Retirees Spend Less on Medications as Other Medical Costs Rise

Today’s retirees typically spend about a third less on medical care than retirees did back in 2004, according to new research. Workers who are over 55 but not yet eligible for Medicare are spending somewhat less too. Two policies have reversed the trend of years of rising costs: the introduction of Medicare’s Part D prescription drug coverage and the Affordable Care Act (ACA), which expanded Medicaid to more low-income workers and made private insurance somewhat more affordable for the people who don’t have coverage through their jobs. But behind the 20-year decline in healthcare spending, adjusted for inflation, is another fact of life: healthcare costs increase as people age, and some people are luckier than others. Consider older workers and…

July 13, 2023

State IRA Programs Improve Odds That Firms Set Up a 401k

Seven states now require employers that don’t have retirement plans to automatically enroll their workers in an IRA, and others have passed legislation to create similar programs. The goal is to get more people to save for retirement at a time financial security in old age increasingly depends on it. Pensions are rapidly disappearing. But only about half of working people are currently saving enough to maintain their standard of living when they retire. A major culprit in the savings shortfall is that workers do not consistently have access to a retirement plan through their jobs. The share of workers with employer plans has barely budged in decades. Information about how employers might react to the state IRA mandates is…

July 11, 2023

Unforeseen Consequences: the Americans with Disabilities Act

In 1990, Congress granted people with disabilities the same federal protections against employment discrimination that the Civil Rights Act of 1964 had provided on the basis of sex and race. The Americans with Disabilities Act (ADA) also added a second level of support: employers must find ways to help the disabled perform their jobs. This was watershed legislation that has made life easier for millions of workers by requiring employers to provide assistive devices or otherwise accommodate their disabilities. The law is also the basis of a growing number of federal lawsuits against employers to provide remedies if they’ve been discriminated against. But research that first started appearing right after the ADA passed has shown that employers cut back on…

July 6, 2023

Happy Fourth of July!

The staff here at the Center for Retirement Research at Boston College who write and produce this blog send our wishes for a festive July 4th and safe travels for people driving long distances to reconnect with family.  Squared Away writer Kim Blanton invites you to follow us on Twitter @SquaredAwayBC. To stay current on our blog, please 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. This blog is supported by the Center for Retirement Research at Boston Colleg…

July 4, 2023

Food Security Better with Food Stamps than Cash Payments

The notion in policy circles that governments should provide in-kind benefits, rather than cash, is often framed as being impractical or even unfair. The proponents of cash payments argue that people should be able to choose how they spend their money. A new paper presents the opposite side: Sometimes people are better off with in-kind benefits. The in-kind benefit in this study is food stamps, and the researchers detected increases in food insecurity when state governments decided to provide cash assistance instead of food stamps. The motivation for this study is the 1974 introduction of the Supplemental Security Income (SSI) program, which paid cash directly to the low-income elderly and to people with disabilities. When Congress passed SSI, the federa…

June 29, 2023

Retirement: Depressing or Uplifting? It’s Up to You

The impact of retiring on mental health is very hazy. So many considerations factor into whether people retire that it’s difficult to predict how it will go. Some are uplifted by finally getting out from under a bad situation while others gets depressed because they’ve lost their purpose or important social connections. Reactions to being retired depend on, among other things, the person’s health, whether the job is fulfilling or physically very strenuous, and whether they’ve planned for how to fill the days. So it seems important to figure out why some people thrive in retirement while others become depressed. Financial considerations are, of course, central to the timing. But money aside, my own experience watching 60-something friends tells m…

June 27, 2023

Is It Truly Wheelchair Accessible? This App Has Answers

Restaurants are equipped with all sorts of obstacles too. Room to maneuver around the tables? Will my wheelchair arms fit under the table? Did the designer of the bathroom ramp and oversized stall fail to install grab bars? And what if I drink a lot of water and then learn that the “accessible” bathroom doesn’t work for my unique needs? “I’ve experienced all of it,” says Jake Haendel. “I’ve had a lot of anxiety about going out because I didn’t know what would meet my needs. They say it’s ‘accessible’ but it’s a meaningless term.” And that wheelchair icon? “They slap it on everything,” he said. Haendel, who has an extremely rare neurological condition that ties him to a wheelchair…

June 22, 2023

One in Four Households Unaware They Should Start Worrying About Retirement

Americans’ retirement outlook doesn’t change all that much: one standard measurement consistently shows that roughly half of working-age households may not be able to afford their current lifestyle after retiring. But do they even understand what condition their retirement finances are in? This is a critical question because perceptions can affect how much people will save for the future.   The good news is that about 60 percent of working-age couples and single people are getting it right, the Center for Retirement Research finds. In other words, they predict, accurately, that they’re in trouble or that they’re in pretty good shape. But that leaves significant numbers who are either over- or underestimating how much money they will need to retir…

June 20, 2023

Lifelong Disadvantages Limit Equity for Older Black Homeowners

The historic discrimination that has limited the ability of older Black Americans to accumulate wealth has been present in every aspect of the housing market. They have paid a steep price. By the time they reached their mid-50s, they had $90,000 in home equity – or about $57,000 less than White homeowners – according to a new study of people who purchased houses between 1980 and 2000. The barriers to building up housing wealth started early for the Black homeowners. As young workers, they tended to earn less, and their parents usually had fewer resources to contribute to a down payment, a crucial factor in what they were able to buy. They also faced mortgage discrimination, and when they did…

June 15, 2023

Barriers to Advantage Plans’ Mental Health Coverage

Retirees tend to use mental health services less than the general population. On the bright side, people get happier as they age and may not need a therapist. However, treatment is also expensive, and retirees may be unaware that Medicare covers psychiatrists, psychologists, and in-patient and out-patient treatment. Retirees with Medicare Advantage insurance policies face another obstacle: ghost networks of mental health professionals that the insurer claims to cover. A new report by the Senate Finance Committee, based on a sampling of 12 Advantage plans in six states, determined that only about 20 percent of the people with these policies who seek services would be able to make an appointment because a majority of the plans’ lists of in-network therapists…

June 13, 2023

New Documentary an Intimate Portrait of Workers’ Trials

The seemingly random patterns in low-paid and middle-class workers’ struggles are assembled into a cohesive narrative supplied by people who let the camera in for an intimate look. A few top executives are thrown in to highlight the economy’s inequality, which lower-paid workers like Randi recognize as deeply unfair. Randi, a health care aide in rural Mississippi, explains in a new documentary that her job “pays little and works you to the bone.” Produced by Netflix, “Working: What We Do All Day,” is narrated by former President Barak Obama, who occasionally talks about his middle-class family, interviews some of the featured workers, and explains the economic shifts – globalization and the explosion in Wall Street wealth in the 1980s –…

June 8, 2023

Auto-enrollment is Highly Effective But Often More Costly

Automatically enrolling all new workers in an employer savings plan is a terrific way to push reluctant savers to prepare for a future in old age. They still have the option of withdrawing but usually stick with the plan once an employer signs them up. The preliminary results of a new study on Army personnel show just how effective auto-enrollment is. The strategy far outstripped other, less interventionist tactics that employers use to increase plan participation. In 2018, the U.S. Department of Defense implemented auto-enrollment in the federal Thrift Savings Plan for U.S. Army recruits and other new employees and started deducting 3 percent of their pay to deposit into their savings accounts. The plan participation rate for the new…

June 6, 2023