Converting a Desire to Save into Saving

 

Save. Budget. Spend less on takeout.

“We know what we need to do,” financial behavior expert Wendy De La Rosa says. “The question is how to do it.”

Consider one of the pandemic’s lessons for workers: it’s important to build up an emergency fund for a potential financial catastrophe. But how to translate that into action?

De La Rosa, who founded the Common Cents Lab to help low-income workers manage their limited resources, has conducted research showing that people can overcome the psychological barriers to saving by changing the financial cues around them.

In this Ted video, she provides three practical tips, one of which she applied to her own life. After spending $2,000 in a single month on a ride-sharing app in Manhattan – “death by 1,000 cuts” – she vowed not to do it again. She did it again anyway.

So, she changed her financial cues. She deleted the credit card attached to her app and linked the app to a debit card with a $300 limit per month.

To change behavior, De La Rosa said, “change the decision-making environment.” …Learn More

Map of the United States

Where Will You Retire? This Might Help

The toughest part of Paul and Cathy Brustowicz’s decision to relocate from New Jersey to Summerville, South Carolina, was leaving behind their two grandchildren. The retirees also miss the theater and dinners in Manhattan.

A big advantage of South Carolina, though, is “more house for the money,” Paul Brustowicz said. The couple also had a few old friends who were already living there, and the warm weather is nice, though it, too, involves a tradeoff: high summer humidity and hurricane season. As for amenities, it’s a quick drive to Charleston for dinner, the airport, and the Medical University of South Carolina.

“Overall, it was the right move for us,” he said about the 2012 relocation.

South Carolina ranked a very respectable 14th in WalletHub’s 2021 report on the best and worst states to retire. New Jersey, on the other hand, is squarely in last place because of its steep cost of living.

Also at the bottom of the ranking are New York – another very high-cost state – and Mississippi, which is ranked as having a subpar health care system.

Wallet Hub’s 50-state rankings are based on three categories: affordability, quality of life, and health care. A chart displays each state’s ranking overall and in each category.

Florida, with its year-round sun, golf, and very large retiree community, came out on top. Housing is a relative bargain there, and taxes are low. The tradeoff is the state’s mediocre health care system.

After Florida comes Colorado, which gets high marks all around, and Delaware, which is an affordable retirement spot. …Learn More

2021 art

Our Popular Blogs in the Year of COVID

2020 was a year like no other.

But despite the pandemic, most baby boomers’ finances emerged unscathed. The stock market rebounded smartly from its March nosedive. And the economy has improved, though it remains on shaky ground.

Our readers, having largely ridden out last spring’s disruptions, returned to a perennial issue of interest to them: retirement planning.

One of their favorite articles last year was “Unexpected Retirement Costs Can be Big.” So was “Changing Social Security: Who’s Affected,” which was about the toll that increasing the program’s earliest retirement age could take on blue-collar workers in physical jobs who don’t have the luxury of delaying retirement.

COVID-19 in the nation’s nursing homes has caused incomprehensible tragedy. A nursing home advocate explained how this happened in “How COVID-19 Spreads in Nursing Homes.” And the mounting death toll in nursing homes surely confirmed a longstanding preference among baby boomers – as documented in “Most Older Americans Age in their Homes.”

Despite the economy’s halting recovery, layoffs due to COVID-19 still “may be contributing to the jump in boomer retirements,” the Pew Research Center said. Pew estimates that 3.2 million more boomers retired last year than in 2019, far outpacing the increases in recent years.

The layoffs have no doubt forced some boomers to start their Social Security earlier than planned, as explained in “Social Security: Tapped more in Downturn” and “A Laid-off Boomer’s Retirement Plan 2.0.” But unemployed older workers who are still too young for retirement benefits might apply for disability insurance, according to a study described in “Disability Applications Spike in Recession.”

Baby boomers hoping to ease into retirement on their own terms liked a pair of articles about ongoing research by Harvard Business School professor Teresa Amabile: “Mapping Out a Fulfilling Retirement” and “Retirement is Liberating – and Hard Work.”

Other 2020 articles popular with our readers included: …Learn More

Covid vaccine ornament

A Splendid Holiday Gift: a Vaccine

Rather than look back on a bizarre and painful 2020, let’s look ahead to the bright side: a vaccine.

It is truly remarkable that top-notch scientists have been able to create several vaccines in record time. Producing and delivering them will be another hurdle, and questions remain about side effects and how long a vaccine will protect us. Many Americans’ reluctance to strictly adhere to public health standards will unfortunately slow our ability to put the virus completely behind us.

