Squared Away Blog

Young people in the noon yoga classes here at Boston College bend, twist, or flatten themselves more easily than their much older classmates. But older people are better savers – 50-year-olds save at more than double the rate of 40-year-olds – and perhaps yoga can explain how this happens. In yoga, one doesn’t immediately balance into Warrior III without toppling over or find the upper-body strength for the Crow pose shown above. It takes practice to build the balance, strength, focus, or flexibility that each pose requires. Only with time do these pretzel-like configurations become less painful and more convincing. Poorly executed poses, practiced and repeatedly improved, are the only path to perfection. Like yoga, saving is also a practic…

It is the most important source of retirement income for most workers. Yet too many older Americans lack a basic understanding of certain aspects of Social Security benefits. In fairness, many people got some key questions right in a survey that quizzed them about the program’s rules and incentives. But a significant minority, and sometimes a majority, revealed a poor understanding of several major features of the program. As the researchers note, misunderstanding Social Security benefits could lead to poor financial decisions about retirement. They analyzed responses by more than 2,300 people – all between ages 50 and 70 – to a nationally representative survey administered online in 2008. The survey, which took about half an hour, started with basic…

Mistakes made during initial Medicare enrollment can be costly. Someone with on-the-job health care coverage who enrolls at age 65 may be paying Medicare premiums unnecessarily. Even worse, retirees who sign up too late incur a penalty for life. “If you’re actively working, that’s the only reason you can enroll late in Medicare” without paying the penalty, Medicare trainer Andy Tartella says in the above video, “The ABCD’s of Medicare,” produced by the Centers for Medicare and Medicaid Services (CMS), an agency of the U.S. Department of Health and Human Services. Medicare has been around for exactly 50 years. But enrolling in the program is a new experience for every single American who turns 65.   To navigate Medicare enrollment and…

Two important U.S. Supreme Court decisions in two years removed not only the obstacles to same-sex marriage but also most of the financial inequities couples faced. The June decision upholding same-sex marriage opened up financial advantages of marriage that either had been completely unavailable to gay and lesbian couples or were complicated by marrying in a different state than the state in which they live. The decision came on the heels of the high court’s 2013 ruling against sections of the federal Defense of Marriage Act, a ruling that made Social Security benefits available to gay and lesbian couples in states that permitted them to marry. In the wake of these decisions, “If marriage is an option and it makes…

It’s hardly surprising that debt causes stress, but this condition seems rampant among the college crowd. A new study in the Journal of Financial Therapy finds that nearly three out of four students feel stressed about their personal finances, and student loans are a big reason. In 2012, the average graduating senior owed $29,400. Student debt has already been shown to be a barrier to homeownership and a cause of bankruptcy among young adults. Paying back the loans is also very difficult when borrowers don’t graduate and earn less in their jobs. Add stress to the host of issues that accompany borrowing for college. Students who have debt or expect to be in debt after college – whether college loans, credit…

It’s customary every six months for Squared Away to round up our readers’ favorite blogs. The following were your top picks during the first six months of 2015, based on an analysis of online page views. To stay current on blog posts in the future, click here to join a once-weekly mailing list featuring the week’s headlines on Squared Away. Retirement is a perennial favorite among readers. But the top 10 list below also includes blogs about financial education and knowledge of the U.S. retirement system, longevity, and the hardships specifically faced by older workers: ……

Baby boomers face a Catch-22. Many boomers will have to stay employed longer than they’d hoped to close the gap between what they’ll need in retirement and what they can realistically afford. Yet the job market is tough for job-hunting older workers, and if they are employed, wages stagnate or decline when people get into their 50s. A new report by the AARP Public Policy Institute shows the continuing toll on workers ages 45 and older who have suffered a bout of unemployment since the onset of the Great Recession. Lower pay, fewer hours, or more limited benefits in their new jobs and a prolonged inability to find any job are plaguing these workers. AARP found that only half of those hit…

Knowing how to budget or invest one’s retirement savings are useful skills. But managing money isn’t just about what you know – it’s also about how you feel. That’s the gist of a handful of recent studies into a newly identified emotion known as financial anxiety. These early studies look at two things: 1) is financial anxiety real?; and 2) does it explain why people do things like avoiding money issues or going into debt to paper over their financial problems? The evidence says yes to both questions. A 2012 study established financial anxiety as an identifiable psychological condition that can be measured using a standard psychological test. The researchers gauged their subjects’ reaction times to pairs of words flashed…

The “longevity economy” (i.e., aging baby boomers seeking long lives) meets “the quantified self” (tracking everything we do online) in the above video about technologies that help aging boomers stay fit. The PBS video shows off some of the products being developed to cater to an enormous market of some 100 million Americans over age 50, who are spending about $7 trillion per year. Products include a treadmill desk, technology that reveals sleep patterns, and fitness watches measuring everything from blood pressure to how many steps are walked daily. One issue not mentioned is the privacy around health matters that boomers sacrifice when their every move and personal health metric is a digital data point stored in the cloud. Younger…

Americans have been labeled everything from the Greatest Generation to Generations X, Y, and Z. Are you ready for the Centenarian Generation? The number of 100-years-olds has roughly doubled over the past two decades to more than 67,000 – mostly women – and the U.S. Census Bureau predicts it will double again by 2030. Just think about the implication of living for a century: retirement at, say, 65 means 35 years of leisure. This is unappealing to some, unaffordable to many, and it impacts us all. “We’ve added these extra years of life so fast that culture hasn’t had a chance to catch up,” Laura Carstensen, director of Stanford University’s Center on Longevity, said during a panel discussion at a…

Redlining, subprime mortgages sold in minority and immigrant neighborhoods, higher interest rates on car loans – black Americans have reason to distrust the financial system. This spills over into their retirement planning, specifically their relationships with financial planners and how much they save, concludes a study in The Journal of Personal Finance. Among the findings is that blacks and, to a lesser extent, Latinos have difficulty trusting planners. Past research shows trust can play an important role in financial decisions. People who trust the stock market, for example, are more likely to invest in stocks. But black Americans start out with generally lower trust levels: nearly half reported “low trust,” compared with only about one-quarter of whites, according to t…

These federal government resources should be helpful to Squared Away readers ranging in age from 20 to 70: Free credit report: Young adults in particular may not be aware they’re entitled to a free credit report from one of the major credit rating agencies. To ensure the report truly is free, click and follow the links to an outside source recommended by the Federal Trade Commission. To file a paper request or ask for a report by telephone, try the federal Consumer Financial Protection Bureau’s website. New U.S. Social Security Administration blog: The agency started a new blog last month to provide important benefit information under various programs. Here’s a sample of three useful articles on the blog: Replace dog-eared Medicare cards…