December 13, 2011
Jobless Benefits Delay Disability Filings
Photo by John E. Allen, Inc. Source: Franklin D. Roosevelt Presidential Library and Museum.
In New York, prosecutors recently charged 11 people with illegally collecting disability checks – some were caught playing tennis or golf or shoveling snow.
Boston’s mayor called “disappointing” a jury acquittal last summer of a hulky firefighter who was filmed posing during bodybuilding competitions – while on city disability.
Sensational news stories add to the stigma around people who collect disability for legitimate health reasons. New research on the Social Security Disability Insurance program provides insight into what really motivates people to file. There are two opposing ways to interpret these interesting findings, but more about that later.
Matt Rutledge, my colleague at the Center for Retirement Research, specifically researched disability filings by people who are unemployed in a new study for the Retirement Research Consortium. His work is particularly relevant at a time when the duration of joblessness has soared. Applications for disability typically increase in economic downturns, but they reached record highs in response to the Great Recession. …Learn More
November 1, 2011
Job Risk Dictates Rainy Day Fund Size
Financial planners have scrapped the old rules for emergency funds as the time it takes to find work has skyrocketed.
The U.S. economy picked up a little bit of steam, growing at a 2.5 percent annual rate in the third quarter. But economists expect the unemployment rate to remain stuck around 9 percent for many months.
To protect against a potential job loss, financial planners until recently advised clients to set enough cash aside to cover their expenses for three to six months. Today, six months is their starting point. And the amount of financial cushion should be based on each individual’s job security – the more risk, the bigger the emergency fund. It’s similar to the argument that an entrepreneur, for example, should balance his or her job risk by investing conservatively.
“I ask a lot about their job,” said Rand Spero, president of Street Smart Financial near Boston. “I say you need to be in a savings mode and it needs to increase substantially.”
To calculate an emergency fund, every household needs to know two things: how much fat they can cut out of their budget and how much they can expect to receive in unemployment benefits. Benefits typically cover up to half of the state’s average weekly wage. It now takes 10 months, on average, to find a new job.
Using six months as the baseline, several planners outlined the risks for various life circumstances: …Learn More
July 7, 2011
Widows Have Social Security Options
Julie Taylor-Cooper, who worked for decades as an accounting manager, now scrapes by on her late husband’s Social Security checks and a $145-a-week job.
Many baby boomers like Taylor-Cooper may not realize there are various strategies for claiming full Social Security benefits that can have a dramatic impact on their retirement security.
“There are eight or nine options for retirees, spouses, and widows,” said Stephen Richardson, spokesman for the Social Security Administration. (Full disclosure: SSA funds this blog.)
Julie Taylor-Cooper from Over Fifty and Out of Work on Vimeo.
June 7, 2011
Forced into Retirement? Downsize
Laid off from his job as a software engineer, Ken Wadland did something smart: he downsized.
After losing his job in June 2009, it immediately became obvious to Wadland that he could not afford his large house in the Rhode Island countryside. He sold it and purchased a condominium to reduce his housing costs, which are the largest single expense for most households.
The financial-services industry barrages baby boomers with tips for saving and investing their retirement nest eggs. But little attention is paid to the strategy of downsizing, an effective way for baby boomers to improve their retirement security by cashing in on the large amounts of equity built up in their homes over decades.
“I’d rather not have the expense,” Wadland, who is 60, said in this video.
Ken Wadland from Over Fifty and Out of Work on Vimeo.
Wadland explained how he came around to his decision in the online video series, “Over 50 and Out of Work,” which is featured occasionally in Squared Away.
His most recent job was at a large company, which once awarded him for being an innovator. “My passion is solving puzzles,” said Wadland. …
May 31, 2011
Older Workers Behind the 8 Ball
Rudy Limas, a laid-off truck driver, resorted to applying for unskilled labor jobs – anything to get back to work and support his family.
“They look at your age and think, ‘He can’t handle it’ – even though I can,” the 61-year-old Oregon resident said. “They look at your age [and] they’re not going to hire you.””
Limas’ video interview, included in the online project, “Over 50 and Out of Work,” was selected by Squared Away for a series about the particular financial issues facing people approaching retirement age who lose their jobs.
Rudy Limas from Over Fifty and Out of Work on Vimeo.
May 5, 2011
Toll High When Layoffs Hit After 50
The financial impact on older people who find themselves out of work goes far beyond the missed paychecks: it upsets well-laid plans for retirement.
Stan Bednarczyk, an engineer who was laid off in 2009 by a Michigan automobile supplier, has numerous concerns. He can no longer contribute to the retirement account sponsored by his former employer. And since Social Security is based on an individual’s 35 highest years of earnings, his future benefit may be lower when he retires.
The total dollar cost of his late-career joblessness, which he detailed in this video, is shocking.
Stan Bednarczyk from Over Fifty and Out of Work on Vimeo.
Bednarczyk was among 100 unemployed men and women interviewed for a powerful new video project, “Over 50 and Out of Work,” by New York journalists Susan Sipprelle, Samuel Newman, and Nikolia Apostolou. … Learn More