May 2012

Graduating in Era of Low Opportunity

Philip Seymour Hoffman playing the washed-up salesman, Willy Loman, in “Death of a Salesman,” is all the rage on Broadway. But when I saw the play recently, it was Biff who got me thinking about young adults today.

In the Arthur Miller classic, Willy anguishes over son Biff’s failure to hold down a job in the city. But the irony is that Biff, played by Andrew Garfield, probably did very well for himself after leaving Brooklyn for Texas. I imagine he became an oil baron or wound up owning substantial real estate in downtown Houston.

Young people graduating from high school or college today don’t have the virtually unlimited opportunity that existed in the 1940s when Miller wrote the play: the personal drive to find a job and establish a career is not enough anymore. Young graduates who sign up for unpaid internships and double up on college degrees are well aware of this.

Last year, 54 percent of adults ages 18 to 24 were employed – that was the lowest level since the government started tracking the data, in 1948 – according to a February report by the Pew Research Center. Despite an improving job market, it was only 55 percent in March. Job creation – 115,000 were added in April – is below the pace that will open up meaningful opportunity for young people. …Learn More

Read That Social Security Statement!

This week, the federal government put every worker’s Social Security statement online. But while most people look at their statements, research shows that more than one in three misses this major point: the longer one waits to file, the larger the monthly retirement check will be.

We’re talking big numbers: someone eligible to receive $1,000 a month at the popular retirement age of 62 can get $1,333 by waiting until 66 and $1,760 by waiting until 70. Of course, one’s health, financial resources, and life events may make filing later difficult or impossible. But getting the information is critical to making a smart decision, which plays a major role in one’s financial well-being in retirement.

The Social Security Administration (SSA) put the statements online after creating a minor news flap last year when it stopped sending them via snail mail to workers. In February, SSA resumed the mailings to Americans age 60 and older. (Full disclosure: SSA funds this blog through the Center for Retirement Research at Boston College.)

Back to the point: The statements are now easily available on ssa.gov to individuals willing to provide some personal data – the site verifies the personal data they enter online against information held by the credit scoring company, Experian.

Here are a few other things about Social Security that might surprise you. According to various research papers that seek to understand how Americans view their benefits: …Learn More

Academics Question Stock Investing

The Standard & Poor’s 500 index has soared 27 percent since October! These times of strong market gains are the brass ring for a large swath of well-educated, well-off Americans.

But recent academic research on three topics – value investing, the record of individual investors, and the usefulness of investment advisers – raises serious questions about buying individual stocks or actively invested stock funds.

The upshot of this research, it seems, was neatly summed up by Nobel Prize-winning economist Daniel Kahneman’s bestseller, “Thinking, Fast and Slow:” stock picking “is more like rolling the dice than like playing poker.”

The papers are complex (though not difficult to read), so here are synopses and links to them: …Learn More

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