Squared Away Blog

The 1980s featured bankrupt Texas savings and loans. Then, in the mid-2000s, Countrywide failed to clearly disclose to customers the spike in their subprime mortgage payments in year 3. In 2016, 5 million customers learned about their fabricated Wells Fargo accounts. And last year, Equifax breached 140 million customers’ privacy. No wonder people are flocking to the friendly credit union in their church, labor union or workplace. The widespread fraud reports making headlines with regularity have fed a perception that “fraud happens in the banking world and a lot of it goes unpunished,” said Mike Schenk, senior economist for the Credit Union National Association (CUNA). “It’s not just Countrywide as an abstract concept. It’s that Countrywide put people into thes…

It’s a simple concept. Deposit retirees’ Social Security checks right before their big-ticket bills come, especially rent. The U.S. Social Security Administration’s current schedule for depositing pension checks in bank accounts is based on each retiree’s birth date– it can be the second, third, or fourth Wednesday of each month. The problem is that cash-strapped, low-income seniors receiving the earlier checks, on the second or third Wednesdays, can fall into a common behavioral trap: they spend the money soon after it comes in and then can’t cover the rent, mortgages or credit cards due at the beginning of the following month. According to a clever new study, people who get these early monthly checks are at greater risk of resorting…

Hyacinthe Rigaud’s portrait of King Louis XIV, courtesy of the Getty Open Content Program Tontines might be a nifty idea for retirement income. Too bad they haven’t been legal here for a century. Tontine is a fancy word for betting on how long you’ll live – in a good way. Here’s the concept in a nutshell: many people pool their money in return for guaranteed regular payouts for life, similar to an annuity. The people who live to, say 90, will receive ever-increasing financial payoffs, because the number of participants in the pool will invariably shrink over time.  The catch is that the investors who die young won’t receive as much income as the men and women who live t…

The children in this video have a delightful take on our cultural attitudes and mores about money – what it is, what it can do, and whether to share it. The interviewer borrowed the format Art Linkletter used when asking kids questions on his Emmy Award-winning television show, “Art Linkletter’s House Party,” which aired between 1952 and 1969 – as boomers and their parents will remember. The new video about kids and money is posted on the American Financial Services Association Education Foundation’s website.  The foundation’s mission is to educate people about responsible money management, starting with young children and teenagers. The adorable factor makes this 6-minute video fly by…

Two new “sandwich generations” are getting into the thick of things: Generation X and Millennials. Baby boomers first latched onto this label as they juggled caring for their parents and children simultaneously.  With lifespans continuing to increase, the squeeze from parental caregiving is tightening among Gen-X and Millennials. As baby boomers and their parents get older, all three generations are feeling the financial strain of this familial obligation, which people take on either because “it is what family has always done” or “there was no other option,” according to caregivers’ responses to Northwestern Mutual’s new annual survey of adults between the ages of 18 and 64. A separate 2017 report, by the Center for Retirement Research, estimated that one in five people will,…

A retiree’s sources of money are often described as a three-legged stool: Social Security, pension, and savings. But many seniors’ financial support looks more like a single, sturdy pillar: Social Security. This is shown dramatically in new U.S. Social Security Administration (SSA) estimates of just how critical the federal program is to millions of older Americans.  The data speak for themselves: One in two retired households counts on Social Security for at least 50 percent of their total income. One in four gets virtually all income – 90 percent – from the program. The differences among myriad demographic groups also follow the usual socioeconomic patterns, according to the SSA researchers, Irena Dushi, Howard M. Iams, and Brad Trenkamp. ……

The scary thing about fully retiring is the obvious thing: the ability to earn stops cold. Most retirees live on what they get from Social Security and what they can spend from their savings, if they have any.  So how many older Americans with fixed incomes can accurately be described as being in difficult straits financially? Only about 10 percent of retired people today are being forced to cut back on food and medications to pay their other bills, concludes a summary of recent studies on retirement income by the Center for Retirement Research (CRR), which supports this blog. Tomorrow’s retirees have a more troubling outlook, in part because they will be dramatically more reliant on 401(k)s. The typical middle-incom…

In the two years since starting a series of blogs, “Boomers: Rewriting Retirement,” I’ve profiled five willing baby boomers in various phases of retirement as they grapple with a variety of issues. The individual profiles are again posted here, in the event one of them might be helpful to a reader who missed it the first time. And we’re always looking for more guinea pigs, if anyone has an interesting story to tell! Click on the links at the end of each headline: “A Familiar Dilemma: to Work or Retire.” “Finally retired. Now What?” “Caring for her elderly parents 24/7.” A Californian’s Retirement is Part-time.” “The Ultimate in Travel: Retiring Abroad.”…

Rank-and-file workers’ wages have barely gone up since the 2008-09 recession, despite a U.S. job market firing on all cylinders for several years. Latinos struggle more than most. Take restaurant workers. They are overrepresented in an industry that expanded rapidly post-recession, putting hundreds of thousands of cooks, waiters, and busboys to work. But “those are some of the worst jobs” says Carmen Rojas, who heads The Workers Lab in Oakland, which supports small entrepreneurs. Food-service and other low-paying jobs not only lack benefits and security but typically don’t invest heavily in training and don’t provide upward mobility, “proving what it means to debase the promise of work away from opportunity and toward survival,” said Marie Mora of the University of…

Yup, more than half of college students are using some of their student loan money to pay for spring break. It’s the peak season, and 21st century ingenuity is being applied to the age-old problem of paying for college trips to popular, sunny climates like Miami and Cabos San Lucas in Mexico’s Baja Peninsula.  LendEdu decided to do a survey to answer a question that Mike Brown put so succinctly in his blog: How can “so many students living on a shoestring budget afford to go on a not-so-cheap weeklong getaway”? The mechanism allowing this can be found in college financial aid offices, which funnel loan money directly to students after, wisely, deducting tuition and fees. Fifty-one percent of t…

Australia, Cambodia, Laos, Thailand, Spain, Portugal, Scotland, Ecuador, Belize, Nicaragua – our readers living all over the world, or planning to, shared their experiences in comments posted to a February blog, “The Ultimate Travel: Retiring Abroad.” The article profiled a Houston couple on the verge of retiring who are systematically exploring cities that interest them in Panama and Costa Rica. Few blogs have elicited so many comments – no doubt because thoughts of retiring overseas are more fun than worrying about whether the 401(k) account has enough money in it. The success of retiree Dennis Desmond and his wife’s relocation to Australia makes it hard to resist temptation. “The weather here is incredible, the people are fantastically friendly, and the scenery…

Early last year, a client who was a month away from retiring walked into Matthew Jackson’s office and asked him to manage his money. Then the client started pulling financial statements out of a folder and slid them across the desk. “I’m excited for you,” Jackson recalled was his first reaction. “But let’s talk more about what you want to do with your money, rather than want you want to do for your money.” The client “looked at me and then past me. In 4 or 5 seconds he said, ‘Matt I have no idea.’” To prod others into weighing this critical question for themselves, Jackson wrote a book, “The Retirement Dreammaker: Master the Art of Retirement Abundance.” And t…