Squared Away Blog

In case anyone has forgotten, buying a home can be damaging to your financial health. But prospective first-time homeowners may want to take advantage of still-low mortgage interest rates and the recent, slower increases in house prices.  Homebuyer classes can provide an excellent crash course in the mysteries of mortgages, maintenance, taxes, and risks – information that can help preclude the kind of mistakes made during the subprime mortgage crisis. There’s a tool on the website of the federal government’s Consumer Financial Protection Bureau (CFPB) to search for first-time homebuyer classes and housing counselors. Enter your desired zip code here to find classes and counselors nearby. The agencies listed appear to be mostly non-profits and were approved by the U.S. Department…

Many recent U.S. retirees in a new survey receive less than two-thirds of what they earned during their working years, and they’ve made significant adjustments along the way. That finding for baby boomers who’ve retired in the past five years is contained in a larger national survey conducted by T. Rowe Price, the Baltimore mutual fund company. The full survey covered some 2,500 working and retired individuals, age 50 and over. All of them have at least some savings in a 401(k) account. The majority of the recent retirees reported their annual income is between $25,000 and $100,000. Social Security is the largest single source of that income, and smaller but equal shares come from defined benefit pensions and from retirement…

It’s old news that working people in the South earn less than residents of thriving communities in California, the Northeast, the Upper Midwest and elsewhere. What’s troubling is how many Southerners apparently can’t pay their bills. West Virginia, North Carolina, Alabama, Kentucky, Texas – they’re among 13 states where more than four in 10 state residents’ credit card or other debts have been sent to collection agencies, according to a July report by the Urban Institute. The report, based on data from the credit reporting firm TransUnion, provides insight into how many Americans continue to experience financial stress even though the recession is technically over.   The Urban Institute’s analysis doesn’t focus on mortgage debt, since delinquent home loans generally go…

It’s not hard to find glowing testimonials online about credit unions – friendlier staff, lower fees, and faster processing of loan applications, credit union customers say. “Way better than a bank!” Dan F. says about his Iowa credit union. Now this warm, fuzzy feeling among existing credit union members seems to be reaching the general public. The Credit Union National Association (CUNA) reports membership growth exceeded 2 percent annually for the past three years, ending a lull that was taking hold only a decade ago. In CUNA’s newest count – the year ending 2014 – total membership increased to 100.1 million members. CUNA president Bill Hampel’s theory is the financial crisis of 2008-2009 “soured a lot of people on t…

At 89 years old, retirement is one of the few things that has not made it onto Robert E. Levinson’s vita. Levinson almost single-handedly seems to be trying to start an anti-retirement movement. He feels so strongly that he once wrote a book titled, “The Anti-Retirement Book.” “I just feel very strongly that one should never retire, or if they’re forced to retire they should try to find something productive to do,” he said. Though not wealthy, Levinson is one of the lucky Americans. The long-time businessman and fund-raiser for a Florida college is college educated and said he is comfortable financially. But when he looks around his luxury senior community in Delray Beach, he sees pain and regret. Many…

Call it the anti-retirement movement – older Americans who are either resisting the lure of retirement or have eagerly exited a short-lived retirement to return to work. Squared Away tracked down three people who fit the profile of the type of people research has shown are most likely to keep working into their mid-60s, 70s, or even their 80s: college-educated go-getters who find unlimited travel or golf a tad boring. To be sure, these are the lucky Americans who have financial and other advantages that many older people lack. The extra money they receive from working, even if it’s part-time, isn’t their primary motivation, though it’s nice to have. And age has given them the luxury of crafting their own…

If buying a house or having children were once hallmarks of being a grown-up, something more basic marks a successful transition to adulthood today: financial self-sufficiency. Only half of more than 1,000 freshmen who entered the University of Arizona in 2007 and were tracked over time by researchers Joyce Serido and Soyeon Shim were employed full-time in 2013.  And only half of these full-time workers, ranging in age from 23 to 26 years old, supported themselves without help from family members. These young adults, mostly graduated, overwhelmingly said that achieving financial independence was critical, according to Serido and Shim’s new report, “Life After College: Drivers for Young Adult Success.” But achieving independence has been difficult due to unprecedented borrowing for…

An estimated 5 million older Americans are victimized by financial and related abuse every year, and people living in nursing homes and assisted living facilities can be especially vulnerable. The federal Consumer Financial Protection Bureau (CFPB) says identifying financial exploitation is complicated by the fact that those perpetrating the fraud are often individuals the senior believes he or she can trust. Often, they are relatives or friends managing the financial affairs of a senior living in a care facility. ……

Which idiosyncrasies affect the decision to retire? What’s driving the widening longevity gap between high- and low-income Americans? Are workers’ retirement savings really falling short, and is working longer good for your well-being? These are among the research topics that will be presented two weeks from today at the 16th annual meeting in Washington D.C. of the Retirement Research Consortium, which receives support from the U.S. Social Security Administration. The agenda and details about the Aug. 7 and 8 meeting can be found here. Register to attend in person – it’s free – or view the meeting online in real time. The consortium’s members are the Center for Retirement Research at Boston College (which supports this blog), the University of…

For those who want to use these lazy summer days to catch up on their reading about retirement, Squared Away has compiled some of the blog’s most popular articles this year. The articles, which are listed below, were among readers’ top 20 from January through June, based on an analysis of Squared Away’s Internet traffic.  Many of the articles were about research sponsored by the Retirement Research Consortium, which includes the Center for Retirement Research at Boston College, a sponsor of this blog. A link to each article is provided at the end of the following headlines: Retirement Delayed to Pay the Mortgage Why Some Retire, Others Persevere Parents’ Longevity Sways Plans to Retire Delay Retiring: A ‘Smart’ Decision Many…

In this video, the president of a Boston-area community bank explains the fundamentals of 529 college savings plans, which most state governments offer. Bob Mahoney recently put both of his daughters through college with money he’d saved in 529 plans. While it can be difficult for many parents to scrape together the money, he said 529 plans provide some hedge in the future against the ever-rising cost of a college education. Mahoney suggested starting small and contributing, say, $1,000 or $5,000 each year and also asking grandparents to put money into the 529, in lieu of giving toys and other gifts. As he explains in the video, the advantage is that 529 plans are free of federal and often stat…

The number of employers offering target date funds as an option in their 401(k) plans, and the number of workers using these funds, continue to increase. In 2013, 86 percent of all employer plans offered target date funds (TDFs) – double the share of plans offering them in 2006 – according to Vanguard’s annual report on defined-contribution plans, “How America Saves 2014,” released in June. Vanguard data also support TDFs’ growing popularity among employees: more than half of plan participants now have some or all of their retirement accounts in TDFs, compared with just one in 10 in 2006. TDFs eliminate the need for employees to wade in and make complex investment decisions about choosing and updating their asset allocations…