December 23, 2015
Year-end Thank You to Our Readers
To stay current on Squared Away blog posts in 2016, we invite you to 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.
Readers can also follow the blog on Twitter @SquaredAwayBC or on Facebook.Learn More
December 22, 2015
Readers’ Picks in 2015
Squared Away readers should know this ritual by now. We consult Google Analytics to determine the articles with the most reader traffic over the past year.
This blog covers everything from student loans to helping low-income people improve their lot. But this year’s Top 10 was dominated by one topic: retirement.
Readers’ favorites are listed in order of their popularity, with links to each individual blog:
- Navigating Retirement Taxes
- Medicare Primer: Advantage or Medigap?
- Why I Dropped My Financial Adviser
- The Future of Retirement is Now
- Annuities: Useful but Little Understood
- Winging it in Retirement?
- Fewer Need Long-Term Care
- Misconceptions about Social Security
- Late Career Job Changes Reduce Stress
- Mortgage Payoff: Freedom versus the Math
To stay current on our Squared Away blog in 2016, we invite you to 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
December 1, 2015
What Derails a Planned Retirement Date
Workers are feeling very ambitious these days: one in three plans to retire after age 65. In the 1990s, just one in 10 did.
In reality, though, many older Americans today are retiring before they’d planned, resulting in lower monthly Social Security checks, slimmer 401(k) accounts, and more golden years to pay for.
There’s no shortage of research looking into what derails these plans. But, for the first time, a new study ran a statistical horse race among the various reasons known to impact older workers’ decisions. Health issues finished first in the race, followed by layoffs, and a spouse’s early retirement.
In an ideal world, eliminating these major shocks, along with a few less prevalent shocks that were also analyzed, would reduce the share of older workers retiring earlier than planned, from 37 percent to 27 percent. [The remaining factors that were still unaccounted for in this analysis could be anything from not liking one’s job to financial or health events that went undetected by the survey.] …Learn More
November 24, 2015
Social Security Delay: the Value to You
What matters most in retirement is how much money comes in the door every single month. That’s why this blog – and its sponsor, the Center for Retirement Research – hammers away at the wisdom of delaying when you sign up for Social Security in order to increase the size of your monthly checks.
So here’s a very quick project for the long Thanksgiving weekend: insert your birthday and earnings into this new online tool to get an anonymous, back-of-the-envelope estimate of how much a delay is worth to you.
The age you claim your benefits is crucial, because two out of three households rely on Social Security benefits for more than half of their retirement income. Yet the majority of people still sign up before they’re eligible for their full benefit, which is age 66 for most baby boomers. Monthly benefits are increased for every year of delay, up to age 70.
The cool part of the tool, released last week by the Consumer Financial Protection Bureau and the Social Security Administration, is the sliding feature. It shows how much monthly benefits rise if you change your claiming age from 62 to 66 to 70. Click here to try the tool. …Learn More
November 19, 2015
Listen to Your Elders Please
People do not like to hear advice from their “elders.” But shouldn’t retirement be an obvious exception?
The options for what most workers can do to salvage their retirement finances rapidly narrow as they get closer to retiring. After 50 or so, it’s also tough to find a better job, and only so much can be saved in short bursts – retirement saving requires years of diligence.
If you’re still listening, the following is sage advice drawn from two recent New York Life surveys of older workers on the cusp of retirement and octogenarians.
- Workers in their 50s and early 60s said they started saving too late for retirement. They put the “magic age” at around 26.
- Automatic savings vehicles such as 401(k)s (or even insurance or paying down a mortgage) turned out to be crucial to the sense of how secure pre-retirees feel about their futures. This was particularly true when children were living at home. …
November 17, 2015
Long-term Care Policyholders Who Lapse
In an upside-down aspect of long-term care insurance, about one in four older people with a policy who eventually go into a nursing home had let that policy lapse sometime in the previous four years, forfeiting coverage that would’ve paid for their care.
The questions are who does this and why.
New research by the Center for Retirement Research (CRR) finds two explanations for why: a scarcity of financial resources and cognitive impairment, which limits the elderly’s ability to properly manage their finances, including their long-term care policies.
The researchers found no support for what they call “strategic lapsing” – a deliberate decision to quit paying the premiums by healthy older individuals who, upon reconsideration, conclude that their risk of needing care in the future is low. …Learn More
November 10, 2015
Men Save More – Women Save Better
This will not surprise you: men have more money saved for retirement than women.
Men averaged $123,262 in their defined contribution plans, compared with $79,572 for women, according to a new report by Vanguard based on its 2014 recordkeeping data.
But these figures hide a larger truth: women are actually better at saving for retirement.
“Overall, women are better at this but men earn more money so they have higher wealth accumulation,” says Vanguard researcher Jean Young, author of the new report, “Women versus Men in DC Plans.”
Young’s research found that women are 14 percent more likely to enroll in a voluntary workplace retirement savings plan. Women save 7 percent of pay, compared with 6.8 percent for men, controlling for wages, job tenure, and plan design. They also save at higher rates than men at every income level.
Her findings also refute the old wive’s tale that women don’t like risky investing. …Learn More