October 20, 2016
Your Social Security: 35 Years of Work
This blog is for a part-time Macy’s saleswoman and immigrant whom I met in a hospital waiting room – she’d never heard of Social Security.
It is also for a 22-year-old contingent worker I know who lacks steady employment and isn’t regularly accruing credit toward the Social Security pension he will probably need when he retires.
And it is for a 62-year-old eager to claim his benefit right away, possibly short-changing his retirement.
A substantial share of retirees would fall into poverty were it not for the Social Security program passed during the Great Depression. It’s especially important for two groups of people to understand how Social Security calculates their pension benefits: young adults making employment decisions that will impact them decades from now and older people figuring out when to retire.
Yet research shows that many people do not know the basic workings of a program that is crucial to their financial security.
Steve Richardson, a Social Security official in Boston, holds regular seminars to explain the pension program to the public. “The first thing I ask is – before I say my name – ‘How many people in this room know how many years Social Security looks at to determine your pension payment?’
“Not many of them know it’s your high 35 years of earnings.”
To qualify for a pension benefit at all, a person must work full- or part-time for 40 quarters – a total of 10 years. That’s not a difficult hurdle for most to clear during decades in the labor force. What’s central is the size of your future benefit check, which is determined by your highest 35 years of indexed earnings, Richardson said – and that brings us to the math thing. …Learn More
September 8, 2016
Women Often Quit Work to Help Parents
Here’s just some of the evidence of the enormity of the challenge of caring for our elderly parents:
- One in three baby boomer women cares for an elderly parent.
- Even if they work, these caregivers devote anywhere from eight to 30 hours per week to that parent.
- The estimated value of informal senior care provided by family members approaches $500 billion in this country – or double the amount spent on formal, paid care.
Caring for an elderly parent is usually done with love or out of a feeling of familial obligation. But there are real costs to taking on this responsibility, which most often lands squarely on a daughter’s shoulders. These costs could come in the form of lost wages and employer health insurance or in sacrifices of future pay raises or promotions. It’s also more difficult for older women to find a new job if they drop out of the labor force to help an ailing parent.
According to preliminary findings in a new study that used 20 years of data, taking care of a parent does significantly reduce the chances that women in their early 50s to early 60s are working. Interestingly, the number of hours devoted to caring for a family member do not seem to affect women’s decisions about whether or not to work (though the researchers plan to revisit this finding).
But Sean Fahle of the State University of New York in Buffalo and Kathleen McGarry of UCLA said caregivers “may simply leave a job in order to provide care.” Their paper was part of a series presented at the National Bureau of Economic Research this summer. …
September 6, 2016
Wives Pay Price to Retire with Husbands
Wives like to retire around the same time as their older husbands – so they can play. But what a difference the baby boom generation has made.
For boomer wives, as members of the first generation of women to enter the U.S. labor force en masse, there can be a steep cost to leaving the labor force at a relatively young age to retire with an older husband. New research by Nicole Maestas of the Harvard Medical School bears out this logic.
It’s obvious that working wives can increase their earnings from work by resisting the urge to retire at a relatively young age. And married women generally earn much more, relative to their husbands, than in the past.
But, more often than their mothers and grandmothers, boomer wives can increase their own Social Security benefits by continuing to work.
To understand how this works, compare boomers with their grandmothers. Their grandmothers were probably housewives for most of their lives and worked sporadically or part-time. As a result, their husbands’ earnings determined the size of the spousal retirement benefits they received from Social Security.
The situation is very different for boomer wives, who often have worked enough to earn their own benefits and wouldn’t qualify for a spousal benefit. Social Security calculates their benefits, as they do for all workers, using the average of her highest 35 years of earnings. But here’s the rub: many boomer mothers still haven’t accumulated 35 years of substantial earnings, because they took some time off or worked part-time to raise children. …
September 1, 2016
Finances Change with US Family Structure
- One out of every 10 Generation X mothers is single – many more than in the generation born during World War II.
- Nearly two-thirds of single older people are the survivors of divorce – far more than in the past.
- About one in three couples has moved away from their hometowns and from both of their mothers – blame this geographic mobility on the growing share of U.S. workers who are college educated.
These are just a few of the dramatic changes in U.S. family structure and behavior that have developed over the past half century. These changes have had enormous financial consequences for everyone, especially women.
Squared Away has documented some of the financial impacts in previous blogs. A Lucky 7 such blogs, most of them based on studies by the Retirement Research Consortium, are summarized below (with links to each one):
- Women are having babies five years later, on average, increasing their earnings substantially over their lifetimes.
