Posts Tagged "baby boomer"

uber driver

Older and Self-Employed – a Satisfied Group

The transition to retirement can take many paths.

A couple years ago, Joelle Abramowitz at the University of Michigan described three groups of self-employed workers over 50. The bulk of them work independently, either as independent contractors or doing odd jobs, and are more often minorities, with very low pay and few employee benefits. Think Uber driver. The other two groups are business managers and business owners, who are predominantly white, male and in good financial shape.

In a follow-up to her earlier research, Abramowitz dug into 24 years of data to understand the self-employed older workers’ attitudes toward work and the transition to retirement. She found a heterogeneous group with a range of views about whether they are transitioning at all.

The independent contractors and workers stand out for being more likely to describe themselves as “partially retired.” Although they are self-employed, they apparently have their eyes on retiring. In addition to gig workers, they might be a caregiver, a stylist in someone else’s salon, or someone who drives people to the airport for a chauffeur company.

These workers have started their current jobs more recently than the owners and managers and say the work itself is not particularly stressful, which could indicate one of two things – that the job is less challenging than their past work or that its main purpose is just to generate extra income to bridge the financial gap to full retirement.

The owners and managers are much less likely to consider themselves in any stage of being retired, even though their roles may be changing. Their level of engagement reflects that. They usually work 30 to 40 hours and feel more stressed than the independent self-employed workers or older employees who are still on a company payroll. …Learn More

Job Ads Signal Young Workers are Preferred

The Age Discrimination and Employment Act states that job ads “may not contain terms and phrases that limit or deter the employment of older individuals.”

Yet some job ads do just that. One ad posted in 2014 sought applicants with “3 to 7 years (no more than 7 years) of relevant legal experience.” More often, employers use subtle language in their ads, asking, for example, that the applicants be “energetic.”

This subtle strategy is highly effective, according to researchers at the University of Liverpool and the University of California at Irvine.

In their field experiment using fake job ads that contained subtly discriminatory language, older workers submitted applications at significantly lower rates than younger workers. Job ads designed to deter older applicants “can have roughly as large an impact on hiring … as direct age discrimination in hiring,” the study concluded.

This research may have less relevance at the moment since unemployment is at historic lows and employers have been desperate for workers. But the economy has slowed in recent months and age discrimination in hiring is a well-established issue in the labor force.

The goal of this new study departs from past research on age discrimination in hiring, which focused on employers that get ample applications from older workers but then discount them as candidates. This new study highlights a different concern – that job ads with subtly discriminatory language discourage them from applying in the first place. …Learn More

Most Boomers Don’t Rely Solely on SSA.gov

In 2000, Social Security launched a website allowing retirees to sign up for their benefits online without having to call or visit the agency. By 2013, about half of new retirees were using this feature to file their claims. However, progress stalled after that, despite continued growth in the number of baby boomers who were retiring.

A new survey of 2,600 people between ages 57 and 70 finds that even the people who sign up for their benefits online often wind up contacting Social Security for assistance. In the end, only 37 percent of all retirees claim completely online and never visit a field office or call the agency’s 800 number at some point during that process, suggests research by Jean-Pierre Aubry, a researcher at the Center for Retirement Research.

The boomers who are the most likely to complete the entire application online are college-educated people who are comfortable banking or filing their taxes, according to Aubry’s study. At the same time, older people of color are more hesitant to sign up for their benefits without calling or visiting their local Social Security office.

Given Social Security’s staff shortage and budget constraints, both the agency and retirees would benefit from fewer calls and visits. Fortunately, the share of retirees who apply for benefits exclusively online is likely to increase in the future. It is second nature for young adults – regardless of their race or whether they went to college – who grew up with cell phones in their hands to manage their finances online or buy things. When they start retiring, they will be more at ease than their parents with signing up for benefits without speaking with someone at the agency.

But there are things Social Security could do to increase online activity now. The agency already provides a personalized online statement that details eligibility and benefit levels for workers of all ages who create a my Social Security account. Based on the survey of older workers, Social Security could make it easier to get answers to basic inquiries such as whether an application, once submitted, is being processed. …Learn More

Problem? Medicare Rights Center Can Fix it

He is a one-time heart surgery patient and vulnerable to COVID. She has to take her medication religiously twice a day to prevent a blood pressure spike.

Image of Mr. and Mrs. Quader.

Mr. and Mrs. Quader.
Source: Medicare Rights Center.

During the pandemic, Mr. and Mrs. Quader of Brooklyn, New York, got a notice that the health care subsidy they had been receiving through the Medicare Savings Program for low-income retirees had been terminated.

Luckily, counselors on the Medicare Rights Center’s telephone hotline solved the couple’s problem – just like they have helped tens of thousands of retirees nationwide every year that the center’s New York City helpline has been operating.

“They knew where to go. They knew what to do,” Mrs. Quader said in one of several video testimonials posted to the Medicare Rights Center’s website. “They stood by us every time.”

She made the call to the center because she had just happened to hear about it. It turned out the Quadar’s paperwork had been lost in the system, and the couple’s counselor got the benefits restored.

