Posts Tagged "baby boomers"

Retirement’s a Struggle? Get a Boommate!

Soaring apartment rents and widowed or divorced baby boomers with spare bedrooms and inadequate retirement income – these two trends have conspired to drive up the number of boomers seeking roommates.

New listings being posted by homeowners between January and June on Silvernest, a website where boomers can search for potential roommates, doubled to 2,331 compared with the first six months of 2021, said Riley Gibson, president of Silvernest. Women account for two-thirds of the listings.

The end of the crisis phase of the pandemic and the availability of protective vaccines may have something to do with the recent surge in people being willing to share housing. And with rents up 14 percent in a year, renters – whether boomers or young adults – are looking for affordable options. “We often see [young] people are looking for an exchange for less rent – help around the house,” Riley said.

Millions of retirees still live alone and aren’t willing to let a roommate invade their space. Yet Jennifer Molinsky at Harvard’s Joint Center for Housing Studies estimates that more than 1 million older Americans currently live with non-family members.

Finding a “boommate” has multiple benefits. In this PBS video, what motivated Becky Miller, a retired receptionist, to find a roommate was the need to defray the cost of maintaining her home. But by renting to a fellow boomer, Debra Mears, Miller found more than just financial relief.

By sharing her home, she also found companionship. …Learn More

Caregiving’s Toll on Work Happens Quickly

Caregiving often wins out in the struggle between work and fulfilling one’s obligation to a family member or friend who needs help.

Researchers have documented the phenomenon of workers being forced to eventually leave their jobs so they can devote more time to the person in their care. But the impact on the work lives of the people who are new to their caregiving duties is often dramatic and happens very quickly, a new study finds.

Employment levels for workers who become caregivers declined by 6 percent within a year after they started, and most of the drop occurred because they left the labor force entirely, according to the analysis linking Census Bureau surveys on informal care with the Social Security Administration’s employment records for working-age adults.

The decline in employment may occur as early as four months after caregiving starts, based on a second analysis using only the Census data.

Caregivers who decide to stop working are also more likely to go on federal disability – either right away or years later. Many of the people receiving the benefits are older people who, despite their disabilities, had persisted in their jobs. Once they were needed by a family member, they may have decided to apply for disability to offset some of the loss of income from working.

Indeed, the largest employment declines were experienced by people over age 62, who often have an elderly parent or spouse in need of care – and sometimes both. For many of them, leaving a job coincided with claiming their Social Security benefits in an indication that caregiving is often pushing them to retire. Workers between 45 and 61 saw a smaller decline in employment after becoming caregivers.

Men’s and women’s paths from worker to caregiver are different, however. Women report small declines in their employment levels, and they return to the labor force relatively quickly. The impact on men is more dramatic and long-lasting. …Learn More

UI Benefits Can Get Caregivers Back to Work

Elderly coupleWhen older workers are laid off, the timing of the career disruption could not be worse – when they should keep working and saving for retirement. Their situation is even more precarious if a parent or spouse is in need of care.

A new study shows that people who become unemployed mid-to-late career are more vulnerable to being pulled into the demands of caregiving, which can derail their efforts to find another job.

Intensive caregiving spells usually kick in about four months after a job loss and can continue for up to 12 months – and possibly longer – according to the research, which was based on U.S. Census surveys of the unemployed prior to the pandemic.

“Family caregiving needs have the potential to turn short-term employment shocks into longer-run decreases in labor force participation, impacting the economic security” of future retirees, concluded Yulya Truskinovsky at Wayne State University.

But she also uncovered another factor in workers’ calculations: the generosity of unemployment benefits, which vary dramatically from state to state. The federal and state governments share the cost of the benefits, but states set the minimum and maximum benefit levels. During the pandemic, for example, the weekly maximum in Massachusetts was 3 1/2 times more than Mississippi’s, far exceeding the difference in the two states’ cost of living.

More generous unemployment benefits could cut one of two ways. They might give the worker enough income to support being a caregiver rather than returning to the labor force right away. The downside of taking so much time off is that it could be harder to eventually find a new job.

But the researcher finds that the opposite occurs: more generous benefits sharply reduce the likelihood that someone takes on caregiving duties after losing a job. Benefits that replace more of a worker’s earnings may make it easier to hire a professional caregiver or continue paying an existing one so the worker can focus on a job search. …Learn More

Pharmacist attending to a customer

Mortgage Payoff Frees Up Money for Meds

Paying off the mortgage frees up a lot of money for other things. The homeowners in one study splurged on big-ticket items.

Older homeowners, however, are adding another priority: medications.

After a mortgage payoff, workers and retirees ages 50 to 64 spent 50 percent more on prescription drugs in a comparison with households who had no major changes in their monthly housing costs, according to a new study by Harvard’s Joint Center for Housing Studies and funded by the U.S Social Security Administration.

The mortgage is typically a homeowner’s largest monthly expense. If medication spending rises when this big bill is eliminated, it supports the argument that some aging homeowners who are still carrying a mortgage may be choosing housing over necessary medical care.

This research is particularly relevant at a time older Americans are entering retirement with more debt. In 2016, four in 10 retirees had a mortgage – double the share in the late 1980s.

Not surprisingly, the researchers found some indication that lower-income workers and early retirees benefited more from eliminating their monthly payments. They have difficulty paying even for essential expenses, and the increase in their prescription purchases after paying off the home loan appeared to be larger than for higher-income groups with fewer constraints.

The researchers split the homeowners into two age groups – under and over 65. While homeowners under 65 sharply increased their drug spending after the mortgage payments ended, the Medicare beneficiaries did not.

