Squared Away Blog

Medicare Part D, passed in 2003, has significantly reduced seniors’ spending on prescription drugs. But the coverage hasn’t protected Leslie Ross from near calamity. The 72-year-old diabetic needs insulin to stay alive. The prices of these drugs have skyrocketed, forcing her to supplement her long-lasting insulin, Lantus, with more frequent use of a less-expensive insulin. This one remains in her body only four hours, requiring more vigilance to control her blood sugar. To cut her Lantus bills – nearly $1,700 this year – she has sometimes resorted to buying unused supplies from other diabetics on eBay. “You take your chances when you do stuff like that,” she said. “I checked that the vial hasn’t been opened. It still had t…

A new study lays out all the difficulties older workers have holding onto a job so they can retire on their own terms – even when the economy is doing well. Over the past quarter of a century, more than half of the older Americans who had been employed in stable jobs have been pushed or nudged out of employment at some point late in their careers. This could’ve happened due to a layoff, a bad supervisor, difficult or dangerous working conditions, inadequate pay or a missed promotion. This finding from a Urban Institute study throws into question “the notion that most seasoned workers who are strongly attached to the labor force can remain at work and earn a stab…

Thousands of baby boomers retire every day and sign up for Social Security. Yet the payroll tax that funds their benefits is being levied on a shrinking share of workers’ aggregate earnings. You might not know this but inequality and growing U.S. trade with China are among the forces that are behind this trend, Gal Wettstein explains in a new podcast about his research for the Center for Retirement Research (CRR). This is the latest in a series of podcast interviews in which CRR researchers talk about their work on issues related to work, aging, and retirement. The podcasts are hosted by yours truly. Others explore how motherhood reduces women’s Social Security benefits, the limited impact of cognitive decline on…

If the difference in men and women’s pay is a gap, then the wealth difference can only be described as a chasm. Women earn 80 cents for each dollar a man earns. But a woman has 32 cents of net worth to a man’s dollar. One byproduct of the #MeToo movement is the fresh light it has put on the age-old women’s issues of unequal professional status and pay.  But Elena Chavez Quezada, senior director of the San Francisco Foundation, explains in this video that wealth – home equity and financial assets minus debts – provides a more accurate picture of financial stability over the long-term. A 2018 report found that net worth for older women, adjusted for inflation, has…

Luke Huffstutter Luke Huffstutter felt a great sense of relief when the employees of his Portland hair salon started putting money into a state retirement program designed to make saving easy. This is much better than the “guilt” he felt over many years of desperate attempts – and not much luck – to convince his stylists and other employees to save on their own. He even brought in a financial adviser once to nudge them. “I have a responsibility to provide them a path to retirement,” Huffstutter said. Today, 39 of the Annastasia Salon’s 45 employees have joined some 22,000 others across the state of Oregon who’ve accumulated a total of $10 million for retirement through OregonSaves, a state government…

It might be the most consequential issue baby boomers will deal with when they retire: did I save enough? Vanguard’s free online calculator will estimate that for you, using the same sophisticated technique financial advisers charge hundreds of dollars to provide. The user-friendly calculator uses 100,000 of what are called Monte Carlo simulations of potential future returns to the financial markets to arrive at the probability that a household’s invested savings will last through the end of retirement. To get to this number, older workers enter their information into the calculator – 401(k) account balance, asset allocation, estimated years in retirement, and annual withdrawals – by moving around a sliding scale for each input. The financial industry recommends aiming for a…

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…