Squared Away Blog

Manuel Carvallo immigrated from Mexico at age 40 and became a U.S. citizen at 51.  The Georgia pension consultant just reached another milestone, accumulating the 10 years of U.S. work experience required to receive a small Social Security pension when he retires. Millions of immigrants from around the world who work here illegally could get the same opportunity as Carvallo under President Obama’s executive actions on immigration, which propose to give many of them temporary legal work papers and Social Security numbers.  Great uncertainty remains about where U.S. immigration policy is heading as Congress actively seeks to reverse the president’s administrative actions What is clear is that when undocumented immigrants – farm workers, hotel workers, and household and restaurant staff…

Lose your SSA-1099 tax form showing your total Social Security benefits in 2014? Or perhaps you moved and never received it in the mail. Last year, more than 156,000 retirees did just that and had to call the U.S. Social Security Administration for a replacement. But help has arrived. For the first time, retirees can go to the agency’s website to retrieve and print out a duplicate SSA-1099 form. The SSA-1099, which is mailed in January, provides benefit information necessary for filing an individual’s income taxes. The SSA-1042S, a similar form for immigrants and other non-residents, is also available online. ……

Mutual fund managers would seem to possess myriad advantages over the average individual investor: a business degree, a deep understanding of corporate finance, and years of experience. But you wouldn’t know it based on how their personal portfolios fare. A new study of mutual fund managers in Sweden found that that they “do not exhibit superior security-picking ability” when managing their personal portfolios, compared with similarly situated private citizens who also invest for themselves. Using detailed tax and investment information contained in Swedish government data bases, researchers from the University of Notre Dame and Michigan State University were able to link individual fund managers to their personal equity portfolios and returns, which were then compared with the returns of non-experts…

Excluding the health insurance premiums paid by employers and employees from workers’ taxable earnings is the federal government’s largest single tax expenditure, amounting to some $250 billion a year in lost revenue. Eliminating the exclusions – as some in Washington have proposed – would sharply increase how much is taken out of workers’ paychecks for payroll taxes and for income taxes. But any such proposal would also put more money in their pockets when they retire by increasing the earnings base on which their Social Security benefits are calculated. Urban Institute researchers Karen Smith and Eric Toder recently estimated the policy’s impact on workers’ taxes and benefits and found that it varied widely for different income groups and among peo…

U.S. workers have a long list of reasons, many of them legitimate, for why they can’t come up with the money for a retirement savings plan. But here’s the rub: we live in a 401(k) world. Workers who aren’t convinced of the urgency of saving should listen to people who have already retired.  Even though many current retirees have defined-benefit pensions, they have become largely unavailable to most people still working today. And these retirees say they’ve learned the hard way that saving is key. Excuses now and regrets later – these two takeaways came out of a nationally representative survey of workers and retirees by HSBC, a global financial institution. Saving for retirement is not a major priority for…

Education is the holy grail of success.  But too many young men in this country don’t graduate high school, much less aspire to a college degree. It’s clear that completing high school improves one’s chances of moving up the economic ladder.  So why doesn’t this incentive always work? At a time of greater attention to the nation’s widening inequality, new research supports the argument that income inequality may actually discourage disadvantaged low-income teenagers from finishing high school. The study examined whether there is a relationship between inequality and the drop-out rate, measuring inequality as the ratio of the lowest incomes in each state – the bottom 10 percent – to incomes in the middle.  The study found that drop-out rates…

Saving should be the centerpiece of any retirement plan today.  But a new survey indicates that many Americans on the cusp of retiring have given little thought to the other key issues they’ll face in retirement. A majority of older Americans recently surveyed by the American College of Financial Services, an educational organization for financial professionals, said they have set a goal for how much money to save to “live comfortably” as retirees.  And, when asked to assess their own progress, they feel they’re doing a good job of it.  Granted, the survey was limited to a select group of about 1,000 people over age 60, all of whom have at least $100,000 in investable assets. But the financial risks…

Ever try to make sense of a medical bill, with its co-payments, cost-sharing, and government or insurance-company reimbursements that haven’t been paid yet?  Hospital stays with multiple doctors and lab tests make billing even messier. These layers of complexity contribute to errors and confusion that can damage Americans’ credit ratings.  Consumers “incur medical debts in collection without certainty about what they owe, to whom, when, or for what,” the federal Consumer Financial Protection Bureau (CFPB) reports. When a hospital or physician hasn’t been paid, they may, after trying to resolve the issue in-house, pass the unpaid bill to one or a series of collection agencies.  Yet nearly one in four of the complaints consumers have made to CFPB about medica…

What makes this AARP video about fraud compelling is that a few brave seniors were willing to discuss how they were cheated out of a few thousand dollars, $20,000, even $300,000. With the baby boom population aging at the same time that the Internet has become a haven for hackers, scammers, and invasions of privacy, experts predict that the incidence of online and other fraud against the elderly will continue to increase in coming years. Some researchers have begun to explore the topic of fraud and aging, with one recent study showing that people become more vulnerable to fraud as they age and experience natural cognitive decline. The seniors’ testimonials in the video, produced by the AARP Fraud Watch Network,…

A full-time job that delivers a steady paycheck, week in and week out, is a luxury for many working people. Low- and middle-income adults are instead often whipsawed by wild swings in their incomes, finds a U.S. Financial Diaries project, based on detailed biweekly or monthly financial interviews with 235 urban and rural U.S. households nationwide. During the course of the year these interviews were conducted, the average household experienced four spikes or dips, defined as a change of at least 25 percent in their incomes. The Bloomberg video above explains that even when workers’ annual incomes are sufficient to cover annual expenses, these month-to-month fluctuations complicate how – or whether – they can save for their future. The incom…

A recent Brookings Institution report confirms for the first time how severely uninformed many college freshman are about the impact of the debts they’re taking on to fund their education. This isn’t entirely surprising. But with tuitions continually rising and students now often forced to borrow the equivalent of a house down payment by the time they graduate, the Brookings findings should serve as a wake-up call: Half of the full-time freshmen surveyed “seriously underestimated” how much they were borrowing. Among students known to have federal college loans, four out of 10 either said they didn’t have any federal loans or didn’t have any debt at all. According to the report, “Students who do not have a good idea of…

Years of confinement to a nursing home is everyone’s worst fear for old age. With a semi-private room now costing about $81,000 annually, the prospect of a lengthy stay is also a popular reason for buying a long-term care insurance policy to cover it. Undercutting this rationale is a new study led by senior economist Anthony Webb of the Center for Retirement Research, which sponsors this blog. He finds that U.S. nursing home stays are relatively short: 11 months for the typical single man and 17 months for a single woman.  There’s some unpleasant news in the study, too, because the risk that an older person may one day need nursing home care is 44 percent for men and 58…