Squared Away Blog

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…

The first baby boomers will turn 80 in 2026. Arranging in-home care by nurses, home health aides, physical and occupational therapists, or social workers will become a pressing concern for growing numbers of Americans. To sketch out the home care landscape, Squared Away interviewed Carol Levine, director of the families and health care project at the United Hospital Fund, a New York non-profit. She’s written widely on long term care, from academic articles to her new book, “Planning for Long-Term Care for Dummies.” Is it logical that baby boomers will try to avoid nursing or assisted living facilities and will view home care as the way to go – at least for as long as possible? You’re right. Most people,…

Millennial women may have higher expectations about their financial prospects than their baby-boomer mothers. But Millennial women, just like their mothers, are earning less than their male counterparts and saving less for retirement. The vast majority of single and married men and women, ages 22 through 33, said they recognize the need to save, whether as a defense against economic uncertainty or in response to the onus on each U.S. worker to prepare for his or her own retirement. A major reason cited for not saving is “not having enough money to save right now.”  This is especially germane for women: for example, the median annual income for Millennial women is $45,000, while their male counterparts earn $61,000. Women, on…

Financial knowledge is critical to one’s retirement security, finds a new study showing that 401(k) plan participants who scored higher on a test of their financial knowledge earned an additional 1.3 percentage points of investment returns annually on their retirement accounts. Over a 30-year working life, that higher rate of return would add 25 percent to total savings at retirement. Readers can take the quiz by clicking here; answers appear at the end of this blog post. ……

Minnesota, Washington, Oregon, Colorado, Alaska, Hawaii, Vermont, Wisconsin, California and Maine – these states may be the best places to grow old. They came out on top in AARP’s new State Scorecard based on their access, cost and the quality of their care services for aging adults and on their supports for the most common form of caregiver – family members. To see your state’s overall ranking, run your cursor over the map below. To see how your state ranks on other measures, click here. Enid Kassner, an AARP vice president who helped developed the rankings, said the Scorecard is useful to the leading edge of the baby boom generation, who will start turning 80 in 12 years. For example,…

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…