September 15, 2020
Deep Financial Woes Portend Rent Crisis
The economy shows some signs of improving. More than 1 million people went back to work last month, pushing the unemployment rate down to 8.4 percent.
But housing experts say a sure sign of trouble ahead is the crisis unfolding among the third of U.S. households who are renters. Things can only get worse for them, because so many were already vulnerable prior to the pandemic after many consecutive years of rising rents that strained their budgets.
Prior to the pandemic, Harvard’s Joint Center for Housing Studies estimates that more than 40 percent of U.S. renters paid more than 50 percent of their incomes for rent – far more than is affordable for most workers. And these rent-burdened households aren’t confined to the lower-income brackets; they extend into the middle class.
The end of the federal government’s $600 weekly supplement to unemployment benefits in July will increasingly strain renters too, said Whitney Airgood-Obrycki, a researcher at the center.
COVID-19 and the resulting recession “is piling on top of an existing affordability crisis,” she said.
This gloomy assessment is backed by other evidence that residents of the four largest metropolitan areas – New York, Los Angeles, Chicago, and Houston – are running out of resources and face “serious financial problems,” warns a report by NPR and Harvard’s T.H. Chan School of Public Health.
Over a third of the households in these four cities have already plowed through most or all of their savings to cover rent, mortgages, credit card bills and necessities, raising concerns they will not be able to “weather long-term financial and health effects of the coronavirus outbreak.” The situation is particularly bad for low-income families. …Learn More
July 30, 2020
Pension, 401k Registry Bill Resurfaces
When COVID-19 throws people out of work, their chances of retiring comfortably can deteriorate rapidly. What better time to find a new way to help?
A perennial proposal just reintroduced in Congress would do some good: establish an online database of employer retirement plans so workers and retirees can locate old pensions and 401(k) accounts.
Workers are increasingly responsible for making sure they have enough money to retire. But moving from job to job is now the norm – the one-employer career is a distant memory – and pensions get left behind and 401(k)s fall by the wayside. People who try to find old plans often can’t locate employers that have changed names, merged, relocated, or terminated a plan.
The primary way to find retirement plans now is through the lost property records kept by each state. But Anna-Marie Tabor, director of the Pension Action Center in Boston, which recovers lost pensions and 401(k)s for the center’s clients, said billions more in unclaimed funds can’t be located in the state records, because employers are not required to turn over plan information to the states. Also, 401(k)s are hard to find since many employers transfer small accounts to third-party IRAs without the account owner’s awareness.
Tabor argues in the Journal of Aging and Social Policy that the COVID-19 recession brings new urgency to passing the proposed Retirement Savings Lost and Found Act of 2020, especially for low-income workers hit hardest by layoffs and older workers who are running out of time to repair their finances prior to retiring.
“Connecting people with money they’ve already earned is an easy and inexpensive way to support the economic recovery,” she said. …Learn More
Originally posted at https://squaredawayblog.bc.edu/tag/house/