Tax Cuts, Medicare, and the Kids

deficit chartFederal Medicare spending will increase sharply as baby boomers, with their longer life spans than previous generations, sign up in droves. The Social Security Trust Fund also reports that its reserves will be depleted in 2034, requiring either benefit cuts or new revenues to replenish a program that keeps millions of older Americans either out of poverty or just above water.

These two programs currently account for about 40 percent of the federal government’s $3.7 trillion budget. Most people agree that we need to deal with the financial shortfalls in Medicare and Social Security. And there is precedent. Remember the bipartisan 1983 reform that put Social Security on firmer footing by increasing the program’s revenues and gradually raising its Full Retirement Age?

But there is growing concern among retirement experts and advocates for the elderly that the proposed $1.5 trillion in tax cuts will make future reductions to these critical retiree programs all the more likely in order to rein in growing federal budget deficits.

If cuts to Medicare and other social programs follow a tax cut, it would fly in the face of what regular folks said are their top priorities in a new Kaiser Family Foundation poll: Only a small minority of Americans support tax cuts if they involve cuts to Medicare, Social Security, and Medicaid. …Learn More

thanksgiving

Thankful for Squared Away Readers

Thank you for continuing to read and support Squared Away!

Our goal is to provide reliable information that is not influenced by the desire to sell a product or service, which we hope is a valuable service to you. And as a blog based at the Center for Retirement Research, we are particularly interested in covering what the current research (ours and many others’) can tell us about retirement, personal finance and the economic challenges that people face.

What could be better than a big turkey in the oven and family and friends all around?  Happy Thanksgiving to all.

To stay current on our blog, please join our free email list. You’ll receive just one email each week – with links to the two new posts for that week – when you sign up here.Learn More

Retirees say ‘Ugh’ to Medicare Shopping

medicare chartIn terms of popularity, reviewing Medicare plans during the open enrollment, going on now, ranks right up there with doing taxes.

Retirees on Medicare view healthcare as their most burdensome expense.  But they are less likely to comparison shop for Medicare plans than for their groceries and gas, even though plan shopping would probably save more money.

Deciding on a Medicare Advantage plan or deciding to switch to traditional Medicare, with or without a Medigap supplement, is “overwhelming, scary, and has consequences, so we put it off,” said Bart Astor, a spokesman for the insurer WellCare Health Plans, whose nationally representative survey quantified just how much retirees dread Medicare enrollment.

Selecting one path over another also necessitates predicting the impossible: their future health and how much coverage they will need.

Squared Away can’t predict your medical needs in 2018 either.  But perhaps one of these blogs will help you decide which path to take:

  • Free help navigating Medicare’s maze
  • 10 rules for Medicare Advantage shopping
  • Know the pitfalls of spotty hospital coverage in Advantage plans
  • Advantage premiums reflect physician networks
  • Fewer, clearer Medicare Part D choices
  • Avoid initial Medicare enrollment mistakes
  • Medicare primer: Advantage or Medigap?

If you haven’t shopped yet, why not get started on Black Friday?Learn More

To be Old is to be Happy

age and happiness chartAround age 58, people start getting happier. That’s what the research shows, and this blogger can attest to it.

In the new video displayed below, Rocio Calvo, a Boston College professor of social work, offers up theories for the happiness phenomenon – financial security is one. She also has some particularly striking “happiness statistics” on Hispanics and immigrants.

All over Boston College, academics are studying aging issues, which complement the financial and economic research turned out by the Center for Retirement Research, which sponsors this blog.   Calvo’s video is part of a series of videos by the multidisciplinary Institute on Aging at Boston College.

It’s interesting viewing for older people and their families, with apologies for the regression table (the significance of which quickly becomes clear if you stick with it).

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Employers Chop Down College Loans

Edward, Ashley, and Kirby Cash

Edward Cash would really rather spend his hard-earned paychecks from the Memphis Police Department on his daughter than on humdrum necessities like student loans, replacing a broken-down car, or saving.

“I need money, as much money as I can to take care of this new human in my life,” Cash said about 4-year-old Kirby.

Of course, he and his wife, Ashley Cash, a Memphis city planner, pay their bills, in between doting on Kirby.  But college loans are different: they get help.  The city government pays down $50 a month on each of their loan balances – as it does for some 600 employees.

In May, Memphis joined Fortune 500 companies in the vanguard of employers offering this benefit, including to its police force, which requires some college education, and the fire department, where time in college is not required but also not uncommon.

With college debt exceeding $1.4 trillion nationwide, help with student loans appeals to young employees, who say in surveys that paying them off is their No. 1 financial priority. Recognizing this, major employers are using the tuition benefit to recruit talent, including Fidelity Investments, Live Nation, Natixis Global Asset Management, Pricewaterhouse Coopers, and Staples Inc., according to company and media reports. …Learn More

logos

The Lyft Economy: it’s a Side Job

platform economyDriving around major U.S. cities, it seems like every other car has a Lyft or Uber logo in the back windshield.

These ride-sharing apps are prominent players in the increasingly popular “platform economy,” which links sellers with buyers of their goods and services, from used couches and basement junk to handymen and car rides. This is one corner of the fast-growing gig economy, which also includes freelancers and the self-employed.

But who takes on these jobs, are they long-term or short-term endeavors, and how reliant are participants on the income they generate through online platforms or apps?

Scouring its database of transactions in the bank accounts of 240,000 bank customers who participate in the platform economy, the JP Morgan Chase & Co. Institute has put together a completely anonymous but interesting profile of the participants in this ever-present, but little-understood part of the economy.

Despite a proliferation in platforms, Fiona Greig, director of research at the JP Morgan Institute, said it’s fairly clear from these data this usually is not U.S. workers’ first choice for earning a living.  Most people, “are not relying heavily on this,” she said.  While users have to sell their wares on a piece-rate basis, “the flexibility that this offers makes for the perfect opportunity to add income.” …Learn More

portlandia art

Portlandia Trashes “Instant Garbage”

Hilarious examples of “instant garbage” are offered up in this Portlandia clip by the show’s characters, Bryce Shivers and Lisa Eversman (played by Fred Armisen and Carrie Brownstein).

The price point for an unwanted consumer product that becomes instant garbage is $4.99.  “We found the exact point between price and hassle that guarantees you won’t bother returning” the product, Eversman explains in the video below.

Is the following theory a stretch? There seems to be a direct line between Americans’ relentless buying of stuff we do not need and our inadequate attempts at saving money.

Try walking into a craft superstore or browsing Target’s $1 shelf and suddenly imagining the stuff all piled up at its ultimate destination, the local landfill.

Then walk back out and save the money for retirement.


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