January 5, 2023

50 Years of Financial Progress for Women

As the lower-paid sex, women have no shortage of insecurities about their retirement finances.

Only one in five working women feels “very confident” of being able to retire comfortably, the Transamerica Center for Retirement Studies reports in its annual retirement survey. More than half say they don’t earn enough or have too much debt to leave a lot of room for saving. Four in 10 expect to retire after 70 or not at all.

These insecurities probably reflect, to some extent, the poor retirement preparedness of Americans as a whole, not just women. In fact, women have made significant strides over the past half century. A new study documenting their personal and economic progress since the 1970s finds that their financial standing, compared with men, has improved.

Granted, women are still a long way from pay parity. But the improvements in retirement preparedness are impressive because they occurred despite the fact that women have become more independent – they are more likely to be living on their own and supporting themselves. Roughly two-thirds of boomer women born after 1953 either have never married or have been divorced for some part of their adult lives, according to the Center for Retirement Research.

What undergirds their personal and financial independence are college degrees and women’s growing participation in the labor force over five decades.

One in three baby boomer women born in the mid-1950s through the mid-1960s has a college degree – twice that of their mothers who were born during the Great Depression. Armed with the degrees, young boomer women flooded into the labor force. Three-fourths were working between their mid-30s and mid-40s, compared with 57 percent employment in the Depression-era cohort at that age. Men’s labor force participation has been much higher historically but barely changes over time.

Black women have always worked more than White women. But they too increased their labor force participation as they gained more education.

So how has women’s robust participation in the work world bolstered their financial security? …Learn More

August 17, 2021

Disability Discrimination and Aging Workers

A unique situation faces older workers with a disability: apply for federal disability insurance now or try to hold on and keep working to retirement age.

Of course, people who leave the labor force and apply for disability are taking a risk: they might be denied the benefits. But another possible factor in how these situations play out are state anti-discrimination laws to protect people with disabilities, including older workers, from employment discrimination. If these laws can reduce discrimination, could they increase employment and eliminate the need for some older workers to apply for disability?

A new study suggests that state anti-discrimination laws have prevented some disability applications – if the laws are broad enough to provide better protection to workers with disabilities.

The state laws deemed to be broader set a lower burden for proving that the individual has a disability than the standard in the federal Americans with Disabilities Act (ADA). Under the ADA, individuals must prove that their condition “substantially” impacts their ability to function. Under this high burden of proof, many individuals with disabilities were not considered disabled under the ADA and did not receive the federal legal protections from discrimination.

The researchers analyzed whether the broader state laws limited the growth in disability applications between 1992 and 2013 by making it easier for workers at or near retirement age to remain employed.

Disability applications increased during that period for a range of reasons, from the Great Recession to a long-term deterioration in older workers’ health. But the basis for this new study was an increase in disability applications tied to a 1983 reform to Social Security. The reform reduced retirement benefits by raising the program’s full retirement age. Disability checks, which were not reduced, became more attractive to older workers relative to their retirement benefits.

But the researchers found that disability applications did not increase as much – and sometimes not at all – in the states with the broadest disability discrimination laws. The laws were especially effective in reducing applications by people getting close to retirement age. …Learn More

August 3, 2021

Video: Secrets to Protect Your Aging Brain

Just a few weeks after my 64^th birthday, I discovered an interesting video. The timing couldn’t have been better.

The topic: maintaining brain health as we age. This video has tips, based on research, for preserving or improving memory and reducing brain inflammation, which is a culprit in cognitive decline.

“Daily lifestyle habits have a much bigger impact on your longevity than your genes,” Dr. Gary Small, former director of UCLA’s Semel Institute for Neuroscience and Human Behavior, explains in the video.

Did you know that Indian people have less dementia, because they eat so much turmeric in their curries? Or that a brisk 20-minute walk every day lowers the risk of Alzheimer’s disease? Most people know that yoga, meditation and tai-chi reduce stress, but did you know that stress is, according to Dr. Small, “the enemy of healthy aging”?

His message is encouraging: there are things you can control to help you live a good life in old age. “It’s easier to protect a healthy brain than to repair the damage,” he said. …Learn More

October 30, 2018

Retire in Boston or in Naples, Florida?

My husband is newly retired, and we’ve spent hours talking about where we might want to live after I retire in a few years. Our imagined scenarios are always changing.

But I’m clear on one thing: I do not want to buy a house in Naples, Florida, where a couple we know did recently. No offense to Naples, which has lots to recommend it – no shoveling! But the typical resident is 65 years old. In fact, Naples is older than the state of Florida, where retirement communities are so pervasive that they distinguish between the “young-old” (ages 60-75) and the “old-old” (over 75).

Boston, where my husband and I live now, couldn’t be more different. It is swarming with college students and young people, including his two sons and daughter-in-law. Boston’s young people work in rapidly changing industries like high-tech or environmental engineering, and I like it that way. Boston’s median age is 32 – half of Naples.

As I get closer to retiring and am faced with change, I think to myself, “Who wants to live in the midst of a bunch of old people like me?”

But that’s precisely what many retirees do. There are many examples of cities that have moved dramatically in the direction of one or the other extremes – Boston or Naples; Madison, Wisconsin, or Scottsdale, Arizona. The Wall Street Journal reported that new retirement communities are popping up in places that weren’t traditional resting places for snowbirds: retired baby boomers’ net migration to the Appalachian region where Georgia, North Carolina, and Tennessee converge has quadrupled since 2011.

