Posts Tagged "psychology"

Procrastinators Are Not Big Savers

The Greek poet Hesiod, circa 700 B.C.

Saving for retirement is a modern-day imperative, but even the ancient Greek poet Hesiod – quoted in a new study – advised us not to tarry:

Do not put off till tomorrow and the day after; for a sluggish worker does not fill his barn.

So what about procrastinators, who place more importance on today’s enjoyment than on preparing for the future?  The new study asked whether people with this personality trait make different decisions about retirement saving than non-procrastinators and found that they do.

Up to one in five people were procrastinators in the study’s data base of more than 155,000 workers at numerous employers.  The researchers identified procrastinators in the sample as the people who waited until the final day of open enrollment to choose their health plan from among their employer options.  (To separate them from employees who intentionally delayed so they could collect enough information, the researchers looked at how often people used various online employee benefit tools – these strategic delayers were very active; procrastinators were not.) …Learn More

Wanna Retire? Find a Purpose

In this video by KUTT-TV in Anchorage, Alaska, Fred Keller and Judy Foster show off their retirement project: they transformed a 1976 pickup truck into an oversized replica of a Radio Flyer wagon they can drive around town.

While a new red wagon isn’t for everyone, it illustrates an important point: retirees need to find ways to remain active. Older people warn that retirement shouldn’t be viewed exclusively as a time to “relax,” a well-deserved break.  People who enter retirement expecting nirvana often find they’re bored stiff, or even depressed, due to an abrupt drop in productivity after decades of working. Retirees also spend a lot of time alone or watching television.

This blog often promotes the benefits of financial health and mental health that come with working longer.  When making financial preparations for retirement, preparation should also include thinking about pursuits such as working on a long-neglected project or hobby, writing a family history, or finding a social group, part-time job, avocation, or volunteer work to add structure and purpose to one’s life.

It took Keller and Foster nearly a year to build their vehicle, KTUU reports. When they took it on the road, they discovered another benefit: talking to the people who invariably ask them about their Radio Flyer is a constant source of fun.Learn More

Woman reaching for food

Hunger: Unspoken Among the Elderly

Retirees in one Orlando-area community sustain a lively conversation about every topic under the Florida sun, a conversation that threads through their rounds of horseshoes, dinner dances at the club house, and senior yoga.

But one subject must be handled with great discretion: hunger.

Judy Cipra knows this, because she and her late husband, Fran Cipra, started, and she continues to operate, Fran’s Pantry to collect money and buy groceries for 18 seniors who struggle financially in the Palm Valley retirement community, where my mother also lives.

“If you call me and you tell me that you need food, I don’t ask any questions,” Cipra said. “You just get it.”

Cipra said people reliant solely on Social Security are often embarrassed to be barely getting by.  Some fill their food gaps with soda crackers and peanut butter, she said.

But hunger among seniors is not uncommon.  About 15 percent of Americans age 60 and older were threatened with hunger in 2012, according to the National Foundation to End Senior Hunger.  And as the baby boom population ages, the number of these “food insecure” seniors is continuing to rise, exposing growing numbers of retirees to health problems and depression stemming from not having enough to eat. …Learn More

Photo of a widow

Widows Face More Financial Adversity

Two times more widows than widowers say their spouse’s death carried significant negative financial consequences during the first year after their loss.

This sharp contrast recurred in numerous financial questions recently posed to widows and widowers by New York Life.  The contrast also seemed to persist across various income levels, in questions revolving around both essential needs and luxuries.  Here’s a sampling of answers given by nearly 900 Americans whose spouses have died sometime in the past decade:

Their answers beg the question: Why the divergence?

One reason is certainly that two-thirds of the widows surveyed reported their income was under $35,000, while a majority of the widowers earned more than that. Adults over age 18 were canvassed, so working women’s lower earnings no doubt contributed to the income and lifestyle disparities.

Pension survivor policies also play a role, since two out of three of the people surveyed were over age 65. …Learn More

trust

Trusting Souls Want Financial Advice

Here’s a conundrum: Americans struggle to save for retirement or reduce their credit card spending.  But only about one out of three seeks help with financial issues.

So what lies at the heart of our decisions about whether and when to seek help?  Trust.

In the video below, Angela Hung, director of the RAND Center for Financial and Economic Decision Making, describes research showing that people who trust financial institutions – the markets, financial services companies, brokers – are also more likely to ask for advice from a financial adviser or similar professional.

Further, Hung’s research found that people who trust the industry are also “more likely to be satisfied with their financial service provider.”  Watch the video for Hung’s explanation of an interesting experiment that explores the circumstances under which people follow the advice once it’s given to them.

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Fraud Comes with Aging, Mental Decline

Sometimes research seems merely to confirm the obvious. One example is a new study showing that the cognitive decline that naturally comes with aging makes a senior more vulnerable to fraud.

This isn’t especially surprising, but it is important. Amid a shortage of solid research about fraud among the elderly, this study provides important insight into how and under what circumstances they are increasingly being taken to the cleaners by scammers.

In their study, Keith Gamble at DePaul University and researchers at the Rush University Medical Center used a survey of older Chicagoans known as the Rush Memory and Aging Project, which contains an unusual amount of information about aging, cognition, and financial fraud.

In addition to measuring changes over time in the cognitive functioning of its participating seniors – mostly women – the annual survey asks if they’ve ever been a victim of fraud.  It also includes six questions designed to get at their susceptibility to fraud – Do they have difficulty ending a phone call? – and two questions asking about their willingness to take undue financial risks.  In this case, the undue risk is whether they’d accept a bet with 50/50 odds that they could either double their annual income or lose 10 percent of that income.

Here are their findings: …Learn More

Retirement: a Good State of Mind

Is retirement good for one’s mental health? The evidence is all over the place.

One study concludes that retiring sooner means a higher incidence of dementia.  Other studies show it benefits physical health, which can affect one’s state of mind.  Research from different countries reach different conclusions about their own retirees’ sense of well-being: the English and Finnish find that retiring improves it, while Korean and U.S. researchers don’t.

Chart: Life Satisfaction by CountrySeeking some universal truths about retirement in the Western world, a new study of the United States and 11 European countries finds that it improves subjective well-being, measured both in terms of satisfaction with one’s life and the incidence of depression.  The study is based on two comparable sets of surveys of age 50-plus Americans and Europeans taken in 2004, 2006, and 2010.

An analysis of retiree well-being faces some tricky analytical issues, which have plagued past studies and which the new study had to overcome. For one thing, people who are depressed may be the most likely to retire, creating the statistical equivalent of a chicken and egg problem.  The new study also had to account for the negative financial consequences of leaving or losing one’s job – which can reduce satisfaction and increase depression – in order to isolate the influence of retirement, independent of its effect of lowering income. …Learn More

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