October 22, 2020
Cognitive Decline Meets COVID-19 Scams
The federal government warns that older Americans are being targeted by a battery of financial scams, including telemarketers offering to do contact tracing – for a fee – or to reserve a slot for a future vaccine. Others are soliciting donations to charities purportedly helping people in need during the economic slowdown.
COVID-19 makes this a perilous time for people struggling with cognitive decline.
Few can escape a deterioration in their cognitive capacity as they age. It’s just a matter of degree and speed. But the faster it happens, the more damage it can do, the FINRA Investor Education Foundation concluded in a new study.
The study was based on surveys of more than 1,000 older residents in Chicago retirement communities and subsidized housing – average age, 80. The same people were periodically asked questions with varying degrees of difficulty about their general financial knowledge and investments and were asked to compare and calculate percentages.
The older people who either initially had less understanding of financial concepts or experienced a faster decline in their knowledge made poorer financial decisions in exercises that simulated real-world decisions.
This included a vulnerability to scams, which was assessed by asking the older people to agree or disagree with statements like this: “If a telemarketer calls me, I usually listen to what they have to say.” (Not recommended.) And this: “If something sounds too good to be true, it usually is” (Count on it.)
To prevent scams, older people – and their caregivers – need to anticipate the financial damage that cognitive decline can cause. …Learn More
September 10, 2020
Why the Mix of Disabilities is Changing
The mix of disabilities for people receiving federal disability insurance has changed in important ways that often reflect trends in the health of the population as a whole.
Two disabling conditions that have become a growing share of Social Security’s benefit awards in recent decades are mood disorders and various musculoskeletal problems, which include arthritis and back pain.
First, consider mood disorders. They range from depression and bipolar disorder to irritability and seasonal affective disorder, and they can hamper someone’s ability to work. Mirroring the rising share of awards for mood disorders, their prevalence in the population has edged up from 54.6 percent of adults in 1997 to 56.2 percent in 2017, according to a study by Mathematica, a research organization.
Second, disability awards to people with musculoskeletal problems like arthritis and back pain have increased dramatically. These conditions are often aggravated by carrying excess weight, so the rise in cases aligns with the researchers’ estimate that the adult obesity rate has surged from about 20 percent to 31 percent.
But a related finding about musculoskeletal conditions is more difficult to explain. Despite the growth in disability awards involving these conditions, the share of the population afflicted by them – about a third – hasn’t changed much, according to the study, which was conducted for the Retirement and Disability Research Consortium.
The researchers found one clue to this apparent contradiction in a separate analysis indicating that this population’s ability to work may be deteriorating over time. …Learn More
July 28, 2020
Retirement Research Presented Virtually
Like much in life under a pandemic, the research presentations for the Retirement and Disability Research Consortium’s annual meeting are going virtual.
This year’s online meeting will also be scaled down from the traditional two days to one: Thursday, Aug. 6.
The purpose of the meeting, which is usually held in Washington, D.C., is for academics from universities and think tanks to describe their latest research to colleagues, policy experts, financial professionals, and the press. Topics this year will include taxes in retirement, federal disability insurance, housing, health, and labor markets. The U.S. Social Security Administration has funded the research and is sponsoring the meeting.
The agenda and information about registration are available online, and participants can register anytime. Questions for the researchers can be submitted during the presentations via a moderator.
One fresh idea being explored this year is taxes in retirement. Taxes are central to whether retirees have enough money to cover their essential expenses, but households that are approaching retirement age may not factor the need to pay federal and state taxes into their planning. Despite the importance of this issue, only a handful of existing studies have tried to estimate the tax burden. This paper fills the gap.
One session will feature a pair of papers looking at whether cognitive decline has a detrimental effect on older Americans’ finances. One will explore whether dementia leads to financial problems overall, and the other will focus exclusively on debt.
Researchers will also try to resolve a conundrum in the disability field: why are applications for federal benefits declining at the same time that Americans’ health is deteriorating? One hypothesis is that jobs are becoming less physically demanding. A second disability study will produce a publicly available database for researchers who want to examine the local factors affecting applications.
The agenda lists all of the papers that will be presented. Learn More
March 24, 2020
If People Can Work Longer, They Will
A majority of adults believe there’s better than a 50-50 chance they will still be working full-time after age 65, a new study found.
The evidence suggests this goal is fairly realistic.
In the study, adults ranging in age from 18 to 70 were asked to rate themselves on a 1-to-7 scale for 52 different cognitive, physical, psychomotor, and sensory abilities that determine their capacity to work. These abilities run the gamut from written comprehension, pattern recognition, and originality to finger dexterity, reaction time, and vision acuity.
Of course, physical abilities decline with age. But when the researchers compared older and younger participants in the study, they found that many self-assessments of their abilities were very similar. For example, psychomotor abilities – such as hand steadiness, manual dexterity, and coordination – were at peak levels for the people in their 30s. But these abilities were only slightly diminished for the people in their 60s. And despite concerns about cognitive decline among older workers, the difference between 50- and 60-year-olds was minor.
The heart of the research, funded by the U.S. Social Security Administration, was determining whether each individual’s distinct set of abilities affected his or her work capacity, as well as how long and how much the individual intends to work as they age. This issue is important, because extending a career is a powerful way to improve one’s financial security after retirement.
To determine this capacity for work, each individual’s self-assessed abilities were matched up with the skills required to do nearly 800 different U.S. occupations. The researchers then calculated the percentage of these occupations each person would be able to do, given their education and training level.
Here are three of the central findings:
The more occupations people can do, the more likely they were to say they would work past 65.
Workers over 60 with a higher capacity to work said they would be more likely to remain employed even after 70.
One in four of the retirees with a very high capacity for work would consider “unretiring” and returning to the labor force. …Learn More
April 23, 2019
Boomers with Disabilities Often Retire
One in four workers in their mid-50s will eventually encounter difficulties on the job, because their bodies start breaking down or they aren’t as sharp as they used to be.
When a new, disabling condition is long-lasting, 63-year-olds – still a young age to be retiring – are two times more likely to stop working than other people their age, according to a new study by Mathematica, a Princeton, N.J., research firm.
The researchers started out with a fairly healthy group of 55-year-olds and followed their career paths through age 67. Strikingly, even people as young as 59 who have experienced a new work-limiting health condition leave the labor force at a much higher rate than those who did not. It’s inevitable that many, though not all, of the oldest workers in this group decide to retire, rather than find a new job.
Of course, the nature of the work factors into whether someone decides they have to retire. When older workers have physically demanding jobs, they are more likely to report a new disabling condition, the study found. It can be extremely difficult to soldier on in occupations such as construction or heavy industry.
With less physical jobs, however, it is more feasible to work longer even with a disability. For example, a lawyer or administrative assistant could conceivably keep working, even if it became difficult to walk.
In addition to the physical challenges, disability couldn’t come at a worse time financially for baby boomers, a significant minority of whom are not well-prepared for retirement.
They would benefit from staying in the labor force as long as possible to save more and hold out for a larger Social Security check every month. …Learn More
February 12, 2019
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