Squared Away Blog

Retiree health benefits are a luxury item. In 2013, just 28 percent of government and private-sector employers with more than 200 employees offered health benefits to their retiring workers, down from 66 percent in 1988, according to the Kaiser Family Foundation. These plans are popular with workers, but their declining prevalence has a silver lining. A long history of research shows that people who can retain their employer health benefits if they retire tend to retire earlier, confident they’ll be insulated from extraordinary medical expenses that could wipe out their savings. Here’s the silver lining when retirees lose that coverage: by inducing them to remain in the labor force longer, perhaps until their Medicare starts, it improves their retirement security…

Waiting to claim Social Security is good for retirees’ financial health – none more so than the U.S. Latino population. This message is delivered in Spanish in the above video, “El Seguro Social: Vale la Pena Esperar.” The video was produced by the National Academy of Social Insurance, a policy research non-profit, and Squared Away found it on the website of Latinos & Economic Security. Latinos & Economic Security, which is part of UCLA’s Center for Policy Research on Aging, said Latinos make up 7 percent of the U.S. population age 65 and older. But due to their lower incomes during their working years, Latinos are more reliant on Social Security than are Asian-American, African-American and white, non-Latino retirees, t…

Older people often wonder why young adults get tattoos that they’ll later want to remove. In this Ted video, psychologist Dan Gilbert says tattoos are a good example of a universal error in thinking. ……

Sudden changes in older workers’ financial expectations for retirement can cause depression, according to a 2011 study. The study, which came out of the Netherlands, suggests that cuts in Dutch pensions, announced on very short notice, produced feelings of differential treatment and a loss of control that increased the incidence of depression among the workers who were adversely affected. Workers were tested for depression two years after a 2006 pension reform reduced the share of their salaries replaced by the government-mandated defined benefit pension plans provided by employers. Workers born in 1950 and after suddenly learned their “replacement rate” – the percent of pay the pension replaces – would drop to 64 percent, from the 70 percent initially promised.  Everyon…

State and local government workers have long felt their pensions were more secure than the vanishing pension coverage in the private sector.  But a spate of changes to cost-of-living protections should give them pause. In the wake of the Great Recession, 17 states reduced, suspended, or eliminated cost-of-living increases (COLAs) in their defined benefit pensions for state and local workers, according to a recent summary of legislative actions around the country by the Center for Retirement Research, which sponsors this blog.  And the courts are backing them up, deciding that the inflation protections – a fixture of the majority of public pensions – do not have the same constitutional or other legal protections that apply to core benefits. The COLA…

Are people who claim their Social Security retirement benefits when they’re 62 too sick or impaired to work? Fast forward three years, to when these early claimers turn 65.  They’re about as healthy as those who decided to wait until age 65 to start receiving their Social Security retirement benefits, according to preliminary findings from a study using Medicare spending data as a proxy for health.  The early claimers are also far healthier than people who left the labor force early to go on federal disability. Some 8,500 older Americans were in the study’s sample, and they fell into four different groups: those who claimed a reduced Social Security pension soon after turning 62; those who claimed a larger pension…

Dementia is a critical personal finance issue when so much is at stake in managing, investing, and spending one’s lifetime savings.  But one study found that, in the vast majority of older couples, the person in charge of managing the household finances continues to do so after dementia sets in. Dementia can be difficult to perceive in oneself or a spouse or parent, because changes are usually so gradual, psychologists say. Individuals can now get a rough assessment of their own or a loved one’s cognitive abilities with a test posted on the website of Ohio State University’s Wexner Medical Center in Columbus. Spokeswoman Elaine Scahill said more than 900,000 people have downloaded the test since it went online in…

Americans have a very good chance of entering a long-term care facility. New research at the Center for Retirement Research, which sponsors this blog, finds that 44 percent of older men and 58 percent of older women will likely enter such a facility for at least a short stay. Only 29 percent of adults age 40 and over, however, are “extremely” or “very” confident they’ll have enough resources to pay for such care, or for other types of care they may need in old age, according to a survey by the Associated Press-NORC Center for Public Affairs Research, an independent survey organization based at the University of Chicago. The AP-NORC poll also revealed that people are poorly informed about how…

More adults are planning their funerals than are making arrangements for care in their final years of life. That’s among the revealing findings about how Americans grapple with the inevitabilities of old age in an annual survey about U.S. attitudes toward long-term care. More than 1,400 adults were surveyed in March and April by the Associated Press-NORC Center for Public Affairs Research. (NORC is a social science research organization affiliated with the University of Chicago.) “Experts believe that, like any other long-term financial planning, long-term care planning is the kind of thing you should get started with as soon as possible,” said Jennifer Benz, a senior research scientist for AP-NORC. But for many people, “it’s not even on their radar,”…

About one in three Americans trying to pay down their student loans is 90 days or more late on their payments, according to a new report by the Federal Reserve Bank of New York. This is up sharply from a decade ago, when one in five people in repayment was that far behind. The Federal Reserve estimates that 31% was the “effective” delinquency rate in 2012; it applies only to people who have actively been in repayment. The bank said this rate is a more accurate measure of the problem than the widely reported rate for 90-day delinquencies – 17 percent – which includes all borrowers, including current students and those who’ve been granted some type of loan payment deferra…

Enrollment in the Medicare Advantage plans that private insurers offer as an alternative to traditional Medicare coverage has more than doubled over the past decade, the Kaiser Foundation reports. The share of the Medicare population enrolled in these private plans is 30 percent, up from 13 percent in 2005, the non-profit foundation said. The reason for this dramatic growth: Medicare Advantage became a better deal for older Americans in the wake of a 2003 increase in federal subsidies to insurance companies offering the plans. The federal government subsidizes insurers through its reimbursements for the care they cover for older Americans enrolled in Medicare Advantage. Those payments were increased in 2003. Insurers responded by reducing beneficiaries’ copayments and cost-sharing in t…

A new study estimating that just 12 percent of low-income older Americans save in a 401(k) or similar employer retirement plan also suggests that many more would save – if only they could. The researchers – April Yanyuan Wu, Matt Rutledge, and Jacob Penglase of the Center for Retirement Research – focused on individuals between ages 50 and 58 with household incomes below three times the poverty line. That was less than $36,357 in 2010 for a one-person household, for example, and less than $46,800 for two people. The period studied spans 1992 through 2010. Retirement saving primarily takes place in workplace plans. But to participate in a plan, workers must clear four hurdles. First, they need a job. Next,…