Squared Away Blog

After decades of study devoted to describing the negative effects of dementia, a new generation of researchers is pursuing a more encouraging line of inquiry: finding ways that seniors can slow the inevitable decline. One vein of this research, still in its infancy, considers whether seniors could reduce the risk of dementia if they engage in volunteer work. Several studies focus on volunteering, because most of the population with the greatest risk of dementia – people over age 65 – is no longer working. There’s no suggestion that volunteering can prevent dementia. However, one new study, by Swedish and European researchers, found that Swedes between 65 and 69 who volunteer had a “significant decrease in cognitive complaints,” compared with the non-volunteers. T…

Millennials are big users of payday loans, which have steep interest rates that can really mess up their finances. Remarkably, two out of five people in their mid-20s to mid-30s have used a payday loan, which is more than double the frequency for people in their late 30s, says Melody Harvey at the Pardee RAND public policy school. Generation-Xers and baby boomers use them even less, other surveys have shown. Harvey’s new research has produced some evidence that something can be done to protect vulnerable young adults in the future: require them to take money management classes while they’re still in high school. The use of payday loans is part of a broader trend among Millennials, she said. They also…

Rich or poor, old or young, white or black, red or blue – our differences cut many ways. But a new divide has opened up, one based on geography. Stark new evidence shows that well-paid, highly educated people have moved to high-cost coastal cities over the past decade, while lower-income, less educated people have moved out. American cities are “grow[ing] increasingly dissimilar along socioeconomic dimensions,” said Issi Romem, a fellow at the Terner Center for Housing Innovation at the University of California and economist for BuildZoom, a California website focused on development. Gentrification is nothing new. But Romem’s analysis of U.S. intercity migration shows that gentrification occurs not just within city neighborhoods but also between cities. San Francisco is t…

This blog has spilled plenty of ink over the problem of so many workers having inadequate retirement savings. One theory is that they don’t understand the urgency. But a new survey makes clear that they not only are fully aware of the problem but are very worried about it. The vast majority of the 1,000-plus baby boomers and Generation-Xers who conceded to being behind on their saving wish they could save more – Allianz, which conducted the survey, calls them “chasers.” These chasers recognize that if they don’t make adjustments, it’ll be too late to repair their finances. Two out of three fear the worst: they’ll run out of money at some point in old age and will be forced…

When a marriage ends in divorce, there are no fewer than seven ways that it could damage a person’s finances. Divorce can rack up costly legal fees; force a house or stock sale in a down market; increase living expenses; increase tax rates; hamper the ability of the primary caregiver – mothers – to earn money; require fathers to pay alimony; and reduce each partner’s access to credit. A new study looking at their impact on workers’ future finances concludes that divorce – the fate of four in 10 marriages – “substantially increases the likelihood” that their standard of living will decline after they retire. ……

The student loan problem has gotten under our collective skin – so much so that a new game show revolves around it. “Paid Off,” on TruTV, promises to pay off a share of the winning contestant’s student debt – 20 percent, 50 percent, or 100 percent – depending on how many answers he or she gets right in the final round of questioning. “Paid Off” is as inane as any television game show. The format is more “Family Feud” than “Jeopardy,” with softball questions designed to spark as much faux competition as possible among the former students who compete. One example: name the most romantic date costing under $10: picnic, walk, Netflix movie, etc. The show’s host, Michael Torpey, who…

It’s not difficult to find baby boomers out in the job market who will tell you that they have fewer employment options than they used to. The turning point occurs around age 55. According to a recent study, only 4 percent of people in their early 50s who find a new job are moving into what the researchers label as “old-person jobs” – that is, jobs in occupations that disproportionately employ older workers. The share in these jobs increases sharply, to 13 percent, by the time they reach their late 50s and to 22 percent in their early 60s. Given the more difficult job market, this cloud has a silver lining. Older workers are actually better off today than they wer…

In the world of Big Data, do you fall into the industry’s Extra Needy category, or are you viewed as American Royalty? Perhaps Ethnic Second City Struggler or Small Town Shallow Pockets is a more apt description of you? Or how about Eager Senior Buyer or Tough Start: Young Single Parent? While the media are focused on Facebook’s privacy breaches, a growing multibillion-dollar industry of data brokers is mining personal information online in order to sell our data dossiers to financial and other companies – sometimes to the detriment of our personal finances. Big Data collection also can be innocuous, when it is used for marketing. In this form, it’s just the high-tech version of snail mail solicitations for credit…

Marketplace recently estimated that a family’s common expenses have increased 30 percent since the 1990s. This was based on the inflation-adjusted prices for 11 necessities and small luxuries, from food, housing, college, and medical care to movie tickets and air fare. On the income side of the household ledger, one well-known study estimates that the lifetime, inflation-adjusted income of a typical 60-year-old man today is substantially less than it was for a man who turned 60 back in 2002. Women, who have benefitted from getting more education, are earning more, but they started out at much lower pay levels and still trail men. These trends – rising expenses and shrinking paychecks – get to the essence of the middle-class struggle described in Alissa…

Moms don’t need a research study to tell them that their earnings will never be high as dads’. Nevertheless, a new study confirms this – and the pay gap may be larger than some suspect. In the two years surrounding the baby’s birth, mothers’ earnings fall by 12 percent, on average, as their careers stall or they take a hiatus from work to care for the child. Meanwhile, fathers’ careers clip along, with bonuses, pay raises, more hours, or better jobs bumping up their pay by 34 percent. Mothers don’t get back to their pre-baby income levels until the child is 9 or 10 years old. The mom-dad wage gap will never be smaller than it was before the baby, becaus…

One of Americans’ biggest financial challenges is proper planning to ensure that their standard of living doesn’t drop after they retire and the regular paychecks stop. A new study has practical implications for baby boomers in urgent need of improving their retirement finances: working a few additional years carries a lot more financial punch than a last-ditch effort to save some extra money in a 401(k). This point is made dramatically in a simple example in the study: if a head of household who is 10 years away from retiring increases his 401(k) contributions from 6 percent to 7 percent of pay (with a 3 percent employer match) for the next decade, he would get no more benefit than if…

Despite the mounting pressures on Americans of all ages to save for retirement, our saving habits haven’t changed in 10 years. The combined employer and employee contributions to 401(k)s consistently hover around 10 percent of workers’ pay, according to “How America Saves 2018,” an annual report by Vanguard, which administers thousands of employer 401(k)s and other defined contribution plans. Retirement account balances aren’t going up either. The typical participant’s 401(k) balance is no larger than it was in 2007, even though accounts grew 7 percent last year, to $26,000, thanks to a strong stock market. The balances, when adjusted for inflation, are slightly smaller. The growing adoption of 401(k) plans that automatically enroll their workers is having both negative and…