This age segregation is a relatively new area of interest to demographers. Almost 60 percent of the neighborhoods and other subdivisions within U.S. counties have moderate or high levels of segregation, which is similar in degree to the level of segregation between the U.S. Hispanic and white populations, Richelle Winkler found in a 2013 study of federal Census data.

Age segregation also occurs in rural areas, as younger people leave for jobs and older people move in. In some rural parts of the Great Plains, Winkler writes, there are two times more seniors than young adults. …Learn More

October 11, 2018

The Marshmallow Test for Retirement

Walter Mischel, who used marshmallows to test children’s ability to delay gratification, died recently, but his lesson never grows old.

For those who aren’t familiar with his famous test, a young girl or boy sits at a table with a single marshmallow on a plate. The tester tells the child that he or she can eat the marshmallow right away, but waiting to eat it until the tester comes back into the room will bring a big payoff: a second sweet, puffy morsel.

Watching the children in this video squirm as they wrestle with their decisions brings to mind the adult equivalent. A desire for immediate self-gratification can come at the detriment of any number of personal financial decisions.

Like the marshmallow test, consuming now means having less money in the bank later.  The test also applies to deciding when to retire. Retiring becomes extremely tempting for baby boomers who want to escape from work after decades in the labor force.  But those who wait patiently for a few more years will have a sweeter retirement: a much larger Social Security check and more 401(k) savings distributed over fewer total years in retirement.

Children, when faced with the marshmallow test, struggle mightily to exercise self-control. They pick up the marshmallow to examine it, play with it, nibble it, and move it out of reach – but impulse gets the better of them, and they pop it into their mouths.

The lesson here is the same for children and adults: resist temptation and be rewarded. …Learn More

October 9, 2018

Switching Medigap Plans is Tricky

When Thomas Uttormark turned 65 in 2010, he researched his Medigap options on the Medicare.gov website and chose a plan with a premium of around $100 a month.

As his premium inched up over the next two years, he decided to apply to another insurance company to see if he could reduce the cost of his policy. Since the federal government dictates the coverage amounts under each of the 10 Medigap plans, he reasoned, his existing insurer’s Plan N provided exactly the same coverage as any other insurer’s Plan N – and the new plan might be cheaper.

“I thought it was no big deal to switch,” said the 73-year-old Uttormark.

However, switching did prove to be a big deal. His application was denied. He suspects it was due to his pre-existing conditions, which included a routine gallbladder surgery before he retired, and his cholesterol, blood pressure and acid reflux conditions, which are fully controlled with medications. The insurer didn’t give him a reason for the denial.

Uttormark ran headlong into a maze of federal regulations that determine whether, when, and how a retiree can transfer from one insurer’s Medigap plan to another insurer’s Medigap. One in four people enrolled in traditional Medicare have Medigap supplemental insurance – about 10 million retirees – and are affected by these restrictive regulations.

They are “particularly confusing,” said Casey Schwarz, the senior counsel for education and federal policy for the Medicare Rights Center in New York and Washington.

She said that people who’ve just signed up for Medicare Parts A and B routinely call her organization because they are having trouble sorting out their options and what they will be permitted to do in the future if they choose either Medigap, which is supplemental coverage for traditional Medicare, or Medicare Advantage private insurance after initially signing up for Medicare Parts A and B.

A handful of states have looser regulations than the federal rules – California, Connecticut, Maine, Massachusetts, Missouri, New York, and Oregon – and allow retirees to move more freely among various Medigap plans, though the states also have their own restrictions.

Schwarz explained that the insurance company denied coverage to Uttormark because he did not qualify for what the federal government calls “guaranteed issue.”

Under guaranteed issue, there is only one time when every Medicare beneficiaries is assured access to a Medigap policy: when they first sign up for Medicare Part B. At this time, insurers can neither deny coverage based on a pre-existing condition nor charge a higher premium if an applicant has a specific health condition.

Another guaranteed issue period applies to limited numbers of retirees. It gives retirees the right to buy a Medigap policy – even people with pre-existing conditions – if they lose their previous coverage through no fault of their own. Perhaps their current Medigap or Medicare Advantage insurer went bankrupt or left the state, or their employer ended its Medicare supplement for retirees. When this occurs, however, the retiree must select a new policy within 63 days of losing their old coverage.

Uttormark didn’t qualify for guaranteed issue because he was choosing to drop his Medigap policy for a less expensive one. Insurers can rightly “refuse to sell him a policy, can charge him more for pre-existing conditions, or refuse to cover his pre-existing conditions,” Schwarz said.

The federal rules also provide an opportunity to switch plans if retirees selected Medicare Advantage as their first form of insurance when they enrolled in Medicare. In this case, they are permitted to move into any Medigap policy sold in their area but they, too, have a restriction: they must do so within the first year of their initial Medicare enrollment.

“Medicare beneficiaries who miss these windows of opportunity may unwittingly forgo the chance to purchase a Medigap policy later in life,” the Kaiser Family Foundation said in a recent policy brief detailing the federal and state regulations.

The Medicare.gov website describes the circumstances in which beneficiaries qualify for federal guaranteed issue. …Learn More