- About half of Americans don’t live near their mothers, creating new pressures for caregivers. This video explains who they are.
- In the aftermath of divorce, many women figured out how to rebound in the labor force and earn more.
- But when it comes to retirement preparedness, a doubling in the divorce rate since 1990 has put more baby boomers at a financial disadvantage.
- Stepchildren, divorced parents, blended families – the structure of the parent-child relationship has grown more complex, and so have the parents’ wills. …
August 30, 2016
Seniors Find an Affordable Haven
The stress of living with her son and daughter-in-law made Mary Roby’s blood sugar spike. But when she began her search for an independent senior housing community, affordable and nice never seemed to come in the same package.
Roby, who is 80, said she looked around quite a bit. A one-room place in the Boston area for $4,500 a month had no senior services, a limited kitchen, and was housed in a poorly maintained building. She also knew, through her son’s in-laws, about a high-end assisted living community with extensive services, but it charged more than $6,000.
Then she found Shillman House, which was both affordable and nice. “I love it here,” Roby said about the independent senior housing community in Framingham, Mass. …Learn More
August 25, 2016
Senior Housing a Remedy for Loneliness
After his wife of 36 years died from cancer, Dick St. Lawrence experienced something new: loneliness.
“Worst feeling in the world,” St. Lawrence, 81, said about Linda St. Lawrence’s death in the winter of 2014.
Like many widows and widowers before him, he had to build a new life for himself, despite having the comfort of a large family of four living children, six grandchildren and seven great-grandchildren. His first small step was accepting an invitation to play poker at Shillman House, an independent housing community for seniors owned and operated by Jewish Community Housing for the Elderly. The man who called to invite St. Lawrence knew a woman who used to play Mahjongg with Linda.
Next thing he knew, he’d sold their family home in Framingham, Mass., around the corner from Shillman House, and settled into one of its 150 apartments. Now he plays two poker games a week, works out at his old gym, and socializes with Shillman’s residents every evening in the dining room. At night, his Cairn terrier, Rusty, keeps him company during Red Sox games on television.
“I want to visit as long as I can,” Dick St. Lawrence jokes about his plan to spend his final days there.
The vast majority of baby boomers in an AARP survey said they want to age in their homes “as long as possible.” But when the rubber meets the road – in old age – the elderly often learn that isolation is bad for their psyche and their health.
There are downsides even to living in a community for independent seniors, with the constant reminders of the vulnerabilities that come with aging. When a Shillman resident suddenly becomes ill and is driven away in an ambulance, dread quickly spreads among the residents that he or she might not be coming back.
Still, they say, the positives far outweigh the negatives. All in their 80s, the seniors interviewed have visibly slowed down but are still enjoying vigorous social lives. …Learn More
August 18, 2016
How Many Years Can You Do Your Job?
Physical power, fast reactions, steady hands, a crisp memory, and mental dexterity – these physical and mental abilities, taken for granted in youth, break down slowly but persistently over the years.
A unique combination of physical and mental skills help to determine whether each worker’s continued employment is more or less susceptible to aging. To better understand who can work longer and who can’t, researchers at the Center for Retirement Research developed a Susceptibility Index to rank 954 U.S. occupations.
Using the skills required for each occupation in the federal O*Net database, they ranked the occupations from 0 to 100 based on the risk that age-related decline will affect a worker’s ability to perform that particular job. The risk reflects the number and importance of the age-vulnerable abilities.
Click here to see where your job ranks.
Of course, individual workers experience aging in different ways, and some learn to compensate for declining skills. But there are dramatic differences between occupations with very high and very low Susceptibility Indexes.
As one might expect, physically demanding blue-collar work suffers the adverse effects of aging: rock splitter in a quarry (90.3 Susceptibility Index), floor sander (91.0), steelworker (94.4), commercial diver (94.0), truck driver (96.4), and oil rigger (98.5).
Occupations with very low indexes are primarily white-collar: interior designer (5.8), lawyer (6.3), aerospace engineer (8.9), loan counselor (12.4), and radio announcer (14.8).
Where things get interesting is in the middle rankings. Mixed in with somewhat physically demanding jobs – personal care aide (52.7), warehouse order filler (53.7), baker (54.7), postal service clerk (56.3), and food server (58.2) – are white-collar desk or hospital jobs. These include private detective (44.8), surgeon (51.2), architectural drafter (52.8), anesthesiologist’s assistant (53.1), computer network architect (54.8), and critical care nurse (55.7).
After ranking the 900-plus occupations, the researchers concluded that “the notion that all white-collar workers can work longer or that all blue-collar workers cannot is too simplistic.” …Learn More