Rose. Source: Medicare Rights Center.

Rose.
Source: Medicare Rights Center.

The Medicare Rights Center’s services, which are free of charge, cover myriad problems retirees encounter under Medicare, such as how to appeal insurance company denials of coverage for treatments or medications. The counselors also solve unique problems like that of a 66-year-old woman named Rose. The Plant City, Florida, resident needed a replacement wheelchair but had received one she was unable to use, rendering her immobile. The center got her a chair that worked for her.

“When I sat down in that chair for the first time, it was nice and cushy,” she said in a Medicare Rights Center video. “I could finally go [outdoors] and see the light.”

Many people who call the center need help with simpler issues like enrolling in Medicare Parts A and B or sorting out their options for additional coverage. Bill’s enrollment problem was much more complicated. …Learn More

Early Life Traumas Lead to Early Retirement

little girl choosing and taking book from shelf to readMental illness, obesity, smoking, chronic disease – researchers have been able to connect the dots between an array of stresses early in life and how people will fare as they age.

New research zeroes in on the adversities experienced by children and young adults that ultimately contribute to a premature retirement due to a disability.

The basic finding is not terribly surprising – that life’s financial and social circumstances can lead to disabling conditions that will either nudge, or force, older workers to leave the labor force early.

More remarkable is the exhaustive list of past experiences that can increase that risk.

For example, childhood financial adversity in this study took many forms – an unemployed father, family relocations for financial reasons, or even having few books in the house. People whose families struggled financially when they were children were the most likely to retire prematurely.

The study was based on surveys asking older working people born during the Baby Boom, the Depression, and World War II about stressful or traumatic events experienced in childhood and middle age. The researchers followed them through several years of surveys to determine who retired before turning 62. The early retirees were asked whether a medical condition or chronic disability was either an important reason for leaving the labor force or prevented them from continuing to work altogether.

Added to the childhood traumas are a range of social adversities faced by young and middle-aged adults – the death of a spouse, natural disasters, combat duty, divorce, violence, or having a child addicted to drugs – that also increased the likelihood of early retirements. …Learn More

Parents Work Less After Kids Leave Home

When children grow up and become financially independent, how do parents adjust their finances? Are they finally spending money on themselves? Saving more for retirement? Paying down debt?

No one has come up with a convincing answer yet. Especially puzzling is that past research has shown that parents seem to reduce their consumption after the adult children move out. Yet there’s no evidence that much of the extra money is going into 401(k)s. So what’s going on?

A new study for the first time finds a missing puzzle piece: parents, freed from the obligation to support their children, are choosing to work less.

Parents work one to two hours less per week after their adult children leave home for good, according to researchers at the American Enterprise Institute and the Center for Retirement Research.

Consistent with this finding, their household income declines roughly 4 percent because they’re working fewer hours or finding less demanding jobs with lower pay.

Reaching this conclusion required a series of steps. First, the researchers broadened the definitions of saving and consumption used in earlier studies to see if that shed any light on the issue. Finally, they looked at the parents’ decisions about work.

In the past, the estimates of saving had largely been confined to putting money in 401(k)s. Perhaps something could be learned by counting paying off a mortgage or other debts as a form of saving. But the researchers still found no evidence parents are paying their debts off faster after the kids leave.

So where is that extra money going? …Learn More

Explaining Social Security’s Earnings Test

The reduction in benefits for some people who collect Social Security while simultaneously working is frequently called a “tax.”

It is not a tax. Under a Social Security rule known as the Retirement Earnings Test (RET), some benefits are withheld if the worker earns above a certain level – $19,560 in 2022 – and has not yet reached his full retirement age under the program. At that age, the government starts paying the deferred benefits back incrementally.

As older workers plot a path to retirement, they should have a clear understanding of this financial impact. But a new study finds they have a poor grasp of the tradeoff that is the central feature of the RET: a smaller monthly check now, while they’re working, in return for a bigger check later.

Failing to understand this concept has real world consequences. Retirement experts encourage boomers to work as much as possible to improve their finances. But someone who doesn’t understand the RET might decide against working more to prevent a perceived benefit cut.

The researchers experimented with how to improve understanding of the RET by showing some 1,000 older workers numerous graphic representations of the financial impact. The best way to illustrate the study’s main finding – that a bar chart emphasizing the shift in benefits from now to later worked best – is to focus here on two pairs of blue bar graphs.

Some workers saw a simple bar graph (below, left) showing that the individual who fully retired at age 62 would receive a $1,000 monthly benefit for life. A second bar graph (below, right) showed a smaller benefit –  about $750 per month – for someone who started Social Security at 62 while he was still working. At 67, his full retirement age, the benefit jumps to about $1,100 when Social Security starts paying back the withheld amount.A second group of workers also saw the simple bar graph (above, left) of the 62-year-old retirees’ stable $1,000 benefit. But the second bar graph (below) illustrated the shift in benefits for a Social Security recipient who is still working.Learn More