The level spending after Medicare eligibility indicates that the program relieves some of the pressure on the family budget, the researchers said. Medicare also provides an average $5,000 annually to subsidize low-income retirees’ medications under the Low Income Subsidy program.

But for older homeowners who are too young to get Medicare but are still paying a mortgage, the study “raises serious concerns for health care quality and the costs to treat poorly managed conditions,” the researchers said.

To read this study, authored by Christopher Herbert, Jennifer Molinsky, Samara Scheckler, and Kacie Dragan, see “Older Adult Out-of-Pocket Pharmaceutical Spending after Home Mortgage Payoff.”

A blog post last year featured a similar study – this one about the older Americans’ adherence to medications after …Learn More

Documentary: Navigating a 401k World

Early in this new documentary, the director’s message seems to be that retirement finances are messy, elusive, and too complicated for mere mortals to understand. He’s right on all counts.

Filmmaker Doug Orchard reminds us in “The Baby Boomer Dilemma: An Exposé on America’s Retirement Experiment” that there are no easy solutions for Social Security, which economists predict will deplete its trust fund reserves around 2034. Closing the shortfall will probably require some combination of benefit cuts and revenue increases.

Social Security is “one of the most important problems we face as a nation,” The Wharton School’s Olivia Mitchell says in the documentary.

Our other primary program – a 401(k)-style retirement savings plan – seems great when the stock market is going up, as it has until recently. Viewers are reminded of the 2008 stock market crash, which panicked older workers who realized they might not have time to make up their losses before retiring. The stock market rises over long periods of time, increasing the money in retirement accounts, but it entails risks that can be unnerving for workers and force them into making bad decisions about their investments.

Finally, the filmmaker presents a real-world example – in Florida – of the difficult decisions workers grapple with in a U.S. retirement system that has largely transitioned from defined benefit pensions, which provide regular monthly income, to 401(k) and other defined contribution plans, which accumulate a pot of savings that retirees have to figure out how to manage.

“Baby boomers are sort of the guinea pig, and we’ve said, ‘Okay you figure it out guys,’ ” says David Babbel at Wharton. …Learn More

COVID Hasn’t Pushed Boomers into Retiring

Three months into the pandemic, a few million older workers had been laid off or quit. But what happened next?

The rapid drop in employment due to COVID gave the Center for Retirement Research an unusual opportunity to study the labor force decisions of baby boomers, who are within striking distance of retirement age but may or may not be ready to take the leap.

Traditionally, older workers who left a job tended to retire. But there was little indication that the people who stopped working during the pandemic saw retirement as their best fallback option.

This conclusion by the researchers is consistent with the pre-COVID trend of boomers working longer to put themselves in a better financial position when they eventually do retire. In fact, many older workers have returned to the labor force as the economy has rebounded and vaccines have become widely available.

Little impact on older workers retiringBut in April 2020, job departures spiked before settling back down at a new, much higher level. The annual pace of departures increased from 15 percent of workers 55 and over in 2019, prior to COVID, to 23 percent in 2020.

The researchers found a surprise when they looked at who stopped working. Although older people are vulnerable to becoming seriously ill from COVID, age wasn’t a big factor in their decisions. Boomers in their 60s were no more likely to leave their jobs than people in their mid- to late-50s, according to the analysis of monthly Census Bureau surveys.

The groups most likely to leave the labor force were women, Asian-Americans, and workers who either don’t have a college degree or don’t have a job that easily lends itself to working remotely.

But among all of the age 55-plus workers in the study, the share reporting that they had retired barely increased, from an average of 12 percent prior to COVID to 13 percent last year.

The only people who left their jobs and retired in significant numbers during the pandemic were over 70. This finding reinforced what the researchers found in data from the U.S. Social Security Administration: the pandemic didn’t have a major impact on retirement because the share of workers between 62 and 70 who signed up for Social Security was relatively flat between April 2019 and June 2021. …Learn More

Older Americans Felt Lonely in Pandemic

Last year, millions of older Americans went into hiding to protect themselves from the ravages of COVID-19.

Did the isolation take a psychological toll? How did they respond to infrequent contact with friends and family? Researchers in a recent webinar tried to understand the unique phenomenon of loneliness in a modern pandemic.

Over 50 and lonelyWhat we know from the National Poll on Healthy Aging in the early months of the pandemic is that more than half of older workers and retirees between 50 and 80 said they “felt isolated from others” – twice the levels seen in 2018.

In a different survey conducted every two months for most of last year, loneliness was “common and it was incredibly persistent during the first six months of the pandemic,” said Lindsay Kobayashi, a University of Michigan epidemiologist involved in the COVID-19 Coping Study, a survey of adults over age 55.

Two groups in particular suffered rates of loneliness that were twice as high as their peers: older people who live alone and residents of senior communities and nursing homes, where staff often separated the residents or confined them to their rooms in an attempt to protect their health.

A larger share of Black Americans also expressed feelings of loneliness than whites and Hispanics, and women were generally more lonely than men. “I’m very afraid that we are going to get so used to being alone, on our own, by ourselves that we won’t reconnect the way we need to,” a 76-year-old woman told the Coping Study researchers last fall.

But the news isn’t all bad. Feelings of loneliness, especially among the oldest retirees, had subsided a bit as early as November as news reports emerged that the vaccines were effective. Older people also found ways to cope with their isolation, and some even felt the pandemic gave them a renewed sense of purpose, according to a pair of studies in The Gerontologist. …Learn More