Squared Away Blog

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…

When older workers change occupations, many of them move into a lower-status version of the work they’ve done for years, according to a new study by University of Michigan researchers who tracked the workers’ movements among some 200 different occupations. Aging computer scientists were likely to become programmers or computer support staff.  And veteran high school teachers started tutoring, financial managers transitioned to bookkeepers, and office supervisors became secretaries. Late-career transitions need to be put into some context: a majority of Americans who were still working in their 60s were in the same occupations they held at age 55, the study found.  And these occupations ran the gamut from clergy to life scientists to cooks. Interestingly, while teachers, thanks to…

The retirement issues facing black Americans can’t necessarily be lumped together for many reasons – there are high- and low-income blacks, and there are recent immigrants as well as longstanding families.  A similar problem arises when treating the U.S. Hispanic-American population or the Asian-American population as a homogenous group. Having acknowledged this, however, some recent studies have highlighted the financial challenges particular to each group.  For Hispanic-Americans, a major issue is that they live a long time but have low participation in employer retirement plans. For Asian-Americans, extremely high wealth inequality in their working population spills over into retirement inequality. This blog looks at the recent erosion in homeownership among black Americans since 2000, which threatens to further undermine their…

Finding a new job in one’s 50s is not that easy to pull off, and it’s risky if the new employer doesn’t work out.  But there’s a silver lining for people who can make the change to a job they feel is better: they work longer than those who don’t make a move. A new study by the Center for Retirement Research, which supports this blog, finds the probability that older workers remain in the labor force until they’re 65 increases considerably – by 9 percentage points – if they voluntarily made a job change sometime during their 50s. This lends credence to other research showing that when older workers voluntarily find a new employer, they often experience more job…

“I thought I was going to live forever.” “I would’ve probably put more money away for later years.” “I was a stay-at-home mom for 17 years, and I didn’t realize that during those years I wasn’t working I wasn’t accruing Social Security.” Millennials asked what it’s like to be retired, and seniors answered in this video produced by The New York Times. The video’s point, it seems, is that it’s not natural for 20-somethings to think about old age at all. “Retirement wasn’t in my vocabulary,” as one senior recalled about being young. That’s why young adults, as soon as they enter the work world, should force themselves to make friends with a concept far in their futures – and…

With so many Americans in the dark about how to prepare for retirement, educating them about why it’s critical to save seems an obvious way to tackle this problem. But very few solid studies prove that financial education actually works. This field research should be counted as a positive result for a modest, low-cost financial education program. Carly Urban at Montana State found that tellers and other low-level employees working at 45 randomly selected credit unions around the country clearly made progress after spending just 10 hours in an online financial education program. The information-based program required the workers to do some reading and walked them through specific examples and scenarios they might face. Their improvements weren’t limited to increasing their…

More Americans have health insurance, but they’ve also become increasingly worried over the past two years about how to pay for every aspect of their medical care. While the majority of insured adults still can afford their health care, the minority who say it’s “difficult” to pay their monthly premiums, doctor and prescription copayments, and deductibles is growing. Potential explanations for these concerns, revealed in a new Henry J. Kaiser Family Foundation poll, include rapidly rising prescription drug costs and the fact that employer-provided health insurance plans with high deductibles are far more common than they used to be. To be sure, the Affordable Care Act (ACA) has expanded Americans’ access to health insurance, and federal subsidies have made t…

Caps, gum surgeries, implants, dental exotica – all kinds of things can and do go wrong in retirees’ mouths. But dental coverage also drops sharply for older Americans, because when people retire, they give up their employer’s dental insurance. Without it, retirees needing dental work can face an unexpected, mini financial crisis. Medicare does not cover routine dental procedures, a fact that a majority of working baby boomers are unaware of. But most seniors also aren’t covered through a spouse or under, say, a union dental insurance plan for retirees. The private dental insurance market is their only option for care, and very few purchase it. Uninsured older Americans shell out $1,126 annually, on average, for dental work, which is…

The dangers of isolation in old age, the quest for a nice nursing home on “a boxed-wine wallet” – Annabelle Gurwitch approaches these issues with humor in a PBS NewsHour video that touches on themes previously covered in this blog. When Gurwitch and her sister started grappling with finding a new home for their parents, one that would provide care for them, the sisters faced some tough decisions – and their parents had to make difficult compromises. But when their father became very ill, something wonderful happened in their parents’ new community. ……

Just one in four of the low-income workers eligible for the federal tax credit for retirement saving are even aware that it exists. The IRS, as I said in a previous blog, practically “gives money away” through its Saver’s Tax Credit, which returns as much as half of the amount saved to the tax filer. The credit was designed to encourage the nation’s lowest-paid workers, who largely don’t save. Yet a survey last year by the Transamerica Center for Retirement Studies found that people who are not eligible for the credit know more about it than people who are eligible. There was a pervasive lack of awareness in three groups in particular: workers earning under $50,000, women, and people wit…

There’s new evidence to remind us that nothing much changes: we are still baffled by our DIY retirement system. And no wonder! First, saving must start at a young age, when retirement is an abstraction. Saving is further stymied by two big questions: how much to save and how to invest it?  It’s also smart to anticipate how one’s compensation arc might affect Social Security – taking into account, for example, that women withdraw temporarily from the labor force to have children and that earnings can decline when workers hit their 50s.  As we fly past middle age and retirement appears on the horizon, it’s a little late to figure this retirement thing out.  And there’s no plan for long-term…

Stark differences are emerging in the ways that workers, depending on how much they earn, are using the medical services covered by their employer health plans. While higher-income workers gravitate toward preventive and maintenance care, lower-wage workers visit emergency rooms far more often, according to a study published last month in Health Affairs.  The researchers pointed to one major culprit: a 67 percent increase in average deductibles for employer health plans since 2010. Employers usually offer the same health plans to all their employees. But the growing prevalence of high-deductible plans could be making making some low-wage workers think twice before seeing a doctor if they’ll have to pay the entire bill because they haven’t hit their yearly deductibles yet…