On the Web

January 5, 2021

2020 was a year like no other.

But despite the pandemic, most baby boomers’ finances emerged unscathed. The stock market rebounded smartly from its March nosedive. And the economy has improved, though it remains on shaky ground.

Our readers, having largely ridden out last spring’s disruptions, returned to a perennial issue of interest to them: retirement planning.

One of their favorite articles last year was “Unexpected Retirement Costs Can be Big.” So was “Changing Social Security: Who’s Affected,” which was about the toll that increasing the program’s earliest retirement age could take on blue-collar workers in physical jobs who don’t have the luxury of delaying retirement.

COVID-19 in the nation’s nursing homes has caused incomprehensible tragedy. A nursing home advocate explained how this happened in “How COVID-19 Spreads in Nursing Homes.” And the mounting death toll in nursing homes surely confirmed a longstanding preference among baby boomers – as documented in “Most Older Americans Age in their Homes.”

Despite the economy’s halting recovery, layoffs due to COVID-19 still “may be contributing to the jump in boomer retirements,” the Pew Research Center said. Pew estimates that 3.2 million more boomers retired last year than in 2019, far outpacing the increases in recent years.

The layoffs have no doubt forced some boomers to start their Social Security earlier than planned, as explained in “Social Security: Tapped more in Downturn” and “A Laid-off Boomer’s Retirement Plan 2.0.” But unemployed older workers who are still too young for retirement benefits might apply for disability insurance, according to a study described in “Disability Applications Spike in Recession.”

Baby boomers hoping to ease into retirement on their own terms liked a pair of articles about ongoing research by Harvard Business School professor Teresa Amabile: “Mapping Out a Fulfilling Retirement” and “Retirement is Liberating – and Hard Work.”

Other 2020 articles popular with our readers included: …Learn More

Behavior

July 14, 2020

During the steel and coal busts of the 1980s, applications for federal disability benefits rose in areas where these industries had laid off workers. Now there’s a 21st century reason to apply: student loans.

College debt is extremely difficult to discharge in the bankruptcy courts. But the U.S. Department of Education in 2013 opened a new avenue for potentially eliminating federal student loan debt. Former college students whose disabilities are severe enough to qualify them for disability benefits can then apply to the Department of Education for loan forgiveness.

Since 2015, the typical person approved for the program has eliminated $17,500 in college loans.

The prospect of discharging the onerous debt created a powerful financial incentive. After the program began, the probability that an individual with student loans would apply for disability with the U.S. Social Security Administration was much higher than for individuals with no loans, a new study found. The increase in applications was largely from people who had not earned any money the previous year and may have had few options for paying their debt.

The older workers who took out student loans – sometimes on behalf of their children – may be “aching to retire” anyway, the researchers said, and receiving disability and loan forgiveness would accomplish that. But the younger people who applied may simply have been motivated by a desire to discharge their college debts.

However, seeking disability benefits as a strategy for eliminating the debt didn’t work very well. …Learn More