September 10, 2013
Making the Case for Working Longer
Remaining on the job for a few more years may not appeal to many older Americans who long to retire.
But in the above video, a compelling case for working longer is made by Steven Sass, an economist with the Center for Retirement, who also edits this blog.
Sass explains that delaying retirement improves a retiree’s financial security in three critical ways:
- The worker can continue to save money for a few more years and will have more time to earn investment income on his savings.
August 27, 2013
Reverse Mortgage Article Hits Nerve
Readers reacting to a recent blog post about reverse mortgages fiercely debated the financial product’s pros and cons, which they felt were missing from the article.
The July 25 article noted that fewer than 55,000 older Americans in 2012 used the federally insured loans. The advantage of a reverse mortgage is that Americans age 62 or older can borrow against some of the equity in their homes to generate much-needed income or create a financial cushion. The principal and interest are repaid when the retiree or his children sell the house.
Even though reverse mortgages are rare, the topic hit a nerve with readers, including lawyers, brokers, and people with elderly parents.
A mortgage broker named D. Gardner, for example, said that he’s often seen people use reverse mortgages to maintain a lifestyle they can’t afford, eliminating a financial option they may need later in life.
For some borrowers, he said, a reverse mortgage “was a means to paper over problems.” …Learn More
July 3, 2013
Happy Fourth of July
Squared Away will return next Tuesday with a new blog post and more news and research on financial behavior and retirement.Learn More
July 2, 2013
Readers Call Gen-X to Action
A recent blog article, “Retirement Tougher for Boomer Children,” did not elicit much sympathy for Generation X.
Many readers who commented expressed a sentiment something like this: Yes, things are tougher for young adults. So deal with it.
Members of Generation X, as well as Millennials, are largely on their own with their 401(k)s, in contrast to their parents and grandparents who may’ve had a guaranteed pension at work. But the evidence indicates young adults are not preparing for retirement: well over half of 30- and 40-somethings are on financial path to a lower standard of living once they retire, according to an analysis cited in the article.
They need to find “the discipline to save for retirement through all the means available,” said a Squared Away reader named Paul. …Learn More
May 16, 2013
Our Mission at Year 2
The best place to invest, the coolest cash back rewards, the smartest or cheapest or lowest-rate mortgage – infinite spin ushers out of the financial world every day, and it’s all aimed at you.
That’s among the reasons the Center for Retirement Research at Boston College started this blog in May 2011. The blog’s focus is not financial products but financial behavior: what people do, why we do it, and how we can do it better. At its two-year anniversary, the Squared Away Blog hopes that it has become a reliable source of information for a growing number of readers of all ages who struggle every day to save and invest for their own or their children’s futures.
It’s important to explain to readers what “reliable” means for a blog housed at a university think tank. First, it’s about credibility. We are not selling anything. The blog is supported by a grant from the U.S. Social Security Administration, which has an interest in making sure Americans get good financial information.
Second, Squared Away routinely covers the latest research – our own or others – about financial behavior, or we use it to inform other articles you’ll read here. That’s because empirical research, which uses statistical analysis to figure out what’s really going on, is critical to understanding and tackling our personal finance challenges. …Learn More
April 4, 2013
Webinar to Explain Social Security
In a webinar next Thursday, an official from the Social Security Administration will explain the fundamentals of calculating and claiming benefits.
Social Security represents the largest single financial resource for most baby boomers, so deciding when to file for benefits is their single biggest retirement decision.
The value today of that future stream of monthly checks – $287,200 for the typical household aged
55-64 – far exceeds the value of home equity or 401(k)s for most people, according to 2010 data from the Federal Reserve Board. And it often exceeds the value of their traditional defined benefit pension plan – if they even have one. The lower one’s income, the more Social Security matters too.
The webinar was organized by the National Retirement Planning Coalition for financial planners, who are not always familiar with all the rules for the program. But anyone can participate, according to the coalition leader, the Insured Retirement Institute. (Full disclosure: the Center for Retirement Research, which hosts this blog, is a coalition member). Space is limited and going fast for the webinar, which will also be available online a few days after the webinar on this website.
To register for the April 11 webinar, click here.
The following topics, among others, will be covered in the webinar, including: … Learn More
March 5, 2013
Video: Pension Problems Can Be Fixed
The Ontario Teachers’ Pension Plan has produced a terrific video that spells out how pension systems got into the trouble they’re in and proposes the outlines of what’s required to repair them.
The strength of this video is its broad sweep and perspective. It is worth watching for anyone interested in their children’s and grandchildren’s future financial security – as well as their own.
“Pension Plan Evolution” explains that U.S., Canadian, and other western retirement systems were built on the faulty assumptions that the future would keep producing enough younger workers to support retirees, 8 percent annual returns on investments, and economic growth that matched what the baby boom generation enjoyed in its prime.
Watch the entire video below. But if you only have time for the 1.5-minute trailer, click here.
To fix these systems’ finances will require shared sacrifices, the video concludes. The young should not pay for all of the mistakes of earlier generations who have resisted reforms to current pension systems – in other words, fairness matters. Solutions also require creativity in the design of systems that are able to adapt to future changes in the economy or circumstances.
About Squared Away
Learn more about our blog and its writer, Kimberly Blanton, a former Boston Globe reporter.
