October 22, 2020
Cognitive Decline Meets COVID-19 Scams
The federal government warns that older Americans are being targeted by a battery of financial scams, including telemarketers offering to do contact tracing – for a fee – or to reserve a slot for a future vaccine. Others are soliciting donations to charities purportedly helping people in need during the economic slowdown.
COVID-19 makes this a perilous time for people struggling with cognitive decline.
Few can escape a deterioration in their cognitive capacity as they age. It’s just a matter of degree and speed. But the faster it happens, the more damage it can do, the FINRA Investor Education Foundation concluded in a new study.
The study was based on surveys of more than 1,000 older residents in Chicago retirement communities and subsidized housing – average age, 80. The same people were periodically asked questions with varying degrees of difficulty about their general financial knowledge and investments and were asked to compare and calculate percentages.
The older people who either initially had less understanding of financial concepts or experienced a faster decline in their knowledge made poorer financial decisions in exercises that simulated real-world decisions.
This included a vulnerability to scams, which was assessed by asking the older people to agree or disagree with statements like this: “If a telemarketer calls me, I usually listen to what they have to say.” (Not recommended.) And this: “If something sounds too good to be true, it usually is” (Count on it.)
To prevent scams, older people – and their caregivers – need to anticipate the financial damage that cognitive decline can cause. …Learn More
August 13, 2020
Workers Lacking 401ks Need a Solution
Although COVID-19 has exposed alarming gaps in a health insurance system that revolves around the employer, the Affordable Care Act is one potential solution for workers who lack the employer coverage.
There is nothing equivalent on the retirement side, however.
Many workers between ages 50 and 64 are in jobs that provide neither health insurance nor a retirement savings plan. But, in contrast to the health insurance options available to them, “no retirement saving vehicle appears effective in helping older workers in nontraditional jobs set aside money for retirement,” concluded a new analysis of workers in these nontraditional jobs.
Nontraditional workers who want to save for retirement are left with two options: their spouse’s 401(k) savings plan or an IRA operated by a bank, broker or financial firm.
A spouse’s 401(k) hasn’t been an effective fallback for a couple of reasons. First, a substantial number of the workers who lack their own 401(k)s are not married. And second, if they are married to someone with a 401(k), they’re not any better off. The researcher found that married people currently contributing to 401(k)s do not save more to compensate for the spouse without a 401(k), reinforcing other research showing these couples don’t save enough for two.
The other option – an IRA – is open to everyone. But only a small fraction of Americans currently are saving money in IRAs, and most of them already have a 401(k). So IRAs, in practice, aren’t doing much for the people who need the help: workers who lack employer benefits. … Learn More
August 6, 2020
Public-Sector Disability is Fairly Generous
About one in four state and local government employees – some 6.5 million people – do not participate in the Social Security system. They get their disability insurance, as well as their pensions, from their employers.
Whether the coverage is more or less generous than Social Security disability depends on the individual worker’s circumstance and how the state or local employer calculates benefits. But a new study concludes that public-sector workers who have a disability generally receive benefits that are at least as generous as the federal benefits.
To compare them, researchers at the Center for Retirement Research had to construct a database with each state’s and locality’s eligibility requirements and benefit payments. The sample consisted of 67 different disability programs, which cover a majority of the U.S. workers who don’t pay into Social Security.
The main thing Social Security and the public-sector have in common is eligibility – a 35-year-old must have five years of employment to receive federal disability and four to six years under most public-sector programs. One way they differ is that most state and local governments have a more liberal definition of what qualifies as a disability. Social Security pays benefits to a worker who can no longer do any job. Public-sector benefits go to a worker who can’t continue doing his current job.
The disability benefits are also calculated differently. Social Security’s progressive formula is the most generous to low-wage workers, because it replaces a higher percentage of their past earnings. But each state and local government uses the same formula for all of its workers, regardless of their earnings, and the formula gives more credit to employees who have been with their employer the longest.
What does all this add up to? The older public-sector workers, who are most at risk of developing a disability, receive relatively generous protection under the state and local programs, because the eligibility requirements are less strict than Social Security’s and because the benefits for most long-tenured employees replace a higher percentage of their earnings.
Older people who moved into the public sector late in their careers are in a different situation. …Learn More
July 30, 2020
Pension, 401k Registry Bill Resurfaces
When COVID-19 throws people out of work, their chances of retiring comfortably can deteriorate rapidly. What better time to find a new way to help?
A perennial proposal just reintroduced in Congress would do some good: establish an online database of employer retirement plans so workers and retirees can locate old pensions and 401(k) accounts.
Workers are increasingly responsible for making sure they have enough money to retire. But moving from job to job is now the norm – the one-employer career is a distant memory – and pensions get left behind and 401(k)s fall by the wayside. People who try to find old plans often can’t locate employers that have changed names, merged, relocated, or terminated a plan.