But scientists and public health officials seem confident the vaccines can eventually snuff out this once-in-a-lifetime pandemic.

Only then can we get back to our normal activities, such as traveling, eating at restaurants, and shopping – in person, rather than online. More important, increasing our consumer spending will give a shot in the arm to the economy and help put many Americans back to work after months of unemployment.

Have a joyful but subdued holiday – and enjoy the anticipation of a happier 2021!

Squared Away will return on Jan. 5 with a round-up of our readers’ favorite blogs in 2020.

Read our blog posts in our ongoing coverage of COVID-19.Learn More

Video Documents Nursing Home Tragedy

When COVID-19 started spreading through nursing homes last spring, the United States had no first-hand experience battling a coronavirus.

That’s a fair point but an inadequate explanation for a tragedy in which more than 100,000 nursing home residents and staff to date have died of COVID-related causes.

There is plenty of blame to go around. Governments either wouldn’t or couldn’t provide enough personal protective equipment, forcing the certified nursing assistants to don garbage bags and recycle masks. A shortage of tests limited the ability to detect asymptomatic cases and contain outbreaks. The Centers for Disease Control, prior to the pandemic, had documented poor infection control practices. This made nursing homes a petri dish for spreading the virus. Acute staffing shortages compounded the dangers.

This video by AARP is a chronology of what went wrong. It’s a horror story of panic, chaos, and blunders. It’s also a start on understanding how we can do better in the future to protect our most vulnerable population – the elderly.

“We need to continue to raise alarms and demand action to prevent anything like this from happening again,” said Bill Sweeney, a senior vice president of AARP.  AARP is a corporate partner of the Center for Retirement Research, which sponsors this blog.

Read our blog posts in our ongoing coverage of COVID-19.Learn More

Video: Young Adults Share Career Setbacks

More than half of young adults are now living with their parents – the highest level in more than a century, according to the Pew Research Center.

This alarming statistic, first featured in a September blog, is the result of a long-term trend that has accelerated during the economic slowdown caused by COVID-19.

In this PBS NewsHour video by Catherine Rampell, young adults 24 to 39 years old who are taking refuge in their parents’ homes talked about their stalled social lives and disrupted careers – their disappointments always tinged with a sense of humor.

They include Marcellus Adams, who was laid off from two jobs, as an auto mechanic and emergency room staffer, and, at 29, has never really lived on his own. Eric Rivera moved from the height of chic – an apartment in the Williamsburg section of Brooklyn – to his parents’ home in a suburb of Trenton, New Jersey. And comedienne Nikki Glaser’s white-hot career suddenly cooled when her shows were canceled due to the pandemic.

They and millions of Millenials and members of Generation Z may pay a price for their setbacks in the form of lower earnings and unplanned-for career trajectories.

But a vaccine is coming, they are young, and they will persist.

Read our blog posts in our ongoing coverage of COVID-19.Learn More

How Long Will You Live? Try This

How often do you eat red meat? Do you exercise regularly? Cancer in your family? Did you go to college?

These questions – among the varied and complex predictors of longevity – are packed into a calculator that will estimate how long you could live. The calculator was created by Dr. Thomas Perls, an expert on longevity and the genetics of aging at Boston University.

Articles about the links between longevity and diet and lifestyle are perennial fodder for the popular press and health magazines. But Dr. Perls’ research dives deeper – into genetics.

In his work with geneticists, statisticians and computer scientists, he has studied the connections between genetics and people with exceptional longevity – nonagenerians (people living into their 90s), centenarians (living past 100), and super-centenarians (living past 110). His research has predicted, with a high level of accuracy, who makes it to the most advanced old ages based on hundreds of their genetic markers.

An interesting finding for women’s longevity involves the age their children were born: “Twenty percent of female centenarians had children after the age of 40 compared with 5 percent of [all] women from their birth cohort,” according to Dr. Perls.

His calculator also asks about attitude, specifically whether you’re aging well or dreading old age. Indeed, some research has found that optimism may contribute to a long life. Ike Newcomer, who was 107 when AARP shot the above video a few years ago, revealed a sunny disposition.

“I can’t really think of which was my best day,” Newcomer said. “They were all good.”

Dr. Perls’ calculator gave me some good news – I could live to 95. It would be nice if I take after my maternal grandmother, two of her brothers, my maternal great grandfather and a couple of great great aunts. All of them lived well into their 90s.

How long will you live? It takes just a few minutes to use the calculator – try it, if you dare. …Learn More