Squared Away Blog

New Jersey’s retirement income exclusion for couples leaped from $20,000 to $100,000 in 2016.  Minnesota and South Carolina now have income tax deductions for retired military. And Rhode Island started exempting the first $15,000 of retirees’ income from the state’s income tax. State taxes are one piece of the financial puzzle to consider when retirees – or Millennials – are thinking about moving to reduce their living costs, find a job or friendlier climate, or be close to the grandchildren. The Retirement Living Information Center recently compiled a nice summary of tax rates for all 50 states on its website. The information comes from sources like the Federation of Tax Administrators, The Tax Foundation and the National Conference of Stat…

Today, an ambitious financial education program operated by Delaware state government and the United Way of Delaware is bringing a message of financial empowerment for working people to a national stage. The organizations have partnered with Ted Talk in Wilmington, Delaware, to film 15 financial education videos. The videos will be livestreamed on Sept. 12 starting at 10:30 a.m. Eastern time. Since 2011, the state program, known as Stand by Me, has provided one-on-one financial coaching to some 16,000 Delaware residents, said Mary DuPont, who runs it. Today’s Ted videos grew out of DuPont’s 2016 presentation for Ted-X Wilmington. The videos feature various proponents of financial education, including Javier Torrijos, chair of the Delaware Hispanic Commission, who will tell his personal story…

The Medicare open enrollment period starting Oct. 15 applies only to two specific insurance plans: Part D prescription drug coverage and Medicare Advantage plans. But before choosing among various plans sold in the insurance market, the first – and bigger – decision facing people just turning 65 is whether to hitch their wagons to Medicare-plus-Medigap or Medicare Advantage.  Squared Away spoke with insurance broker Garrett Ball, owner of Secure Medicare Solutions in North Carolina, who sells both. Most of his clients buy Medigap, and he explains why. In a second blog post, we’ll interview a broker who deals mainly in Advantage plans. Another source of information about Medigap and Advantage plans are the State Health Insurance Assistance Programs.  Q:  Let’s start…

Saturday morning at a Boston-area farmers market. While hunger has eased among older Americans, millions still worry about having enough to eat from day to day. A new report by two non-profits – Feeding America and the National Foundation to End Senior Hunger – found that food insecurity among people 60 and older declined by a meaningful amount between 2014 and 2015, the latest year of data available. This marked the first decline since the Great Recession. Nevertheless, the percentage of the older population fitting the various definitions of being food insecure used in the report is much higher than in 2001.  In 2015, 15 percent of older Americans felt threatened by hunger – the broadest definition – compared wit…

U.S. stock market performance has implications for our entire retirement system – not just your 401(k). Three studies addressing the big-picture relationships between the market and retirees’ financial security were produced in 2017 by the Center for Retirement Research, which sponsors this blog. Here are summaries of each one: State and Local Pension Plan Funding Sputters in FY2016 – Public pension plan returns were very weak in fiscal year 2016. But even though stock market performance improved in 2017, it will be difficult to compensate for the plans’ funding shortfalls over the long-term: “To achieve more meaningful progress,” the researchers concluded, state and local governments “need to establish contribution levels that will actually reduce unfunded liabilities.” How Will More Retirees Affect…

The number of quality jobs held by workers with a two-year associate’s degree rocketed from 3.8 million in 1991 to 7 million in 2015.  Total employment over that time didn’t come close to that rate of growth. “There are still good jobs out there for workers who don’t have a four-year degree,” explains the above video by Georgetown University’s Center on Education and the Workforce. These jobs, which require a bit more education and training than high school, typically pay $55,000 per year. The video and accompanying report, released in late July, introduce a three-year project to document and analyze employment opportunities for people who do not want, or haven’t been able to obtain, a college degree. This blog will watch for…

The value of the informal care provided to the nation’s elderly, often by adult children, exceeds $500 billion a year – more than double the price tag for the formal care of nursing homes and home health aides. Only 6 percent of Americans are, at any given time, regularly helping parents who have deteriorating health or disabilities to perform their routine daily activities (and 17 percent will provide this care sometime during their lifetime). But a sliver of the population shoulders an inordinate amount of responsibility. A study by Gal Wettstein and Alice Zulkarnain of the Center for Retirement Research finds that the 6 percent of adults providing parental care devote an average 77 hours to their duties each month,…

The superlatives come fast and furious in the spate of reports coming out on the dwindling participation in the labor force by Americans still in their prime working years. The fall in men’s participation in the United States has been going on for decades but has been steeper here than in all but two advanced economies (Israel and Italy) in recent years. “We have won the race to the bottom,” says Nicholas Eberstadt, an American Enterprise Institute scholar and author of “Men Without Work: America’s Invisible Crisis.” A more recent drop in labor force participation for American women is “unique” – in the rest of the developed world, women’s participation continues to rise, according to a Brookings Institution report. Men…

When it comes to wealth, Asian-Americans aren’t much different than whites. The typical household’s net worth is around $133,000 in each group, and about 10 percent have no wealth at all. And like white America, Asian-American inequality is high and rising. Asian-Americans ranking in the top 10 percent (in terms of their wealth levels) have $1.45 million in savings and home equity – about 170 times more than those in the bottom 20 percent.  In the 1990s, the top 10 percent had 75 times more wealth. Given this high concentration of wealth, “many Asian Americans, especially Asian American seniors who need to live off of their savings, live in an economically precarious situation,” according to a Center for American Progress…

It took months for one girlfriend’s suitor to persuade her to get married. Another of my friends skipped marriage entirely and had two children on her own. Others married, had kids, and divorced, a status that seems unlikely to change for some as they age.  I married for the first time at 56. These anecdotes, about a random group of baby boomer women in the Boston area, illustrate some of the ways that women over the past half century have dramatically reduced the time they spend as part of a married couple. A new study being released today by the Center for Retirement Research at Boston College finds that “middle boomer” women born in the late 1950s can expect to…

                Who wants to spend their beach vacation reading about growing older? These recommendations just might surprise you. “The Accomplished Guest” by Ann Beattie Ann Beattie’s 1983 book of short stories, “The Burning House,” explored the drift, emotional detachment, and cynicism of boomers, whose worldview was darkened by Watergate. That book made Beattie’s reputation, and she has been prolific ever since, including regular appearances in The New Yorker.  Her 2017 short story volume, “The Accomplished Guest,” is, for now, a bookend to “The Burning House” (Beattie is only 69 and no doubt has more books in her). While baby boom skepticism remains a central theme, her characters have developed a little heart and…

Our 401(k) retirement system doesn’t work as well for lower- and middle-income workers as it does for those at the top. That’s because they face more severe headwinds in pursuit of their retirement goals, concludes a new study. Consider what happens when a worker’s earnings drop 10 percent or he experiences a bout of unemployment. These episodes are more common among lower-paid workers, and when they hit, they hit their 401(k)s harder than the 401(k)s of people who earn more, according to the study, “Defined Contribution Wealth Inequality.” In theory, 401(k)s could work for everyone – if everyone had access to an employer savings plan (which they don’t).  And while people who earn more money obviously have more to sock…