June 14, 2016
More Retirees Get Less Satisfaction
In the late 1990s, six out of ten retirees found retirement “very satisfying.” Today, not even half do, according to a recent analysis of a long-term survey of older Americans.
The news isn’t all bad, since the “moderately satisfied” share rose – and moderately satisfied is probably a more realistic goal for most people anyway.
But the question of why so few people are very satisfied with their retirement state of mind is difficult to pin down. The survey analysis by the Employee Benefit Research Institute (EBRI) and past academic research provide some clues.
Health. It’s well-established that health and satisfaction are inextricably linked: healthier retirees are happier retirees, according to a 2005 study by the Center for Retirement Research, which supports this blog. One reason health is important is that retirees who are healthy can remain active – bridge, golf, travel, volunteering, whatever – which brings satisfaction. …Learn More
May 5, 2016
To Escape Stress, Some Workers Retire
Call it the “fed-up factor” – the uncomfortable circumstances at work that spur some older people to retire, sometimes prematurely.
Squared Away’s readers recently shared their personal experiences in comments posted to a blog post about three job characteristics, identified by researchers, that are linked to earlier retirements: stress, inflexibility, and increasing demands.
Working in the healthcare field has had unique stresses – at high levels – for one reader, Elin Zander, a dietician. Stress “is experienced by clinicians trying to provide quality care in an ever more difficult environment,” she said. “That is why I will retire as soon as I can afford to.”
Paul Brustowicz and his wife both retired to remove themselves from uncomfortable situations – her retirement was to relieve her stress from working as a manager in the demanding healthcare field. As for Brustowicz, “an abrupt change in management with a supervisor who treated me like a newcomer changed by mind,” he said. He had planned to work until 68 but didn’t make it to 67 in his non-managerial job as a training professional for a life insurance company.
John Schmidt’s stress came in working as a high-tech consultant after 30 years in the field – though not for obvious reasons. …Learn More
April 28, 2016
Stress is One Reason People Retire
Only about half of U.S. workers in their late 50s can be expected to remain employed at age 63, and less than a third make it past 65.
New research looks below the surface of these broad trends to reveal the role that the specific characteristics of individual occupations play in whether baby boomers can work longer.
It’s very common for people unexpectedly hit with health problems or blue-collar workers facing up to their physical limitations to retire earlier. On the other hand, older people in some jobs have good odds of working longer. A new study by researchers from the University of Michigan and the Rand Corporation uncovered three characteristics that promote working longer that exist in a variety of jobs: low stress, stable job demands and duties, and the ability to transition to part-time work.
The researchers used a survey of full-time workers over time, starting when they were 51 years old, to see when they retired. Their analysis then linked the workers to a separate database of job skills and characteristics to uncover specific jobs that led to earlier retirements (before age 63) or later retirements (after 65).
Research has consistently shown a strong tendency for high-stress work to push people out the door earlier – one example that emerged from this study is licensed practical nurses, who are on the front lines in challenging medical situations. A related finding is that people retiring after 65 are often in “creative or labor-of-love” jobs,” such as writers, musicians, social workers, clergy, and college professors. This is indirectly tied to stress, which is often mitigated by a love of one’s work. …Learn More
April 7, 2016
Our Blind Spots Cut Retirement Savings
Our personal biases can play havoc with how we handle our finances.
Two such biases have long been suspected as obstacles to saving for retirement. The first is a tendency to procrastinate on decisions that may benefit an individual in the long run, but also involve short-term costs, like saving for retirement – economists call this “present bias.”
The second bias is a failure to perceive the power of compounding investment returns and how this can build wealth over decades of saving.
But the impact of these biases on how much people actually save wasn’t really understood – until now. A new study by a team of economists from Stanford University, the University of Minnesota, the London School of Economics, and Claremont Graduate University finds that people who are not blinded by these two biases in particular have saved significantly more for retirement, largely because they start putting money away earlier in life.
The researchers based their findings on a big sample of nearly 2,500 people in online surveys in 2014 and 2015; the average age was about 49. To determine the consistency with which they value the present over the future, the survey asked the participants a series of questions about whether they would, for example, rather have $100 now or a larger amount on some future date – people who want their money now are a bit like Wimpy from the Popeye cartoons, who became famous for wanting a hamburger now but offering to pay for it later. The survey questions about compounding revolved around estimating an account’s future value, using a variety of different interest rates and time periods. … Learn More
April 5, 2016
Black Americans Give More to Relatives
Giving money to relatives.
Oprah has done it – in the form of a $490,000 house for her newly discovered sister. Former NFL cornerback Phillip Buchanon just wrote a book complaining about it. And Charles Barkley is characteristically blunt about it.
“When you continually come to me for money, that’s what ruins relationships,” Barkley explained on NBA TV. “I probably got $4-5 million I lent to friends and family I’ll never see again.”
No one is immune to a relative’s appeals for financial help. But this is a perennial and far more prevalent issue among black Americans – and not just the ultra-rich like Oprah and Barkley – according to Rourke O’Brien at the University of Wisconsin.
What O’Brien calls “informal assistance” exists, in part, because giving bestows non-monetary benefits on the givers as they foster emotional support and solidarity among their kin. But as a personal financial issue, the expectations and feelings of obligation are very challenging – and a topic of conversation in the black community.
One woman commenting online said she was looking for some useful advice about how “to be more comfortable with saying ‘no’ ” to her loved ones. …Learn More
March 29, 2016
Work Absenteeism Tied to Money Stress
Most of us know how distracting and stressful it is when our credit card balance creeps up or there’s a gap between a bill’s due date and when our paycheck gets deposited.
But financial stress can also create serious problems at work like absenteeism, problems that can turn around and compound the financial problems.
More than one in four employees who said they deal with “financial stress” admit that it interferes with how well they do their jobs, says a new survey of 5,000-plus workers by the consulting firm Willis Towers Watson.
It also increases absenteeism. The study found that workers stressed about their finances are absent from work 3.5 days per year, on average – nearly double the absenteeism of people who are not stressed. And when the worriers are at work, they are “highly distracted” – this distraction can gobble up 12 additional days per year, interfering with how well they do their jobs, the survey found.
The workers expressed broader concerns than their unpaid bills, too, said Steve Nyce, a senior Willis Towers Watson economist. Many are very concerned about their long-term financial future and retirement. …Learn More
March 22, 2016
Rise in Fraud Reports is Unrelenting
A nearly three-fold increase over the past decade in the number of fraud and related complaints filed with the Federal Trade Commission has pushed the total to 1.7 million filings in 2015, according to the government’s consumer 2015 data book released this month.
As Squared Away reported recently, older Americans are often the most vulnerable, as their cognitive abilities decline or they become more socially isolated. Not surprisingly, the FTC said Florida had the highest rate of reported fraud per resident last year (followed by Georgia, Michigan, Texas, and Nevada).
One reason for the increase in complaints is that people are increasingly aware of fraud and more likely to report it. Another is that fraud-reporting agencies such as law enforcement and consumer groups are increasingly aware they can file complaints with the FTC. But 1.7 million allegations of fraud, identity thefts, and other scams is, by any yardstick, a lot of complaints.
The typical loss was $400 for an individual fraud complaint. There is evidence that more people are getting savvy: a smaller share of the people who filed 2015 complaints said they turned over any money to their scammers than in previous years. … Learn More