Squared Away Blog

Married couples don’t necessarily know what the other spouse is thinking about retirement. This insight came out of a new Fidelity Investments survey that asked some 1,600 people if they knew when their significant other planned to retire. Only 43 percent answered the question correctly. This disconnect reveals just how few couples are talking about retirement, said Fidelity spokesman Ted Mitchell, who worked on the survey. Fidelity’s survey went out to adults of all ages, so the younger ones no doubt felt they’re too young to be thinking – much less talking – about what their lives will be like decades from now. But things change as couples age. When retirement comes into sharper focus, it’s natural to start talking…

Sumat Lam, a recent college graduate, was skeptical when his Silicon Valley employer transferred him to Austin, Texas. What he found was a high-tech mecca that defies the stereotypes of 10-gallon hats and Southern drawls. Google, Apple and Amazon have established outposts in the “Silicon Hills” of Texas’ Hill Country. The young workers moving there are “bringing in their culture and influences from Boston and New York,” Lam told VOA News. Taylor Hardy lives in Dayton, Ohio, but she might as well be living on a different planet. This young nursing assistant can barely eke out a living. Her plight is shared by too many others in this former industrial hub that has been in a downward spiral that accelerated after…

A dramatic decline in widow’s poverty over a quarter century has been a positive outcome of more women going to college and moving into the labor force. Yet 15 percent of widows are still poor – three times the poverty rate for married women. A new study by the Center for Retirement Research takes a fresh look at Social Security’s widow benefits and finds that increasing them “could be a well-targeted way” to further reduce poverty. Widows are vulnerable to being poor for several reasons. The main reason is that the income coming into a household declines when the husband dies.  The number of Social Security checks drops from two to one, and any employer pension the husband received is…

“Seven Up,” a famous British documentary series, interviewed 7-year-old schoolchildren in 1964 and filmed them every seven years after that. Over the documentary’s 49-year span, viewers watched the children’s lives take shape. A boy at an upper-crust boarding school goes to college and on to teach math at a prestigious private school. A girl educated in a working-class school in London’s East End is just able to make ends meet as an adult. A young equestrian from a wealthy family raises her own privileged children. A boy in an orphanage becomes a bricklayer. These personal profiles at the heart of “Seven Up” reverberate in a recent, unrelated, academic study that has reached a similar conclusion: parents’ investment in educating their…

The fact that the richest Americans are grabbing such a big slice of the pie isn’t exactly breaking news. What is news is that Wall Street is getting nervous about it. Moody’s Investors Service, a private watchdog for the federal government’s fiscal soundness, has concluded that inequality has reached the point that it threatens a system already being strained by increases in the federal debt. But Moody’s also noted that inequality is contributing to slower economic growth, which further aggravates inequality. The high level of U.S. inequality today “sets us apart” from Canada, Australia, and several European countries, Moody’s said in an October report, “Widening Income Inequality Will Weigh on U.S. Credit Profile.” Moody’s central concern is how inequality w…

My husband is newly retired, and we’ve spent hours talking about where we might want to live after I retire in a few years. Our imagined scenarios are always changing. But I’m clear on one thing: I do not want to buy a house in Naples, Florida, where a couple we know did recently. No offense to Naples, which has lots to recommend it – no shoveling! But the typical resident is 65 years old. In fact, Naples is older than the state of Florida, where retirement communities are so pervasive that they distinguish between the “young-old” (ages 60-75) and the “old-old” (over 75). Boston, where my husband and I live now, couldn’t be more different. It is swarming with college students…

It’s long been known that people with high earnings tend to live longer than low earners. But this gap in life expectancy has widened into a gulf. For example, high-earning men born back in 1912 lived about eight months longer than their counterparts in the bottom half of the income range. This longevity gap increased to five years for men who were born in 1941 and are now in their late 70s. The disparity for women is similar, but not as extreme. This growing longevity gap has important implications for Social Security. The program’s intent is to be progressive – more generous to lower-income retirees.  But the unequal life spans have significantly reduced that progressivity, concludes Matt Rutledge in a…

As the outlines of the student loan crisis were coming into focus, this blog featured a video of new college graduates dazed and bewildered by the size of their monthly loan payments and the intrusion on their lifestyles. Beth Kobliner, a personal finance speaker and journalist, has a surefire antidote: talk to your teenager early and often so they know what they’ll be getting into if they borrow money for college. She explains how to do this successfully in a new series of helpful, breezy videos. She recommends that parents make the early conversations light and easygoing. Have the modest goal of encouraging your freshman in high school to start thinking about college broadly. Ask about his or her aspirations, interests,…

A Squared Away reader wrote recently that he and his wife saved $2,400 a year by paying cash for their medications.    When a pharmacy sells a prescription drug to a customer, the health insurer reimburses the pharmacy at a negotiated rate that covers its cost for the drug, its dispensing fees, and any additional markup. It’s often the case that a patient’s copayment exceeds the pharmacy’s reimbursement, resulting in an overcharge in the copayment. More than one in four copayments were overcharges in a March analysis in the Journal of the American Medical Association of some 4,000 outpatient drugs and 9 million insurance claims by people of all ages. We asked Mohamed A. Jalloh in Napa, California, to guid…

Retirement clearly is not a priority for far too many young working adults. Large minorities of the 22- to 37-year-olds who responded to a recent LendEdu survey said their retirement saving every month amounts to less than they spend on various categories of consumer goods. Nearly half of them report they spend more on dining out than on retirement saving. Almost one in three spend more on alcohol or new clothes, and one in four spend more on streaming services such as Netflix and Spotify. What that indicates is that a lot of them aren’t saving very much. It might seem unfair that saving for retirement is such an urgent matter for someone not yet out of their 30s. After all,…

Walter Mischel, who used marshmallows to test children’s ability to delay gratification, died recently, but his lesson never grows old. For those who aren’t familiar with his famous test, a young girl or boy sits at a table with a single marshmallow on a plate. The tester tells the child that he or she can eat the marshmallow right away, but waiting to eat it until the tester comes back into the room will bring a big payoff: a second sweet, puffy morsel. Watching the children in this video squirm as they wrestle with their decisions brings to mind the adult equivalent. A desire for immediate self-gratification can come at the detriment of any number of personal financial decisions. Lik…

Thomas Uttormark When Thomas Uttormark turned 65 in 2010, he researched his Medigap options on the Medicare.gov website and chose a plan with a premium of around $100 a month. As his premium inched up over the next two years, he decided to apply to another insurance company to see if he could reduce the cost of his policy. Since the federal government dictates the coverage amounts under each of the 10 Medigap plans, he reasoned, his existing insurer’s Plan N provided exactly the same coverage as any other insurer’s Plan N – and the new plan might be cheaper. “I thought it was no big deal to switch,” said the 73-year-old Uttormark. However, switching did prove to be a…