biking through amsterdam

Men Who Work Longer, Live Longer

In 2007, the majority of workers in The Netherlands were retiring by their early sixties to take advantage of the country’s generous pension scheme. Then came a sweeping 2009 policy that rewarded older workers with a tax break if they remained employed and active.

In a new study, researchers used this tax break – the Doorwerkbonus, or continued work bonus – to ask the question: do people who worked longer in response to this policy also live longer?  The short answer is “no” for women but “yes” for men. Delaying retirement increased men’s lifespans by three months, compared with a group that was not eligible for the bonus, possibly because working longer improved their health.

The tax break was the equivalent of a wage increase for all older workers in every sector of the Dutch economy. The bonus started as a 5 percent tax cut for working people in the year they turned 62, increased to 7 percent at 63, and 10 percent at 64. After that, the rewards from work dwindled, falling to 1 percent for everyone over 67. (In 2013, the size of the tax break was reduced.)

Prior to the new study, other researchers had examined whether earlier retirements caused people to die younger. But Alice Zulkarnain and Matthew Rutledge at the Center for Retirement Research took the opposite tack. They asked: were the Dutch living longer because they delayed retirement after the Doorwerkbonus went into effect?

While the policy did increase men’s life spans slightly, women seemed unaffected, because fewer of them responded to it by working longer.

Is there a lesson in the Doorwerkbonus for American boomers?  This study indicates that working longer will not only put more money in retirees’ pockets, it might also add to their life spans. …Learn More

women blowing sparkles

Depression Abates When Women Hit 60

Motherhood, career anxiety, menopause – women, throughout their lives, move from one psychological stressor to the next.

Well, ladies, there’s hope: your stress should start to ease around age 60.

With the #MeToo movement against workplace abuse of young adult women dominating the headlines, there’s a quieter movement of baby boomer women exploring what it means to get old. Book publishers are flocking to writers of self-actualization books like “Women Rowing North: Navigating Life’s Currents and Flourishing as We Age” and “50 After 50: Reframing the Next Chapter of Your Life.”

Perhaps publishers sense a market for these books because women of all ages suffer depression at rates two to four times higher than men. But a study in the journal Maturitas finds that many women shed their depression as they move from their mid-40s into their 60s.

To pinpoint individuals’ psychological changes over time, this study analyzed the group of women who participated in a telephone survey from beginning to end, 1992 to 2012.

The women, who live Melbourne, Australia, were asked a battery of questions to determine whether they were depressed – questions about whether they felt optimistic or discontented, socially engaged or lonely, impatient or cheerful, clear thinking or confused.

They were also asked whether they suffered from bad moods, which can be a precursor to depression. The researchers found that the women’s moods improved significantly as they aged. …Learn More

Careers Become Dicey After Age 50

A new study lays out all the difficulties older workers have holding onto a job so they can retire on their own terms – even when the economy is doing well.

Over the past quarter of a century, more than half of the older Americans who had been employed in stable jobs have been pushed or nudged out of employment at some point late in their careers. This could’ve happened due to a layoff, a bad supervisor, difficult or dangerous working conditions, inadequate pay or a missed promotion.

This finding from a Urban Institute study throws into question “the notion that most seasoned workers who are strongly attached to the labor force can remain at work and earn a stable income until they choose to retire,” the researchers said.

The study details the many challenges older workers are dealing with: …Learn More

Hispanic Retirement Outlook Gets Worse

One thing really stood out in a recent study: the deterioration in Hispanics’ retirement prospects since the 2008-2009 recession.

Retirement security by raceWorkers’ success at saving for retirement is becoming increasingly important to their financial security in old age. This puts Hispanic households at a clear disadvantage: they earn half as much as white households, which makes it that much more challenging to build retirement wealth by buying a house or saving more in their 401(k)s – two-thirds of Hispanic workers don’t even participate in an employer 401(k).

White Americans aren’t exactly in great shape either. Today,
48 percent of them are at risk of experiencing a drop in their standard of living after they retire – this is 6 percentage points higher than before the recession, according to a new study by the Center for Retirement Research. Black Americans are worse off than whites, though their situation hasn’t changed much over the past decade.

But 61 percent of Hispanic workers are at risk – a 10-point jump since the recession – the study found. A big reason is that Hispanic homeowners were hit especially hard by plunging house prices during the mortgage crisis in states like Florida, Nevada, Arizona, and California, where they are heavily concentrated. Their home equity values dropped 41 percent, a result of buying “houses in the wrong place at the wrong time,” the researchers said.

The loss of home equity has a big impact on retirees by reducing the amount they can extract from their properties by purchasing less expensive housing or taking out a reverse mortgage. (The researchers assume that when workers retire, they will use reverse mortgages.) …Learn More

house roof

Home Equity Offers Big Boost to Retirees

Retirees’ primary sources of income are the usual suspects: Social Security and employer retirement plans. They rarely use a third option: the equity locked up in their homes.

The Urban Institute recently quantified how much this untapped equity could be worth to seniors in the United States and 10 European countries if it were converted to income – and the amounts are significant.

The typical retired U.S. household has the potential to increase its retirement income by 35 percent, researchers Stipica Mudrazija and Barbara Butrica estimate. In Europe, using home equity would add anywhere from 19 percent in Sweden to 100 percent in Spain.
home equity in various countriesLearn More

Senior Housing Shortage is Getting Worse

Nearly 10 million seniors are having difficulty paying for housing – and the problem is growing.

Housing experts typically recommend that people keep their housing costs below a third of their income. But one in three Americans over age 65 are spending more than that on their rent or  mortgage payment, utilities, property insurance, maintenance, and other housing costs, according to a new study, “Housing America’s Older Adults,” by Harvard’s Joint Center for Housing Studies.

costburdensover65If the senior housing problem hasn’t reached crisis proportions yet, Jennifer Molinsky, who wrote the center’s report, predicted that it will if nothing is done to increase the supply of housing structures that are both affordable and age-friendly to meet the needs of aging baby boomers. The number of households over 80 will more than double over the next 20 years, the housing center estimates.

“Unless we create more options for people at the middle- and lower-income levels, we are going to be seeing that people have fewer choices and that they’re forced into options they don’t want,” she said. …Learn More

Parents’ Education Key to Child’s Security

“Seven Up,” a famous British documentary series, interviewed 7-year-old schoolchildren in 1964 and filmed them every seven years after that.

Over the documentary’s 49-year span, viewers watched the children’s lives take shape. A boy at an upper-crust boarding school goes to college and on to teach math at a prestigious private school. A girl educated in a working-class school in London’s East End is just able to make ends meet as an adult. A young equestrian from a wealthy family raises her own privileged children. A boy in an orphanage becomes a bricklayer.

These personal profiles at the heart of “Seven Up” reverberate in a recent, unrelated, academic study that has reached a similar conclusion: parents’ investment in educating their children is the ticket to financial security as an adult.

The researchers estimated that people with the college-educated fathers earned nearly $400,000 more over their lifetimes (at today’s pound-dollar exchange rate) than the people from less-educated families. They analyzed periodic surveys of 9,436 people in England, Scotland, and Wales between ages 7 and 55. …Learn More

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