Chesser cats

A Short-lived Retirement

Call it the anti-retirement movement – older Americans who are either resisting the lure of retirement or have eagerly exited a short-lived retirement to return to work.

Squared Away tracked down three people who fit the profile of the type of people research has shown are most likely to keep working into their mid-60s, 70s, or even their 80s: college-educated go-getters who find unlimited travel or golf a tad boring. To be sure, these are the lucky Americans who have financial and other advantages that many older people lack. The extra money they receive from working, even if it’s part-time, isn’t their primary motivation, though it’s nice to have. And age has given them the luxury of crafting their own work schedules, which also allow them to enjoy their families or philanthropy.

Two of these older Americans – Roger Parker, a retired minister (the second musician from right in photo above), and Deborah Hope, a financial industry veteran – are profiled below. One more profile will appear in Thursday’s blog.

Roger Parker
During Roger Parker’s long career as a United Methodist minister, what never got the attention it deserved was one of his lifelong passions: playing jazz standards on the piano – “Quiet Nights of Quiet Stars,” “Take the A Train,” “Satin Doll,” “Ain’t Misbehavin’,” and “The Girl from Ipanema.”

Parker retired from full-time work at his church in Franklin, Tennessee, outside Nashville, after years of saving and preparation for a retirement funded by his church pension and 401(k) account. He signed up for weekly music lessons that got him in shape to join two local jazz groups: Wingtip, which occasionally picks up a paid gig, and Chesser Cats, which performs more frequently – and for free – at local nursing homes. …Learn More

Graduates wondering about their finances

Graduates Struggle for Autonomy

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 college and a post-Great Recession job market that’s been described as “bleak” for young adults.

While the economy certainly poses hurdles, the report concludes that too many young adults fail to take responsibility for their personal finances.  Recent graduates were grouped into three levels of financial behavior: high-functioning, rebounding, and struggling.   Which one is you or your child? …Learn More

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Fraud Alert: Nursing Home Residents

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. …Learn More

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Retirement Research Sessions: Aug. 7, 8

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 Michigan Retirement Research Center, and the NBER Retirement Research Center.

In coming weeks, the Squared Away Blog will cover some of the studies presented at the meeting. …Learn More

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Summer Reading: Retirement

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:

Learn More

College 529 Plans: a Video Primer

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 state taxes on the investment returns earned while the future student is growing up.

One disadvantage is that they require parents to make difficult decisions about how to invest the money they’re saving. Mahoney’s advice is to avoid high-flying stocks and to approach 529s as one would approach 401(k) investing. And, like 401(k)s, low-fee funds also make sense for 529 plans. …Learn More

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Target Date Funds Keep Growing

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. A TDF initially invests largely in stocks, but the portfolio becomes more conservative and the allocation to stocks declines as the individual approaches the targeted retirement date he selected. …Learn More

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