Squared Away Blog

Moves by state governments to improve access to food stamps have been very effective in increasing the number of retirees and people with disabilities who get the benefits, a new study finds. The states, given a wide berth to administer the federal Supplemental Nutrition Assistance Program, or SNAP, as they see fit, have responded in recent decades by easing access to food stamps for their low-income residents through a variety of policies. Many states have loosened the eligibility requirements by, for example, increasing the limits on the dollar amount of assets applicants are permitted to have or by automatically qualifying them when they receive other means-tested benefits. A second set of policies aim to reduce so-called transaction costs, which broadly…

For the average older worker who loses his job, his income a decade later is 15 percent lower than if he had escaped the layoff. It gets worse: His pension wealth is worth 20 percent less, and his financial assets are 30 percent smaller. The enormous financial hit delivered to older workers who experienced a layoff sometime during the 1990s was reported recently by researchers at the Center for Retirement Research, which supports this blog. First, the researchers pinpointed all workers in the data set who were over age 50 and lost a job between 1992 and 2000. They then examined their financial outcomes – earnings and assets – a decade later and compared them with outcomes for those who…

Mary Roby The stress of living with her son and daughter-in-law made Mary Roby’s blood sugar spike. But when she began her search for an independent senior housing community, affordable and nice never seemed to come in the same package. Roby, who is 80, said she looked around quite a bit. A one-room place in the Boston area for $4,500 a month had no senior services, a limited kitchen, and was housed in a poorly maintained building. She also knew, through her son’s in-laws, about a high-end assisted living community with extensive services, but it charged more than $6,000. Then she found Shillman House, which was both affordable and nice. “I love it here,” Roby said about the independent senior housing community…

Social Security Administration poster, 1956 Many women are fuzzy on how Social Security benefits for widows work and even more unclear about the program’s spousal benefits. I know two of these women. Their situations nicely illustrate how this federal program promotes the well-being of older women and families. One is my divorced aunt. She was surprised to learn, after my uncle died a few years ago, that her widow’s – or survivor’s – benefit, based on his decades of work as a housing developer, would be double the spousal benefit she’d received while he was alive. Divorced spouses are eligible for the same spousal and survivor’s benefits as still-married spouses, though only if the marriage lasted more than 10 years…

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. ……

Depressing or eye-opening? An online tool tells you where you stand financially by stacking up your net worth against other Americans. The calculator compares a family’s net worth – financial and other assets minus debts – with all other U.S. families. Homeowners can choose to include the value of their home equity in their total net worth – or not. Older people have had more time to accumulate wealth, so the rankings are based on the age of the household’s primary wage earner. The comparison is made with 2016 data from the Federal Reserve Board’s triennial Survey of Consumer Finances, which is the gold standard for personal financial data. Since family – not individual – data are being compared, peo…

The number of U.S. households ages 70 and over who have written a will has been dropping for at least 20 years, to about two-thirds today. But a new study that looks under the hood of estate planning in this country shows that the matter of whether someone has a will often comes down to race: older Black and Hispanic households are much less likely to have them than non-Hispanic Whites. The researchers also confirm that having a will is crucial to the successful transfer of a meaningful amount of wealth to one’s intended heir or heirs. In this way, wills can be an effective way to ensure that intergenerational wealth is being preserved and passed on within Black and…

Four out of five retired households will pay little or no income taxes. But the tax rates at the highest income levels are meaningful, averaging 11 percent of household income and as much as 23 percent at the very top. These estimates come from a new analysis by the Center for Retirement Research that sheds light on a potentially important consideration that is often overlooked by people approaching retirement age. The highest tax rates are paid by the highest-income households because they often withdraw money from 401(k)s and IRAs to supplement their Social Security benefits. They must also pay capital gains taxes when they sell stocks and bonds for a profit from their regular financial accounts. Households with income in…

When a spouse or parent requires long-term care, quality is the top priority. But a report last year by the US Government Accountability Office (GAO) cited concerns about the quality of the federal data essential for monitoring the quality of care.  For example, three key indicators point to improvements: better nursing staff levels and clinical quality and fewer deficiencies in care that harm residents. Yet consumer complaints jumped 21 percent between 2005 and 2014, even though the number of nursing home beds has remained roughly flat in recent years. Anthony Chicotel, an attorney with the San Francisco non-profit California Advocates for Nursing Home Reform, said care quality is intertwined with affordability, payment sources, and dramatic changes under way in nursing…

It’s fairly easy to withdraw money prematurely from 401(k)s and IRAs – a practice that depletes roughly one-fourth of account balances over a worker’s lifetime. U.S. workers on average withdraw 1.5 percent annually from their retirement account assets.  When they do, they forgo years of investment gains they could have earned had they left their money alone. Early withdrawals can pose a problem for many Americans at a time financial security in retirement increasingly hinges on these defined contribution plans.  The potential for leakages has also grown in recent years, in part due to the shift away from traditional employer pensions to 401(k)s that place control in employees’ hands.  Further, the assets being held in IRAs, which have more libera…

Manuel Carvallo immigrated from Mexico at age 40 and became a U.S. citizen at 51.  The Georgia pension consultant just reached another milestone, accumulating the 10 years of U.S. work experience required to receive a small Social Security pension when he retires. Millions of immigrants from around the world who work here illegally could get the same opportunity as Carvallo under President Obama’s executive actions on immigration, which propose to give many of them temporary legal work papers and Social Security numbers.  Great uncertainty remains about where U.S. immigration policy is heading as Congress actively seeks to reverse the president’s administrative actions What is clear is that when undocumented immigrants – farm workers, hotel workers, and household and restaurant staff…

Two times more widows than widowers say their spouse’s death carried significant negative financial consequences during the first year after their loss. This sharp contrast recurred in numerous financial questions recently posed to widows and widowers by New York Life.  The contrast also seemed to persist across various income levels, in questions revolving around both essential needs and luxuries.  Here’s a sampling of answers given by nearly 900 Americans whose spouses have died sometime in the past decade: Their answers beg the question: Why the divergence? One reason is certainly that two-thirds of the widows surveyed reported their income was under $35,000, while a majority of the widowers earned more than that. Adults over age 18 were canvassed, so working…