Squared Away Blog

Investors will probably see good news in Morningstar Inc.’s annual report showing that the fees charged by actively managed mutual funds continue to come down. The truth is that focusing on fees alone misses the point. What matters is a fund’s after-fee return. There are always fund managers who excel at picking stocks and can deliver strong after-fee returns to investors year after year, justifying the high fees required to pay them. The early years of Fidelity’s Magellan fund is the classic example. The trick is finding that clever manager, which requires a combination of luck and the skill and inclination to compare numerous investment options. One thing making this task a little easier is the mutual fund industry practic…

Millennials’ reliance on their parents, retirement finances, and long-term care – Squared Away readers had some serious topics on their minds during the first half of the year. Here are the 10 most popular blogs, ranked by the number of page views each received between January and June: Retiree Benefits: Tale of 2 Cities (and States) Get Dental Work Before You Retire Long-Term Care Insurance Goes Uptown Long-Term Care on a Boxed Wine Budget The Benefits of Late-Career Job Changes Retirees Don’t Touch Home Equity People Lack Emergency Funds, Tap 401(k)s Managing Money with Cognitive Decline Why Parents’ Home is the Millennial Crib Our Stubborn State of Financial Illiteracy ……

The first study known to look at changes over several decades in lifetime earnings for the nation’s workers shows a dramatic trend: women are up and men are down. The oldest people studied, mostly men, began working in the 1950s, when the post-war U.S. economy was going full throttle, and they started retiring in the 1980s when the industrial economy was only in the early stages of a protracted decline. The youngest workers studied are “middle” baby boomers, who came of age during the twin 1980s recessions in heavy industry and experienced the rise of the service economy and two high-tech booms and busts. Over this time period, men’s earnings went through two distinct phases.  In the first phase –…

Credit card companies usually set small-dollar minimum payments, so there’s really no excuse for incurring fees for late card payments. Yet many consumers fail to pay on time. In a new study, British researchers found a no-brainer solution that is highly effective: setting up automatic payments of our credit cards. The researchers started out with a different premise: that customers might learn, over time, to prevent maddening late fees after having to pay them numerous times. The researchers roundly rejected this after following nearly 250,000 U.K. credit card holders over two years.  When it comes to late fees, we do not learn from our mistakes. What they noticed, however, was a clear distinction between card holders who incur late fees…

My husband has taught high school biology for 30 years in Boston and works hard for his students. But he’s nearly 64 and it’s time to think about retiring. Can we afford it? When we retire, will we eventually run through our savings? Is retirement scary – or what? Questions like these are also probably haunting millions of baby boomers in the middle of the night. One out of three boomers in a recent Transamerica survey said they are not confident they will have enough income to retire “comfortably” and another third concede that they are only “somewhat confident.” To find the answer for ourselves, my husband and I hired a financial adviser. It was the best thing we could’ve done. T…

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…

Now comes the toughest part of borrowing money for college: paying it back. There is much for this year’s crop of graduates to learn.  For example, the federal government gives you a reprieve after graduation, usually six months, before requiring you to start repaying your debts. But did you know that interest builds up during this “grace period”?  Starting payments right away reduces how much you’ll have to pay back. Making repayment mistakes or not having a plan can also be very costly.  Click here for some tips to avoid these mistakes. Here’s another issue: women borrow slightly more money for undergraduate degrees than do men but earn less after college and seem to have more difficulty paying back their…

In the 19th and early 20th centuries, it was not unusual for older Americans to live with their adult children and grandchildren. But more seniors could afford to live on their own after passage of Social Security and then Medicare. By the 1990s, fewer than 10 percent of people over age 65 lived with relatives, usually offspring.  This number has crept back up to around 12 percent in recent years, according to an analysis by the Center for Retirement Research. Economic disadvantage is the common thread among older people living in these multigenerational households, a new study finds. This held true whether the seniors moved in with their adult children and grandchildren or the offspring moved into their parents’ homes…

Wolf pups are born in late spring and early summer in Denali National Park in Alaska. No better time than retirement to take in our national parks at the leisurely pace they deserve. At age 62, Americans can purchase a $10 park pass that is a life-time ticket to the magnificence of Glacier National Park, bison calves grazing with their mothers at Yellowstone, or peregrine falcons nesting at Acadia. But get the pass soon, though, because AARP reports the price will increase to $80. Many people don’t learn the pass exists until they visit a national park where a ranger might or might not offer one.  The passes, which are issued by the National Park Service, include free access to…

As the post-recession job market continues to improve, so has young adults’ optimism about their future opportunities, a Federal Reserve Board survey shows. What’s poignant about this youthful optimism is that a changing labor market is making it increasingly difficult for young adults to get their careers off to the right start. Surely, they sense this. Nearly two-thirds of adults between ages 18 and 30 told the Federal Reserve in a 2015 survey featured in a recent webinar that their schedules in “permanent” jobs were changing daily, weekly, or monthly. They strongly prefer future job stability over higher pay, despite the trendy flexibility of the “gig” economy, Uber driving, and freelancing. “Permanent employment is not the same as stable employment,” Amy…

It’s now a given that more people in their 60s and 70s are choosing to keep working. But a related trend rumbling beneath the surface isn’t so well-known: the share of working older people with full-time jobs has increased sharply – to almost 61 percent in 2016 from 40 percent in 1995 – as part-time work has become less popular. The majority of older Americans are retired. But among those who do work, the move from part-time to full-time is “a major shift” in work schedules, concluded the Brookings Institution’s Barry Bosworth and Gary Burtless and George Washington University’s Ken Zhang in a report last year.  This is one aspect of the broader trend of rising labor force participation for…

Hercules sculpture, Florence, Italy. Medical bills are leaving “a lasting imprint on families’ balance sheets,” JP Morgan Chase concludes from its recent analysis of the anonymous checking and credit card account activity of some 250,000 bank customers. With little available cash on hand, 53 percent of these families prepare to pay large, one-time medical expenses by waiting for an uptick in their income. Nevertheless, a year after the bill is paid, they are still struggling to patch the hole blown in their household budgets, according to the report, “Coping with Costs: Big Data on Expense Volatility and Medical Payments.” The 2013-2015 account data show that family incomes tend to be 4 percent higher, on average, in the month a medica…