To be Old is to be Happy

age and happiness chartAround age 58, people start getting happier. That’s what the research shows, and this blogger can attest to it.

In the new video displayed below, Rocio Calvo, a Boston College professor of social work, offers up theories for the happiness phenomenon – financial security is one. She also has some particularly striking “happiness statistics” on Hispanics and immigrants.

All over Boston College, academics are studying aging issues, which complement the financial and economic research turned out by the Center for Retirement Research, which sponsors this blog.   Calvo’s video is part of a series of videos by the multidisciplinary Institute on Aging at Boston College.

It’s interesting viewing for older people and their families, with apologies for the regression table (the significance of which quickly becomes clear if you stick with it).

Learn More

Employers Chop Down College Loans

Edward, Ashley, and Kirby Cash

Edward Cash would really rather spend his hard-earned paychecks from the Memphis Police Department on his daughter than on humdrum necessities like student loans, replacing a broken-down car, or saving.

“I need money, as much money as I can to take care of this new human in my life,” Cash said about 4-year-old Kirby.

Of course, he and his wife, Ashley Cash, a Memphis city planner, pay their bills, in between doting on Kirby.  But college loans are different: they get help.  The city government pays down $50 a month on each of their loan balances – as it does for some 600 employees.

In May, Memphis joined Fortune 500 companies in the vanguard of employers offering this benefit, including to its police force, which requires some college education, and the fire department, where time in college is not required but also not uncommon.

With college debt exceeding $1.4 trillion nationwide, help with student loans appeals to young employees, who say in surveys that paying them off is their No. 1 financial priority. Recognizing this, major employers are using the tuition benefit to recruit talent, including Fidelity Investments, Live Nation, Natixis Global Asset Management, Pricewaterhouse Coopers, and Staples Inc., according to company and media reports. …Learn More

logos

The Lyft Economy: it’s a Side Job

platform economyDriving around major U.S. cities, it seems like every other car has a Lyft or Uber logo in the back windshield.

These ride-sharing apps are prominent players in the increasingly popular “platform economy,” which links sellers with buyers of their goods and services, from used couches and basement junk to handymen and car rides. This is one corner of the fast-growing gig economy, which also includes freelancers and the self-employed.

But who takes on these jobs, are they long-term or short-term endeavors, and how reliant are participants on the income they generate through online platforms or apps?

Scouring its database of transactions in the bank accounts of 240,000 bank customers who participate in the platform economy, the JP Morgan Chase & Co. Institute has put together a completely anonymous but interesting profile of the participants in this ever-present, but little-understood part of the economy.

Despite a proliferation in platforms, Fiona Greig, director of research at the JP Morgan Institute, said it’s fairly clear from these data this usually is not U.S. workers’ first choice for earning a living.  Most people, “are not relying heavily on this,” she said.  While users have to sell their wares on a piece-rate basis, “the flexibility that this offers makes for the perfect opportunity to add income.” …Learn More

portlandia art

Portlandia Trashes “Instant Garbage”

Hilarious examples of “instant garbage” are offered up in this Portlandia clip by the show’s characters, Bryce Shivers and Lisa Eversman (played by Fred Armisen and Carrie Brownstein).

The price point for an unwanted consumer product that becomes instant garbage is $4.99.  “We found the exact point between price and hassle that guarantees you won’t bother returning” the product, Eversman explains in the video below.

Is the following theory a stretch? There seems to be a direct line between Americans’ relentless buying of stuff we do not need and our inadequate attempts at saving money.

Try walking into a craft superstore or browsing Target’s $1 shelf and suddenly imagining the stuff all piled up at its ultimate destination, the local landfill.

Then walk back out and save the money for retirement.


Learn More

Report: Healthcare a Middle Class Crisis

Chart: underinsuredThe state of the nation’s health care system includes these incredible facts:

  • Americans with health insurance who are “under-insured” have more than doubled to 41 million since 2013. They now make up 28 percent of adults.
  • Geographic disparities can be stark. Nearly one in three Floridians and Texans is under-insured, compared with one in five in California and New York. Not surprisingly, insurance deductibles are higher in Florida and Texas.

