February 27, 2014
Why Some Retire, Others Persevere
When older workers are weighing whether to retire or carry on for a few more years, it’s unsurprising that the characteristics of their jobs are a big consideration:
- Higher pay keeps workers in the labor force longer.
- Workers who feel discriminated against are often the first to retire.
But personality also matters, says a team of researchers from the University of Southern California (USC) and the RAND Corporation who analyzed data from the Health and Retirement Study, an on-going survey of age 50-plus U.S. households.
Consider two types of personalities – highly active and engaged, and passive and reserved. The researchers found that higher wages are effective in persuading more passive people to continue working. But monetary rewards are, for highly active workers “a less important driving factor for the decision to remain in full-time employment,” said Marco Angrisani, one of the study’s co-authors from USC’s Center for Economic and Social Research. Active workers will continue to work, simply because they like it or feel compelled to keep busy. …Learn More
January 21, 2014
HHS Website Decodes Long-Term Care
Every day, some 10,000 Americans are turning 65, and every day, more of them start thinking about their long-term care.
For help, try the U.S. Department of Health and Human Services’ recently redesigned website, Longtermcare.gov. It’s very easy to navigate and is packed with reliable information to help visitors:
- Search for specific types of services in your area, by zip code.
- Learn whether your home and location are compatible with aging in place.
- Analyze long-term care costs, by type of service and state.
January 16, 2014
Parents’ Longevity Sways Plans to Retire
Penny DeFraties, a teacher, shared her reaction to a 2012 article that appeared on this blog:
The day I hit my minimum retirement age, I’m gone. I look forward to traveling, gardening, spending time with my grandkids, and volunteering at church, the American Red Cross and USO. My first husband died of a heart attack at 49-years-old, and my current husband lost his first wife to MS at 50-years-old.
The notion that life is short is a valid reason to retire – to travel or enjoy the grandchildren before it’s too late. And the academic literature clearly shows that the age at which people exit the labor force is related to how long they expect to live.
Building on this research, a new study nails down how we arrive at our personal estimates of our life expectancy and provides new insight into the critical retirement decision.
Using data for individuals between the ages of 50 and 61, economists Matt Rutledge and April Yanyuan Wu with the Center for Retirement Research (CRR) and Boston College doctoral candidate Mashfiqur Khan confirmed that individuals estimate their own life expectancy based in part on how long their parents lived. (Full disclosure: the CRR supports this blog.)
They went on to link this “subjective life expectancy” with when older workers plan to retire, as well as when they actually do retire. …Learn More
January 14, 2014
Confidence Key to Retirement Planning
Confidence can be dangerous. It has led investors into fraudulent deals and businessmen into over-borrowing.
But new research finds one circumstance in which confidence may be beneficial: retirement planning.
Saving and investing can be so overwhelming that workers, judging by the low balances in most 401(k)s, often avoid it. So Andrew Parker, a behavioral scientist in Pittsburgh for the non-profit RAND Corporation, wanted to get at the psychological factors motivating those who do dive in and plan for their future.
Parker and fellow researchers concluded that individuals’ tendency to engage in retirement planning and their self-confidence – how much they think they know – are “significantly and positively correlated with each other.” This was true even after their study accounted for how much people really did know.
“If I feel confident in my knowledge and abilities, I may be more likely to move forward” with retirement planning, Parker explained in an interview. “If I don’t, I may be more hesitant to engage in that process.” …Learn More
December 19, 2013
Readers’ Favorite Stories in 2013
The blog posts that attracted the most readers this year provide a window into what’s on their minds. The 2013 articles shown below were the most popular, based on unique page views by Squared Away readers.
We’ll return Jan. 2 with more coverage of financial behavior. Please click here to begin receiving our once-per-week alerts with the week’s headlines – and happy holidays!
To find each article, links are provided at the end of the headlines:
An historical perspective on the U.S. money culture:
Oldest Americans are Lucky Generation
More Carrying Debt into Retirement
The financial challenges facing our youngest workers:
Retirement Tougher for Boomer Children
Student Loans = No House, No New Car
Help with your imminent retirement:
Reverse Mortgages Get No Respect …Learn More
December 10, 2013
Compare Your Retirement to Peers
How are your retirement plans going? If you’re a conservative Generation Y investor, are you in the mainstream? Baby boomers, how many in your generation are planning to retire at the same age you do?
Compare yourself with your peers in this cool interactive quiz developed by the Boston mutual fund company, Fidelity Investments.
Click here to check it out.
As you answer each question, you can compare yourself with your peer group’s answer to that same question, based on a prior survey for Fidelity by the polling company, Gfk. Your peer group is determined by your income and your generation – baby boomer, Generation X and Generation Y. Fidelity also provides useful information and tips with each question. …Learn More
December 5, 2013
Laid-off Boomers: Retirement as Default
The natural reaction to losing a job is to get a new one. But when older people become unemployed, some view it as a dilemma: look for work or just retire?
The presence of a financial safety net significantly increases the likelihood that an older, unemployed person will retire. And that decision often comes quickly after they lose their job, concluded a new study by Matt Rutledge, an economist for the Center for Retirement Research, which supports this blog.
“The brevity of [their] jobless spells suggests that older individuals have little tolerance for a job search” and will “make a quick exit” if they have financial resources backing them up, Rutledge wrote in a recent summary of his research.
His findings get to the heart of the difficult choices facing older workers when they are laid off, no more so than amid the Great Recession when the jobless rate among people over age 55 hit a record 7.3 percent. Rutledge tracked individuals between 55 and 70 who lost their jobs between 1990 and 2012. …Learn More