the spousal benefit. Social Security works a little differently for a married couple than for a single worker, whose future benefit check will simply be determined by his or her earnings history…