Squared Away Blog

U.S. workers’ enthusiasm for saving money for retirement is lukewarm. But that doesn’t go very far in explaining why only three out of every 10 Latino workers are participating in an employer retirement plan, typically a 401(k). The major reason is that most of them do not have a retirement plan because they are employed in low-wage blue-collar or service industries – roofing, dishwashing, food preparation, landscaping, hotels, maid and janitorial services. These types of jobs are often filled by recent or undocumented immigrants and do not include any employee benefits.  The Economic Policy Institute estimates that only four out of 10 Latino workers have a retirement plan in their current jobs. In that light, the bulk of the individuals…

German legislation that increased the federal pension credits given to mothers has influenced their decisions about working in middle age, years after their children were born but long before retirement age. This finding from a recent study adds to what is currently understood about how changes made to future pensions can affect how much workers choose to work now or when to retire. Previous research tended to gauge the impact of pension reforms on individuals who are closing in on their retirement years. This study focuses squarely on the behavior of mothers who are mostly in their early 50s, when workers are just starting to get serious about their retirement plans. The retirement benefits paid to German workers by t…

Too many retirees of color are in the financially precarious state between outright poverty and barely getting by. Far larger shares of the nation’s Latino, Black, Asian, and Native American retirees are financially insecure than Whites, according to a new report confirming the now-familiar racial disparities that face both workers and retirees in this country. But what also stands out in this report, produced by The Gerontology Institute at the University of Massachusetts, Boston, is the gaping disparity between retired single people and married couples. First, consider older White Americans. They are in the best position financially. Yet about two in five single White retirees are financially insecure, while only one in five couples is. Single Latino retirees are muc…

In COVID’s early months, applications to two of Social Security’s assistance programs fell sharply. The decline was nearly 30 percent in the spring and summer of 2020 for the monthly cash payments from the Supplemental Security Income (SSI) program to the families of children with disabilities. And applications for disability insurance benefits by adults with disabilities who could no longer work fell by more than 7 percent. Two recent studies reached a similar conclusion about what went on. A major reason for fewer applications was Social Security’s decision to close its field offices during COVID in March 2020, which eliminated the ability to apply in person for the benefits. Specifically, Mathematica researchers found, applications to the SSI and disability insuranc…

The formula for calculating Social Security benefits recognizes that it’s more difficult for lower-paid workers to afford retirement. Their future retirement benefits will replace a higher percentage of their earnings than, say, a corporate executive will receive. But workers in similar jobs who live in expensive coastal cities are at a disadvantage: steep housing costs. Workers’ wages aren’t keeping up with rising house prices, and that inherent disadvantage doesn’t go away when they retire. But this study looks specifically at how well Social Security’s progressive benefit formula protects older Americans in high-cost cities.  Having to pay high housing expenses will put workers who are currently in their mid-50s at only a slight disadvantage when it comes to Social Security benefits…

During COVID, some companies that instituted remote work were almost giddy about the increase in employee productivity. Workers themselves were certainly convinced of this. One interesting aspect of this study may be a clue to the reason for sagging productivity. The least productive day for the data-entry workers at home was Monday, because they were required to come to the office to upload the data they’d entered the previous week and to get their next assignment. Back at home, their hours increased as the work week progressed and spilled into the weekend. The largest blocks of work occurred on Saturday and Sunday – apparently in preparation for going into the office on Monday. The remote workers also started around 10…

For many people, “The only community that is left to support this group is their LGBTQ friends and allies,” said Philippe Saad, an owner of DiMella Shaffer, The Pryde’s design architect. “We’re not building the building and bringing in the people. Knowing who the people are, we are building the building for them,” he said.    DiMella and a national real estate developer, Pennrose, plan to open the 100,000-square-foot renovated school building next spring. More than 900 people have expressed an interest in The Pryde, and the residents will be selected in a lottery for the 74 apartments. Non-LGBTQ retirees are also welcome to apply for residence. Saad’s firm’s specialty is senior living projects that meet the needs of older…

Going back to work after relying on federal disability can be fraught with uncertainty. Some people experience a smooth transition, while others may have trouble becoming self-sufficient after their skills deteriorate and professional contacts dwindle. Researchers at Mathematica examined how people fare in the labor force after their benefits end. This can happen for one of two reasons. First, Social Security stops paying benefits if one of the agency’s periodic medical reviews determines that a health condition has improved to the point where the individual no longer medically qualifies. The second reason is that Social Security limits how much beneficiaries are permitted to earn. In order to encourage them to return to the labor force, the agency provides a set…

The stories are harrowing. In complaints to the federal government, retirees describe the costly errors in medical billing that they struggle, often unsuccessfully, to straighten out. One low-income person was told, during his cancer treatments, that they weren’t covered when in fact the hospital wasn’t processing his Medicaid coverage. Another retiree submitted letters to a specialist’s office over a two-year period explaining – with supporting insurance documents – why he didn’t owe the doctor the money he’d been billed for a test. Someone else, while being whisked to the hospital in an ambulance, provided his Medicare and supplemental insurance cards during the ride. He never got a bill – just a call from a debt collection agency. Finally, one retir…

Researchers will present studies funded by the U.S. Social Security Administration (SSA) that meet the agency’s goal of understanding and addressing the racial disparities in the economy and in federal benefit policies. The studies will be presented over Zoom by researchers from around the country. There is no charge for attending the Aug. 3 and 4 event but registration is required. The full agenda for the meeting is posted online. The gap between Black and Hispanic Americans’ wealth levels and White wealth is well documented. But one study to be presented examines a specific aspect of the racial wealth gap: differences in the use of the tax deductions workers receive for putting money into an employer 401(k). White workers, for example,…

This was 2022 in a nutshell: more people are saving for retirement but they’re not saving nearly enough. Every year, Vanguard releases its report on the state of the nation’s habits around saving for retirement. Participation among workers with access to 401(k) plans has jumped over the past five years from 72 percent to 83 percent in 2022, according to the newest report on the 401(k) plans in Vanguard’s large client base. Some credit goes to the growing popularity among employers of automatically enrolling workers in their plans. Under this corporate policy, employee participation in 401(k)-style plans is 93 percent, versus just 70 percent when they don’t get that nudge and are left on their own to decide whether to…

The chronic medical conditions and musculoskeletal problems that afflict workers of all ages have far-reaching effects on the labor market and the federal disability program that economists are trying to understand. The following three studies focus in on specific aspects of the workers who apply for disability benefits. “Workplace Injuries and Receipt of Benefits from Workers Compensation and SSDI”: In most states, Social Security disability benefits are supposed to be reduced if the benefits, when added to private workers’ compensation payments, exceed 80 percent of the injured worker’s current earnings. The researchers, by combining Social Security data with workers’ comp payments for people with permanent workplace injuries, find that the share of Social Security recipients whose monthly payments are being…