June 23, 2016
Our Readers’ Favorite Blogs
It’s the time of year when we highlight blogs that attracted the most page views over the previous six months, according to Google analytics.
Today, we’re listing a “baker’s dozen” – 13 blogs – popular with our readers, instead of the usual top 10. This allows us to highlight some interesting themes that were apparently on readers’ minds:
Many retirees weighed in with their comments on two blogs about how and why they’re taxed:
- How Federal Taxation Drops for Retirees
- Why Most Elderly Pay No Federal Tax
A new feature called “Boomers: Rewriting Retirement” that profiles people who are either approaching retirement or recently retired made the list:
- A Familiar Dilemma: to Work or Retire
Squared Away tried something else new – two quizzes on financial topics – and many readers took them: …Learn More
June 16, 2016
Retirement Researchers Meet in August
Reverse mortgages, health insurance, marital histories, social networks, and even student debt – any or all of these can play a role in the financial security and well-being of America’s retirees.
These are among the topics that will be explored during the 18th annual meeting of the Retirement Research Consortium, which features researchers from top universities around the country whose work is supported by the U.S. Social Security Administration.
The meeting will be held on Thursday, Aug. 4, and Friday, Aug. 5 in Washington, DC.
To learn more about the research papers being presented, click here to read the agenda.Learn More
May 17, 2016
The Secret to Longer Life: Keep Working
If having an adequate income in retirement won’t persuade you to delay that retirement date by a year or two, try this argument: you’ll live longer.
A new study in the Journal of Epidemiology and Community Health found strong evidence that older workers who retire even one year later have lower mortality rates. This held true for both healthy and unhealthy people.
The researchers at Oregon State and Colorado State used a survey of older workers to follow some 3,000 people who were employed in 1992 but had retired by 2010. Since health drives mortality and is a factor in deciding when to retire, they separated their research subjects into two groups – healthy and unhealthy – to see if they had different results.
The healthy people were more likely to be physically active, non-smokers with a lower body mass index and fewer chronic medical conditions. Other research has shown that having meaningful work can also contribute to health at older ages.
Over the period of the study, one in four unhealthy retirees died, compared with just about one in 10 healthy people. But the survival odds improved for people in both groups who retired after age 65, reducing the risk of healthy people dying by 11 percent and unhealthy people by 9 percent for each year of delay.
These general results aren’t necessarily true of every individual worker: some people are in such stressful or physically demanding jobs that retirement might be good for their health. Further, the reasons behind the health benefits of a longer working life are not fully understood. …Learn More
April 28, 2016
Stress is One Reason People Retire
Only about half of U.S. workers in their late 50s can be expected to remain employed at age 63, and less than a third make it past 65.
New research looks below the surface of these broad trends to reveal the role that the specific characteristics of individual occupations play in whether baby boomers can work longer.
It’s very common for people unexpectedly hit with health problems or blue-collar workers facing up to their physical limitations to retire earlier. On the other hand, older people in some jobs have good odds of working longer. A new study by researchers from the University of Michigan and the Rand Corporation uncovered three characteristics that promote working longer that exist in a variety of jobs: low stress, stable job demands and duties, and the ability to transition to part-time work.
The researchers used a survey of full-time workers over time, starting when they were 51 years old, to see when they retired. Their analysis then linked the workers to a separate database of job skills and characteristics to uncover specific jobs that led to earlier retirements (before age 63) or later retirements (after 65).
Research has consistently shown a strong tendency for high-stress work to push people out the door earlier – one example that emerged from this study is licensed practical nurses, who are on the front lines in challenging medical situations. A related finding is that people retiring after 65 are often in “creative or labor-of-love” jobs,” such as writers, musicians, social workers, clergy, and college professors. This is indirectly tied to stress, which is often mitigated by a love of one’s work. …Learn More
April 12, 2016
White-Collar Jobs Age-Sensitive Too
It’s widely recognized that blue-collar workers retire relatively early, when their bodies start wearing out. But the assumption has been that people in less physically demanding white-collar jobs can carry on.
However, that does not hold true for all white-collar occupations, according to a newly released study by the Center for Retirement Research, which supports this blog. This finding is especially relevant amid renewed discussions about again increasing the age when workers can claim their full Social Security benefits.
This would effectively reduce everyone’s benefits by about 7 percent for each year the age is raised. Benefits are reduced either because individuals must wait longer to claim their full monthly benefit (which means receiving the benefit for a shorter period of time) or because they would receive a smaller monthly benefit if they don’t wait. The reduced monthly benefit would affect people who might be pushed into an earlier retirement due to age-related limitations on what they can do.
Factory or construction workers are classic examples: critical attributes, such as strength and flexibility, atrophy with age. But so do many cognitive and other requirements common to both white- and blue-collar jobs. Memory slips, eyesight blurs, and reaction times are no longer as sharp as they used to be. …Learn More
April 7, 2016
Our Blind Spots Cut Retirement Savings
Our personal biases can play havoc with how we handle our finances.
Two such biases have long been suspected as obstacles to saving for retirement. The first is a tendency to procrastinate on decisions that may benefit an individual in the long run, but also involve short-term costs, like saving for retirement – economists call this “present bias.”
The second bias is a failure to perceive the power of compounding investment returns and how this can build wealth over decades of saving.
But the impact of these biases on how much people actually save wasn’t really understood – until now. A new study by a team of economists from Stanford University, the University of Minnesota, the London School of Economics, and Claremont Graduate University finds that people who are not blinded by these two biases in particular have saved significantly more for retirement, largely because they start putting money away earlier in life.
The researchers based their findings on a big sample of nearly 2,500 people in online surveys in 2014 and 2015; the average age was about 49. To determine the consistency with which they value the present over the future, the survey asked the participants a series of questions about whether they would, for example, rather have $100 now or a larger amount on some future date – people who want their money now are a bit like Wimpy from the Popeye cartoons, who became famous for wanting a hamburger now but offering to pay for it later. The survey questions about compounding revolved around estimating an account’s future value, using a variety of different interest rates and time periods. … Learn More
March 8, 2016
Study: College Debt Hurts Retirement
College graduates learn very quickly that paying hundreds of dollars toward student loans each month makes it difficult to afford things like a nice apartment or a car.
But they might not appreciate the long-term consequences of their record levels of borrowing: college debt is an added threat to their retirement security, according to a new study by the Center for Retirement Research.
The researchers gauged the debt’s impact by looking down the road to retirement and projecting what would happen if working people of all ages had started out with the same profile as young adults: 55 percent of today’s 20-something households have student debt, and they owe $31,000, on average.
College debt has a bearing on retirement security through two avenues. First, money going into loan payments is not available for a retirement savings plan. Second, lenders place limits on how much total debt a homebuyer can have, forcing many borrowers to delay home purchases; and getting a home loan would be very hard for the 17 percent of student loan borrowers delinquent on their debt.
Based on these assumptions and using 2013 data, the Center’s National Retirement Risk Index shows that those at risk of a lower standard of living when they retire would increase sharply to about 56 percent of working U.S. households – compared with 52 percent at risk when the student loan projection isn’t figured into the NRRI calculation.
This “represents a substantial increase in the already alarming rate of households at risk,” said the Center, which supports this blog. …Learn More