Squared Away Blog

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…

More than 10 percent of the nation’s retirees struggle with hunger. New research offers one explanation: when people retire and give up a regular paycheck, they sometimes adjust to having less income by reducing their food intake. After retiring, the men in the study ate 17 percent less protein, which becomes more important as people age. Their total calorie intake also dropped 19 percent, and their Vitamin E consumption fell 16 percent, on average, according to researchers at the University of Michigan and University of Delaware. The retirees also cut back on several other nutrients. This contradicts previous studies, which had failed to uncover a link between diet and retirement income. Skeptical of the findings, the researchers did an exhaustiv…

As retirees’ health declines, their medical costs go up. These costs include both everyday healthcare expenses and long-term care costs. The everyday expenses that Medicare does not cover – Part B and Part D premiums, copayments, eyeglasses, and dental care – consume about 20 percent of the incomes of households ages 75 and over. While not exactly good news, 20 percent is “perhaps manageable” for most, concluded researchers at the Center for Retirement Research in a summary of various studies in this area. The real problem comes for the unlucky minority – about 5 percent of seniors – who spend more than half of their income out of their own pockets for healthcare. Turning to long-term care, these services are less…

Since only about half of all private sector workers currently have access to an employer 401(k) plan, it’s not at all unusual for spouses who are both working to have only one saver in the family. When that’s the case, is the person who is contributing to the employer retirement plan saving for two?  The answer is definitely not, concludes a new study by the Center for Retirement Research. The challenge for couples living on two paychecks is that they have to save more money to maintain their current lifestyle after they retire. But households with two earners and only one saver end up saving less than others – only about 5 percent of the couple’s combined incomes, compared wit…

One in four workers in their mid-50s will eventually encounter difficulties on the job, because their bodies start breaking down or they aren’t as sharp as they used to be. When a new, disabling condition is long-lasting, 63-year-olds – still a young age to be retiring – are two times more likely to stop working than other people their age, according to a new study by Mathematica, a Princeton, N.J., research firm. The researchers started out with a fairly healthy group of 55-year-olds and followed their career paths through age 67. Strikingly, even people as young as 59 who have experienced a new work-limiting health condition leave the labor force at a much higher rate than those who did not…

My divorced aunt did not work while she was raising eight children. After her former husband died, she was pleasantly surprised to learn she could start collecting his Social Security. She has a lot of company. Nearly two out of three men and women in a new survey by RAND were unaware of this rule: a divorced person who was married for at least 10 years is entitled to the deceased spouses’s survivor benefit. In fact, she would even get the benefit if he remarried. In the case of couples who were still married when the spouse died, the marriage had to last only nine months for the survivor to get the benefit. Fewer than half of the people surveyed…

The perils of aging generally escalate around 75, and they are becoming more pervasive as more Americans live to very old ages. One of these perils – declining cognitive ability – often creates financial problems. A new study that summarized the research on this side of the retirement equation identified the financial fallout from dementia. Currently, dementia afflicts roughly a quarter of seniors in their early 80s. And geriatricians and demographers have predicted for years that dementia will become a serious societal problem in the future as the tsunami of baby boomers reach older ages. The first sign of deteriorating financial skills might be forgetting to pay a bill. But when severe dementia sets in, the vast majority completely lose their…