March 2017

Sticky note

The Benefits of Late-career Job Changes

Finding a new job in one’s 50s is not that easy to pull off, and it’s risky if the new employer doesn’t work out.  But there’s a silver lining for people who can make the change to a job they feel is better: they work longer than those who don’t make a move.

A new study by the Center for Retirement Research, which supports this blog, finds the probability that older workers remain in the labor force until they’re 65 increases considerably – by 9 percentage points – if they voluntarily made a job change sometime during their 50s.

This lends credence to other research showing that when older workers voluntarily find a new employer, they often experience more job satisfaction and less on-the-job stress, which makes it easier to resist retiring.

The benefits from changing jobs are both psychic and practical. …Learn More

Students Get Curious About Retiring

“I thought I was going to live forever.”

“I would’ve probably put more money away for later years.”

“I was a stay-at-home mom for 17 years, and I didn’t realize that during those years I wasn’t working I wasn’t accruing Social Security.”

Millennials asked what it’s like to be retired, and seniors answered in this video produced by The New York Times.

The video’s point, it seems, is that it’s not natural for 20-somethings to think about old age at all. “Retirement wasn’t in my vocabulary,” as one senior recalled about being young.

That’s why young adults, as soon as they enter the work world, should force themselves to make friends with a concept far in their futures – and then act on it. And here’s why: saving is more important than it has ever been, because they will carry much more of the burden of financing their retirement than their parents and grandparents ever did.

Even young adults who are paying off student loans should, at minimum, contribute enough to their savings plan at work to qualify for their employer’s matching contribution. Those who don’t plan ahead face a reliance on Social Security’s eroding benefits when they’re in old age, benefits that are the absolute bedrock of our retirement system but not enough for most retirees to continue the standard of living they had while they were working.

If you need convincing, listen to these retirees talk about how difficult it is to live solely on Social Security in the video below produced by Squared Away in 2012: …Learn More

illustration of guy parachuting

A Modest Victory in Financial Education

With so many Americans in the dark about how to prepare for retirement, educating them about why it’s critical to save seems an obvious way to tackle this problem. But very few solid studies prove that financial education actually works.

This field research should be counted as a positive result for a modest, low-cost financial education program.

Carly Urban at Montana State found that tellers and other low-level employees working at 45 randomly selected credit unions around the country clearly made progress after spending just 10 hours in an online financial education program. The information-based program required the workers to do some reading and walked them through specific examples and scenarios they might face.

Their improvements weren’t limited to increasing their knowledge of finances and retirement saving either. They also saved more, Urban said while presenting her findings at a webinar sponsored by the Center for Financial Security at the University of Wisconsin.

In the fall of 2009, the credit union employees completed the online education on the basics of everything from financial planning and investment risk to saving for college and working with a financial adviser. They were allowed to choose how much time to spend on each of 10 modules, and their employers let them take the courses at work – rather than use up valuable free time. …Learn More

1 in 3 Can Barely Afford Medical Care

More American Are Worried About Healthcare CostsMore Americans have health insurance, but they’ve also become increasingly worried over the past two years about how to pay for every aspect of their medical care.

While the majority of insured adults still can afford their health care, the minority who say it’s “difficult” to pay their monthly premiums, doctor and prescription copayments, and deductibles is growing.

Potential explanations for these concerns, revealed in a new Henry J. Kaiser Family Foundation poll, include rapidly rising prescription drug costs and the fact that employer-provided health insurance plans with high deductibles are far more common than they used to be.

To be sure, the Affordable Care Act (ACA) has expanded Americans’ access to health insurance, and federal subsidies have made the premiums more affordable for millions of previously uninsured workers, who now purchase coverage through the ACA’s state health exchanges.  But the program hasn’t eliminated concerns about cost. …Learn More

False teeth

Get Dental Work Before You Retire

Caps, gum surgeries, implants, dental exotica – all kinds of things can and do go wrong in retirees’ mouths.

But dental coverage also drops sharply for older Americans, because when people retire, they give up their employer’s dental insurance. Without it, retirees needing dental work can face an unexpected, mini financial crisis.

Medicare does not cover routine dental procedures, a fact that a majority of working baby boomers are unaware of. But most seniors also aren’t covered through a spouse or under, say, a union dental insurance plan for retirees. The private dental insurance market is their only option for care, and very few purchase it.

Uninsured older Americans shell out $1,126 annually, on average, for dental work, which is $400 more than people with coverage spend. Out-of-pocket costs can be much higher in a year when extensive work is required. …Learn More

Long-term Care on a Boxed-wine Budget

The dangers of isolation in old age, the quest for a nice nursing home on “a boxed-wine wallet” – Annabelle Gurwitch approaches these issues with humor in a PBS NewsHour video that touches on themes previously covered in this blog.

When Gurwitch and her sister started grappling with finding a new home for their parents, one that would provide care for them, the sisters faced some tough decisions – and their parents had to make difficult compromises.

But when their father became very ill, something wonderful happened in their parents’ new community. …Learn More

Tax documents

Retirement, Saving and Your Taxes

Just one in four of the low-income workers eligible for the federal tax credit for retirement saving are even aware that it exists.

The IRS, as I said in a previous blog, practically “gives money away” through its Saver’s Tax Credit, which returns as much as half of the amount saved to the tax filer. The credit was designed to encourage the nation’s lowest-paid workers, who largely don’t save.

Yet a survey last year by the Transamerica Center for Retirement Studies found that people who are not eligible for the credit know more about it than people who are eligible. There was a pervasive lack of awareness in three groups in particular: workers earning under $50,000, women, and people with no more than a high school education.

We’re getting into the thick of the tax season, so we’ve assembled a list of our previous tax-oriented blogs – the first article explains the saver’s credit. The blogs, listed below, explore a variety of issues to consider when you’re doing your taxes: …Learn More