Squared Away Blog

  “No one will ever pay you what you’re worth,” Casey Brown says in the Ted video above. An employee’s value is also highest when unemployment is as low as it is now – 4.4 percent in April – and employers are scrambling to fill jobs. Why would an employer pay more than it has to? With unions all but extinct, the burden falls on individuals to ensure they’re paid fairly or well.  Low unemployment provides workers with more leverage to get what we deserve. Unfortunately, many of us are not good at negotiating how much we earn.  Or we avoid it entirely, because we’re uncomfortable with talking money – especially women. Women “say things like, ‘I don’t like to sing…

If employers want to improve the poor retirement prognosis for a large chunk of American workers, there are some obvious things they could do. That’s the big takeaway in Morningstar Inc.’s new report on employers that offer 401(k) plans to their employees but don’t do what’s required to encourage them to save enough. During the early 2000s, automatic enrollment to increase participation in employer 401(k)s became all the rage, and the strategy has proved itself. Today, nearly 90 percent of automatically enrolled employees stay where they are put, while only about half of workers sign up to save when 401(k) enrollment is strictly voluntary. But the auto enrollment trend has stalled, and the crazy-quilt private-sector retirement system still has a…

The U.S. retirement system is built on people having a working knowledge of finance.  Yet financial literacy among a big chunk of Americans ranges from unimpressive to abysmal. This revelation was again confirmed in a survey that recently debuted by financial literacy guru Annamaria Lusardi, head of the Global Financial Literacy Excellence Center at George Washington University. In a 2011 survey, Lusardi had found that too many Americans were unable to answer three very simple financial questions. This new survey is more ambitious, though the results are no more promising. It asks 28 questions in eight areas: earning money, budgeting, saving, investing, borrowing, insuring, understanding risk, and information sources.  In the nationally representative survey, about one in four people got…

No longer simply a convenience for shoppers, the internet has come into its own: it is now an ingenious tool for squeezing money out of our wallets. This realization first struck me last year while helping my brother and his wife in Chicago with a flight to visit our mom in Orlando. The reason I was on the case is that he’s a bit of a technophobe. But it turned out that his technical skills weren’t the issue – the airline’s website was the issue. To flyers’ chagrin, most airlines are now a la carte operations, charging separate fees for everything from baggage to potato chips. This makes it difficult to compare fares online – one way we might wind…

The U.S. Social Security Administration states on its website that it “is no longer prohibited from recognizing same-sex marriages for the purpose of determining entitlement to or eligibility for benefits.” Numerous disadvantages faced historically by the nation’s 800,000 same-sex partners are falling away in the wake of the 2015 Supreme Court decision legalizing marriage – access to Social Security’s benefits for a worker’s same-sex spouse or widow is just one. The financial gains from legalized marriage should also increase substantially over time, as more gays and lesbians are drawn out of cohabitation and into married relationships. A new study, by Urban Institute researchers Karen E. Smith, Stephen Rose, and Damir Cosic, estimates that by 2065 same-sex couples 62 and older with low or mid-rang…

Is long-term care insurance a luxury product? Today, most policies covering home care and assisted living and nursing care facilities for the elderly are purchased by people with relatively high earnings, according to a new survey. Long-term care used to be insurance that the middle class would buy – either individually or through an employer, union, or affinity group – when it was more affordable. But the market, which has contracted dramatically, also seems to be shifting, according to retirement experts and new data from LifePlans, a long-term care research firm. In LifePlans’ survey, 82 percent of the people who purchased long-term care policies in 2015 earned more than $50,000 per year. In comparison, only half of the general older population…

Rob Peters during a trip East last summer. Rob Peters’ approach to retiring wasn’t much different from hitting the road in 1975 to help drive a college friend from New York to California. He didn’t really know where he was going. When he first laid eyes on California, he was captivated by its beauty, as well as the left-leaning politics absent in the conservative Long Island community he grew up in. But Peters, equipped only with an English degree from the State University of New York at Buffalo, bounced around for years among the various part-time and full-time counseling jobs available to him in his new paradise. Not until age 38, after earning a master’s degree in counseling and 13…

Most people see multicolored chaos in the chart below, which is a visual representation of the returns each year to various types of investments. Morningstar Inc.’s director of quantitative research, Timothy Strauts, sees something else: the need for a diverse portfolio. Strauts, like most investment professionals, knows the Callan Periodic Table of Investment Returns. It has been around for 20 years and was just updated with 2016’s returns. Here’s how to read it. A colored square is assigned to each type of stock- and bond-market index. For example, the Bloomberg Barclay’s Aggregate (Agg) bond index is bright green, and the Standard & Poor’s 500 stock index is khaki green – the boxes also give each index’s return for each year. ……

Just one in three native-born and immigrant Hispanics working in this country has a retirement plan through their employers. If they do have one, three out of four save money in their plans, which is somewhat less than their coworkers. One reason for the first abysmal statistic is that many Hispanics and Latinos, recent immigrants in particular, hold down part-time restaurant or hotel jobs at very low wages. But even among Hispanics working full-time, access to an employer savings plan is still much lower (44 percent) than it is for their white and black counterparts (more than 60 percent). Low rates of saving are compounded by the fact that elderly Hispanics and Latinos will need more money over their longer-than-average retirements.  A 65-year-old…

Illustration by: Kjell Reigstad   Interest in the student loan problem from the media and politicians seems to be ebbing. The issue does not go away for Joshua Roiland. Every day, money worries grind him down – him and millions of other young adults working through the emotional fallout and shattered relationships caused by debt. Roiland owes $200,000-plus and earns only $52,000 as a newly minted University of Maine journalism professor. He begins his article on Longreads by describing a 340-mile round-trip drive to a clinic in Lewiston, Maine, that pays him $50 for a pint of his youthful blood. ……

Remarkably, middle-class Americans have at least as much money tied up in their homes as they have in all their retirement plans, bank accounts, and other financial assets combined. A hefty share of older U.S. homeowners are even better off: 41 percent between ages 65-74, and 63 percent over 74, have paid off their mortgages and own their homes free and clear. But only one in five retirees would be willing to use their home equity to generate income in a new survey by the National Council on Aging (NCOA). This reluctance seems to be on a collision course with financial reality for working baby boomers, when so many are at risk that they won’t be able to maintain their…

A couple years ago, Daniel Cooper noticed something at the commuter rail station near his home in suburban Boston.   A lot of parents were dropping off their adult children every morning to catch the train into the city. This fit with something he’d been thinking about as a Federal Reserve senior economist and policy adviser interested in macroeconomic issues like the housing market.  Are millennials living with their parents longer than previous generations?  And, if so, why? His suspicion was confirmed in recent research with his colleague at the Boston Federal Reserve, María Luengo-Prado. They found that, on average, 16 percent of baby boomers born in the late 1950s and early 1960s lived with their parents when they were between…