The primary way to find retirement plans now is through the lost property records kept by each state. But Anna-Marie Tabor, director of the Pension Action Center in Boston, which recovers lost pensions and 401(k)s for the center’s clients, said billions more in unclaimed funds can’t be located in the state records, because employers are not required to turn over plan information to the states. Also, 401(k)s are hard to find since many employers transfer small accounts to third-party IRAs without the account owner’s awareness.
Tabor argues in the Journal of Aging and Social Policy that the COVID-19 recession brings new urgency to passing the proposed Retirement Savings Lost and Found Act of 2020, especially for low-income workers hit hardest by layoffs and older workers who are running out of time to repair their finances prior to retiring.
“Connecting people with money they’ve already earned is an easy and inexpensive way to support the economic recovery,” she said. …Learn More
July 23, 2020
Some with Severe Mental Disability Work
People with intellectual disabilities, autism, or schizophrenia have high rates of unemployment. But a new study finds that some can find part-time or even full-time jobs with the help of coaches funded by the government.
Having a coach doesn’t guarantee that a person with a disability will get a job. But in a 2019 study, the people who received this support “were significantly more likely to become employed” than those who did not get the help, according to researchers for the Retirement and Disability Research Consortium.
To get and keep these jobs requires a lot of personal attention. The federal-state Vocational Rehabilitation program provides coaches – often at non-profits – who find the right jobs for their clients and then act as a liaison to smooth out the bumps and guide the employer-employee relationship.
Because the cognitive disabilities of the individuals in the study varied so much, the researchers broke them out into nine groups, based on their specific disabilities, education levels, and likelihood of benefitting from the program. In all but one of the nine groups, the people who received support had significantly higher employment rates than those who did not receive the help.
Between a third and half of the people with coaching support had a job, the researchers found. Among the people who did not receive any support, employment rates were as low as one in four. …Learn More
June 30, 2020
COVID: The Challenge for Older Workers
In anticipation of rambunctious children returning to the classroom in the fall, older teachers are sounding alarms about how challenging it will be to make the schools safe for themselves, as well as the children and families.
Their fears about going back to work in a pandemic are shared by older workers around the country with chronic conditions, which increase the mortality rate for people who contract COVID-19.
More than half of U.S. workers who are between ages 55 and 64 are in jobs that can’t be done remotely, a new study estimates. Their flexibility to work at home isn’t much different than younger adults.
But older Americans who are weighing whether to return to work face a dilemma that is of less concern to young, healthy workers.
The older workers must choose between “health risks – returning to work before the virus is under control – or economic risks – delaying work until the environment is safe, which may exhaust their resources,” concluded researchers at the Center for Retirement Research, which sponsors this blog.
Jobs that can’t be performed at home were identified in the study by 14 specific tasks, ranging from interacting with the public and handling machinery to rarely using email and standing or walking for most of the workday.
By linking information about jobs to individuals in a national survey, the researchers reported on the ability to work remotely based on the characteristics of the workers themselves. They found that women, who often gravitate to jobs that give them more flexibility or the ability to work part-time, are more likely to be in jobs they can do at home – think about travel agents (85 percent are women) and freelance writers (67 percent).
The analysis also confirmed something the media have reported anecdotally: working remotely is a perk of being a well-paid professional. About six in 10 workers in the highest earnings bracket can do their jobs at home, compared with just over three out of 10 workers in the lowest two earnings brackets. …Learn More
June 25, 2020
Virus Complicates Boomers’ Job Searches
As laid-off baby boomers venture into the job market in the midst of the COVID-19 pandemic, they may sense it will be tough to find a position because, well, they’re too old.
New research indicates this suspicion is spot-on.
Discrimination is notoriously difficult to corroborate in academic studies. But researchers in Belgium, using a well-designed experiment conducted prior to the pandemic, found that company hiring managers working in 30 developed countries, including the United States, were much less likely to ask older job applicants to even come in for an interview.
The reason? They were perceived as having “lower technological skill, flexibility, and trainability levels,” the study concluded.
But there’s a big disconnect between this evidence of discrimination and a different report, based on a 2019 telephone survey, that employers view workers over age 55 as being at least – and sometimes more – productive than their younger colleagues. This survey also found that older workers are perceived more positively if the hiring manager is older. The findings provide some hope that, as the population ages, baby boomers who want to continue their careers may be able to do so.
However, even the authors of this study acknowledge two issues facing boomers. First, even when employers say they have positive perceptions of older workers, this posture “does not necessarily correspond with employer behavior.”
Second, given older workers’ underlying health conditions, COVID-19 is a wild card that could “adversely affect” their job prospects.
In any case, older job hunters will inevitably encounter some recruiters who will hold age against them. To overcome preconceived notions about older workers, the study of discriminatory recruiters provided some practical tips, based on the findings. …Learn More