Squared Away Blog

It’s old news that the many baby boomers who did not get married and stay married are worse off financially than those who did. Unfortunately, the financial damage to one segment of this generation has broken new ground. Only 44 percent of “middle boomers” – those born in the late 1950s – have remained married to their original spouses, down from 52 percent of their parents’ generation. Middle boomers are also far more likely to have lived with partners without marrying, remained single all their lives, or even to have divorced twice. The heart of a study is determining which of middle boomers’ choices were most likely to have led to financial distress when they reached their pre-retirement years. About 11…

Maintaining a network of family, friends, or even golfing buddies is critical to cognitive and physical health in old age, research has shown. What wasn’t known is how work affects the social lives of older people. Does work foster social ties or limit the time one has to socialize? A new study by Eleonora Patacchini at Cornell University and Gary Engelhardt at Syracuse University finds that those who continue to work have larger social networks. They analyzed responses to the following question by more than 1,300 survey participants in the National Social Life, Health and Aging Project. The participants were ages 57 to 85 in 2005 and answered the following question then and again in 2010: “Most people discuss things…

When between 45 percent and 60 percent of Americans don’t have enough money for retirement, encouraging saving is a national priority. A related issue is preserving the funds once they’re set aside. A survey released last month by Transamerica indicates that workers frequently resort to hardship withdrawals and loans from their 401(k)s, because they lack the cash required in emergencies. The survey bolsters the argument made by some retirement experts and employers that until workers’ cash-flow problems are addressed, many will continue to view retirement funds as their best option in an emergency. More than one in four U.S. workers in the survey said they have taken premature withdrawals from their 401(k) or IRA retirement funds.  Catherine Collinson, president of…

The number of Americans over age 60 who are paying back federal or private student loans has reached a critical mass, quadrupling to 2.8 million over the past decade, a new report finds. These older borrowers owe $23,500, on average, and two-thirds of them also have mortgages and credit card bills at a time their medical expenses are typically increasing, according to the report issued this month by the Consumer Financial Protection Bureau (CFPB). Separately, nearly 40 percent of those with federal loans have defaulted on their payments. The response of many older student loan borrowers, the CFPB said, is to “skip necessary health care needs such as prescription medicines, doctor’s visits, and dental care because they could not afford…

Having dug ourselves out of the worst financial crisis since the Depression, the nation entered 2017 amid rising wages and record-low unemployment.  Yet three out of four adults report being “financially stressed.” And no wonder: half of the 2,000 adults in the December survey by the National Endowment for Financial Education (NEFE) said they are living paycheck to paycheck. Americans’ specific financial issues are routinely documented in this blog and run the gamut from cash-flow shortages to poor retirement prospects. The primary sources of financial stress identified in the NEFE survey were not enough savings and too much debt.  This was consistent with a second finding in which respondents said that solving these issues would also provide the most “financia…

Minimum-wage workers in 21 states and Washington D.C. will have larger paychecks this year. But it’s still extremely difficult to eke out a living on the minimum wage, as demonstrated by this video game. The game, “Spent,” was actually the topic of Squared Away’s very first blog in 2011 and is worth featuring again. The Urban Ministries of Durham in North Carolina designed Spent a few years ago so others could see how it feels to live on about $300 per week – the weekly income of those earning the federal minimum wage of $7.25 per hour but at the low-end in many states.  The game conveys the very real, sometimes impossible, financial choices faced by working men and women…

The Knapkes hiking last May in the Rocky Mountains. Heather and Tyson Knapke were like a lot of young couples starting out: they were in debt. One household expense on their credit cards loomed larger than all the others: at least $1,000 every month for groceries and dining out. Some weeks, the Denver-area couple could be found at their various favorite restaurants Thursday night straight through Sunday night. The food budget “was astronomical, and I had no idea,” Heather said. Their lives changed dramatically after realizing about 2 1/2 years ago that their finances were spinning out of control. How this couple transformed their debt-laden household into one that is free of credit card and college debts and has a…

The 10 articles that received the most attention from our readers last year are ranked below in the order of their total page views.  Retiree taxes and Medicare made up the top three: Why Most Elderly Pay No Federal Tax Medicare Advantage: Know the Pitfalls Federal Taxation Drops for Retirees Financial Fallout from Gray Divorce Stress is One Reason People Retire How Many Years Can You Do Your Job? ……

Squared Away writer Kim Blanton invites you to follow us on Twitter @SquaredAwayBC.  To stay current on our Squared Away blog in 2017, we also invite you to join our free email list. You’ll receive just one email each week – with links to the two new posts for that week – when you sign up here.      …

My mother sent an anxious email that included the above picture, which one of her elderly friends had emailed to her as a warning about coming tax increases. “Have you seen this?” my mother asked in her email. I’m glad she inquired, because it took 15 seconds to learn on factcheck.org that this misleading information has made the rounds on the Internet for three years in a row, updated to the new year – 2017 this time. There are nuggets of truth in the misinformation above. The Medicare tax already increased as part of the Affordable Care Act. However, it applies only to employed couples earning more than $250,000 and employed individuals earning more than $200,000. The retirees living in my mother’s…

Apprenticeship programs in the United States are largely found in just a few unionized skilled trades: construction worker, plumber, electrician. But a recent panel made up of British and American employers and other experts made the case that U.S. employers in myriad professional fields – health care, social care, information technology, law, medical exercise therapy, lab technician, teaching assistantship, nursing, and finance – would benefit from thinking more creatively about providing apprenticeship training. Apprenticeship programs are much more common among U.K. and other European employers. Microsoft Corp. is a big exception here: its U.S. program, modeled on what the company does in Europe, will graduate 1,000 apprentices next year, said Bill Kamela, Microsoft’s policy counsel for U.S. government affairs. Apprentices “have incredib…

More than half of older Americans with the lowest socioeconomic status can expect to face an income gap if they retire when they’re planning to. That finding is from a study by the Center for Retirement Research, which supports this blog. The researchers quantified and compared the gaps in the retirement preparedness of more than 3,000 older U.S. households, grouped by four levels of educational attainment. First, the researchers estimated the target income that each working household will need in retirement to maintain its current standard of living.  That target income will be less than its current income from working, because retirees no longer need to save money, and they pay less in taxes.  Then, the researchers projected the incom…