Much has been made of the fact that many Americans can’t afford their deductibles and out-of-pocket costs when purchasing polices under the Affordable Care Act (ACA).  The new report by the healthcare advocacy organization, The Commonwealth Fund, indicates that both ACA-insured and employer-insured Americans are frequently stretched to the limit.

Middle-class incomes for a family of four range from about $58,000 to $115,000.  The definition of middle-class people who have health insurance but cannot afford it is well-established in the research: their deductibles or other annual out-of-pocket costs exceed 10 percent of their annual household income. (For the poor, the threshold is 5 percent.) …Learn More

Flaming numbers

Older Savers Inch Ahead: $135,000 in 401k

The typical baby boomer couple had $135,000 in retirement savings last year, up from $111,000 in 2013 amid a rising stock market and a strong job market that has kept them employed, according to a report on the new Survey of Consumer Finances (SCF) by the Federal Reserve.

Yet $135,000 – the balance for working couples who have a 401(k) – won’t go very far. This amount, held in both their 401(k)s and IRAs, will generate about $600 per month, said the SCF analysis by the Center for Retirement Research, which supports this blog.  That’s obviously not enough to supplement most retirees’ primary source of income: their Social Security benefits, which are slowly eroding for various reasons.  The purchasing power of the $600 will also be eroded by inflation over time.

Another way to assess retirement preparedness for 60-year-olds couples hoping to retire in five years is that they need assets equal to 8.5 times their household income at age 60.  They actually have around 2.5 times income, on average, the researchers found. This assumes a replacement rate of 75 percent, a reasonable target for how much of a working couple’s income they will need to maintain their standard of living into retirement.

It’s Halloween today, and here is more evidence of just how scary Americans’ retirement prospects are: the $135,000 applies only to older people with retirement savings – about half don’t have a retirement plan at all at work. …
Learn More

Gen-X, Millennials: Now is the Time

figureGeneration X and millennials, there is time.

In contrast to baby boomers, who are now mostly too old to rack up appreciable increases in their 401(k)s – though they should try – younger Gen-X and millennials have time and compounding investment returns on their side.

This blog examines how they are faring – millennials, because saving and investing well now poises them for a secure retirement, and Gen-X because this “ignored” generation is sandwiched between the financial demands of parenting and parent care.  Their own assessments of their retirement preparedness appeared in a recent report by the nonprofit Transamerica Center for Retirement Studies (TCRS).

Millennials

“Millennials have heard the word that they need to save for retirement,” TCRS declared in its report summarizing its 2016 online survey of more than 4,000 workers.

Millennials’ ages are up through 37 in this survey.  Nearly three out of four who have 401(k)s at work are already saving for retirement. They typically started saving at 22, indicating impressive foresight about retirement dates far in the future.  Gen-X, ranging in age from 38 through 51, didn’t get started in earnest until they were 28.

While it’s great that millennials are saving for retirement, women in particular are not saving enough, said Catherine Collinson, president of TCRS. Among workers who participate in their employer’s 401(k) or similar plan, the survey finds that the typical millennial woman contributes only 5 percent to her plan, compared with 10 percent for millennial men.

Millennials aren’t taking advantage of their uniquely long investment time horizon, the survey finds. Retirement experts encourage younger adults to more aggressively invest 401(k)s in the stock market to enjoy decades of the long-term growth and compounding investment returns and potentially ride out the market’s inevitable volatility. Theoretically, if the stock market’s history proves true, equity-investing millennials can build up substantial retirement accounts, accumulating employers’ contributions and their own contributions and investment earnings over time.

But many millennials came of age during the 2008 financial crisis and still seem to be “in a state of shock with their concerns about the stock market,” Collinson said.  One in five millennials say they are investing conservatively in bonds, money market funds, and cash.

Generation-X

Baby boomers will be the last generation with substantial access to traditional pensions. Gen-X is the first generation to heavily rely on defined-contribution accounts. …Learn More

12345...102030...