Squared Away Blog

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…

Premiums for the benchmark silver health insurance plans under the Affordable Care Act will go down 1 percent to 2 percent, on average, in 2019. This sounds like good news to people scurrying to enroll by the Dec. 15 deadline. But a more accurate characterization is that this slight decline is a break from what had generally been a relentless pace of premium hikes in 2016 through 2018. Cynthia Cox, director of health reform and private insurance for the Henry J. Kaiser Family Foundation, said insurance companies in many states had previously “raised premiums more than they had to” amid the uncertainty in the program’s early years. These hikes boosted their profits, but they’ve “put the brakes on premium increases,” which they…

Retirees’ primary sources of income are the usual suspects: Social Security and employer retirement plans. They rarely use a third option: the equity locked up in their homes. The Urban Institute recently quantified how much this untapped equity could be worth to seniors in the United States and 10 European countries if it were converted to income – and the amounts are significant. The typical retired U.S. household has the potential to increase its retirement income by 35 percent, researchers Stipica Mudrazija and Barbara Butrica estimate. In Europe, using home equity would add anywhere from 19 percent in Sweden to 100 percent in Spain. ……

It is one of “the most significant labor market trends” in the United States, says Wellesley College researcher Courtney Coile. She’s referring to big increases since the 1980s and 1990s in the share of older Americans in the labor force, including one in three men in their late 60s. As for women, the baby boomers were really the first generation to thoroughly embrace full-time employment. Older women’s participation in the labor force hasn’t quite caught up with their male coworkers, but they’ve made impressive strides since the 1980s and have rapidly closed the retirement-age gap. Given the implications of this trend for retirement security – the longer people work, the better off they’ll be – Coile and many other researchers hav…

Nearly 10 million seniors are having difficulty paying for housing – and the problem is growing. Housing experts typically recommend that people keep their housing costs below a third of their income. But one in three Americans over age 65 are spending more than that on their rent or  mortgage payment, utilities, property insurance, maintenance, and other housing costs, according to a new study, “Housing America’s Older Adults,” by Harvard’s Joint Center for Housing Studies. If the senior housing problem hasn’t reached crisis proportions yet, Jennifer Molinsky, who wrote the center’s report, predicted that it will if nothing is done to increase the supply of housing structures that are both affordable and age-friendly to meet the needs of aging baby boomers…