How Does Your Wealth Compare?

Depressing or eye-opening?

An online tool tells you where you stand financially by stacking up your net worth against other Americans.

The calculator compares a family’s net worth – financial and other assets minus debts – with all other U.S. families. Homeowners can choose to include the value of their home equity in their total net worth – or not.

Older people have had more time to accumulate wealth, so the rankings are based on the age of the household’s primary wage earner. The comparison is made with 2016 data from the Federal Reserve Board’s triennial Survey of Consumer Finances, which is the gold standard for personal financial data.

Since family – not individual – data are being compared, people who live alone are at a disadvantage. They will be measured against households with more than one person working and accumulating assets.

The calculator is on the DQYDJ financial blog written by a computer programmer and a financial professional. The validity of the results was confirmed by an economist formerly with the Center for Retirement Research, which sponsors this blog.

It might be fun to find out how you’re doing. But use this online tool at your own risk! …Learn More

CRR Essentials logo

Check Out Our Retirement Podcasts

Thousands of baby boomers retire every day and sign up for Social Security. Yet the payroll tax that funds their benefits is being levied on a shrinking share of workers’ aggregate earnings.

You might not know this but inequality and growing U.S. trade with China are among the forces that are behind this trend, Gal Wettstein explains in a new podcast about his research for the Center for Retirement Research (CRR).

This is the latest in a series of podcast interviews in which CRR researchers talk about their work on issues related to work, aging, and retirement. The podcasts are hosted by yours truly.

Others explore how motherhood reduces women’s Social Security benefits, the limited impact of cognitive decline on older workers, and the disparate impact of the same retirement age on different types of workers.

The podcasts – “CRR essentials” – are available in iTunes and online on the Center’s website. …Learn More

washing away 2018 on beach

Here’s What Our Readers Liked in 2018

We’re kicking off 2019 with our periodic review of the most-read articles over the past year, based on the blog traffic tracked by Google Analytics.

Judging by the comments readers leave at the end of the blog posts, baby boomers are really diving into the nitty-gritty of preparing themselves mentally and financially for retirement. Financial advisers also frequently comment on Squared Away, and we hope some of our web traffic is because they’re sharing our blog with their clients.

Last year, Squared Away received recognition from other media. The Wall Street Journal recommended us to its readers for the blog’s “wonderful mix of topics.” The Los Angeles Times picked up our article, “Why Retirement Inequality is Rising.” MarketWatch published our posts about how pharmacists can help seniors reduce their prescription drug prices and about a Social Security reform to reduce elderly poverty.

The most popular blogs in 2018 fall into five categories:

The Big Picture

How Social Security Gets Fixed Matters

Future ‘Retirees’ Plan to Work

Just Half of Americans Enjoy Bull Market

Personality Influences Path to Retirement

How and When to Retire

Know About the 401(k) Surprise

How Retirees Can Negotiate Drug Prices

Work vs Save Options Quantified

What’s a Geriatric Care Manager Anyway?

Geriatric Help Eases Family Discord

Retirement Pitfalls

Retirees Get a 401(k) Withdrawal Headache

Social Security Mistakes Can Be CostlyLearn More

Car driving in snow

Merry Christmas and Happy New Year!

Be safe during the holidays, whether you’re traveling across town or across the country to enjoy your family and friends.

We’re taking a break too at the Center for Retirement Research. This blog will return on Thursday Jan. 3 with a roundup of our readers’ favorite articles in 2018. …Learn More

Caregiver Guides Detail Financial Duties

The federal government has released online brochures to give people who are thrust into a caregiving role a better idea of what they’re getting into.

“It’s a big shock at first and a big adjustment,” an Episcopal priest says in the video above. He became his mother’s caregiver after she developed dementia.

But people who anticipate they will one day be a caregiver can soften the blow by studying up on their future responsibilities with the Consumer Financial Protection Bureau’s new guides to caring for a loved one.

The brochures are free and cover four financial responsibilities: guardian, trustee, power of attorney, and fiduciary for a Social Security or Veterans Affairs beneficiary.

They can be downloaded in English or in Spanish at the federal Consumer Financial Protection Bureau (CFPB) website, or the agency will mail them.

CFPB has also posted brochures detailing the caregiver regulations and laws specific to six states: Arizona, Florida, Georgia, Illinois, Oregon, and Virginia. The state guides each cover the same four topics: guardian, trustee, power of attorney, and fiduciary for a Social Security or Veteran Affairs beneficiary.

Non-profit organizations in Michigan and Texas have also published their own brochures on caregiver issues in their states – links to these brochures are also on CFPB’s website. …Learn More

Pumpkins

Holiday is Time to Recognize Our Readers

It’s the time of year to appreciate our readers. Thank you for supporting our blog on Twitter and Facebook too.

Squared Away, a retirement and personal finance blog, is sponsored by the Center for Retirement Research at Boston College.  To stay current on our latest blog posts, sign up for our free, weekly email alert with links to that week’s two blog posts.

Have a lovely holiday. …Learn More

salesman

‘Retire Rich!’ Don’t Believe the Sales Pitch

If an alien were to drop in to study earthlings’ retirement, it would have to conclude that saving is either nearly hopeless or super easy.

Many Americans approach retirement planning with dread – hardly surprising, given that only about half of working-age adults are on track to have sufficient savings to retire in the lifestyle they’ve grown accustomed to while working.

But there purports to be an easier way – and it’s on YouTube. Googling “retirement” turns up all kinds of outlandish promises of nirvana for regular folks.  Examples of YouTube titles are: “Retire Young. Retire Rich.” “Guaranteed Ways to Retire Rich.” “How to Retire in 10 Years – Much Easier Than You Think.” You get the picture.

Don’t be fooled. In a 401(k) world, what workers need is determination, planning, and persistence to ensure they’ll be prepared for old age.  YouTube offers only magic bullets.

Many of these exploitative videos are targeted to 20-somethings new to the financial world, who may be more vulnerable and persuadable. But perhaps they are also able to attract hundreds or even thousands of viewers because they offer easy solutions to what may be our most anxiety-producing financial challenge: Will I ever be able to afford to retire?

Yes, one video claims. Retire at age 40! The self-appointed retirement expert in this video, who does not identify himself, hides behind cartoon illustrations on a white board to display his mathematical comparisons of workers who started saving at different ages. The point of this exercise is that people who start early will wind up with a better-funded retirement, due to compounding investment returns, than those who start in their 40s or 50s. So far so good.

But things quickly go downhill when he claims that it’s possible for a 23-year-old to retire in 17 years. You “don’t have to work another day in your life, and you’re still able to do the things you want to do,” he says, allowing this tantalizing prospect to sink in with the audience. But his retire-at-40 scheme has a catch – and it’s a big one. To achieve this goal, a 23-year-old would have to save half of his or her income. Young adults are trying to achieve independence – not move back in with their parents to follow his financial prescription. …Learn More

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