New Year's Resolution: Save!

Resolve Amid the Financial Adversity

More than 60 percent of Americans who participate in their 401(k) retirement plans at work are adding more dollars to their debts than they’re socking away in those plans, according to HelloWallet’s analysis of recent federal data.

This shocking statistic suggests the need for some serious financial planning. Yet the vast majority of people in a recent survey said making a financial plan would not be among their 2014 resolutions.

Why not? Many said they “don’t make enough money to worry about” a financial plan, according to Allianz Life Insurance Company, which conducts the survey.

Okay. But if you feel unable or unwilling to write up a full-blown plan, perhaps you’ll consider one small step: …Learn More

Graphic: Top 10

Readers’ Favorite Stories in 2013

The blog posts that attracted the most readers this year provide a window into what’s on their minds. The 2013 articles shown below were the most popular, based on unique page views by Squared Away readers.

We’ll return Jan. 2 with more coverage of financial behavior. Please click here to begin receiving our once-per-week alerts with the week’s headlines – and happy holidays!

To find each article, links are provided at the end of the headlines:

An historical perspective on the U.S. money culture:

Oldest Americans are Lucky Generation

More Carrying Debt into Retirement

The financial challenges facing our youngest workers:

Retirement Tougher for Boomer Children

Student Loans = No House, No New Car

Help with your imminent retirement:

Reverse Mortgages Get No RespectLearn More

Spouses and Their Money: Getting in Sync

Money matters can get complicated for couples who may not see eye to eye. In a recent interview with Squared Away, Kathleen Burns Kingsbury, author of the new book, “How to Give Financial Advice to Couples,” shared her tips and insights for couples trying to meet in the middle.

Q: In a relationship, is money about more than just money?

Kingsbury: Money is often a reflection of our feelings about security, respect, love, power – it really symbolizes these things, whether we’re aware of it or not. So how a couple talks about money and manages their money is a reflection of how they relate to each other in other areas as well.

Q: Explain “money beliefs”?

Kingsbury: A money belief is a thought or attitude toward money that influences your savings, spending, investing and gifting every day. These beliefs tend to reside in our unconscious thought. Because we live in a society where money talk is taboo, we often don’t identify these attitudes. But money beliefs are formed between the ages of 5 and 15 by observing the financial behavior and attitudes of parents or people around us. And these money beliefs tend to be oversimplified, because they were formed in a child’s mind.

Q: Why is it important for husbands and wives to compare their beliefs?

Kingsbury: When couples are arguing about money, they may be arguing about which bills to pay or how to pay for a daughter’s college. But what’s really going on is they’re hitting up against their different money beliefs.

A: What’s an example? …Learn More

Photo: Gift cards

Navigating the Gift Card Thicket

Too many financial products are far too complex. The pre-loaded cards that people give as gifts during the holidays are a multi-billion-dollar example.

When buying these cards, it’s very hard to know what you’re getting and giving. The big things to watch out for are expiration dates and fees. This isn’t easy.

The federal CARD Act of 2009 covers cards issued by retailers for purchases in their stores and cards issued by banks for use in many places. The law bars these gift cards from expiring for five years after their purchase. They must also maintain their full value for a year. But after the first year, the CARD Act permits one fee per month, and a $5 monthly fee can chew up a $25 gift card’s value pretty fast.

It’s difficult to tell the difference between gift cards and prepaid cards, like Wal-Mart’s Bluebird or the RushCard, sold side by side on grocery store racks. But prepaid cards are not regulated at all by federal consumer protection law, while retail and bank cards are, said Christina Tetreault, an attorney for Consumers Union, the non-profit affiliated with Consumer Reports.

State regulations often offer further consumer protections – and add a layer of complexity for consumers. A card that works one way in a state with strong regulations, such as California, may have few protections if you mail it to a relative in Texas.

The following is just a sample of the intricacies of state regulations. …Learn More

Callout: How do your retirement plans stack up?

Compare Your Retirement to Peers

How are your retirement plans going? If you’re a conservative Generation Y investor, are you in the mainstream? Baby boomers, how many in your generation are planning to retire at the same age you do?

Compare yourself with your peers in this cool interactive quiz developed by the Boston mutual fund company, Fidelity Investments.

Click here to check it out.

As you answer each question, you can compare yourself with your peer group’s answer to that same question, based on a prior survey for Fidelity by the polling company, Gfk. Your peer group is determined by your income and your generation – baby boomer, Generation X and Generation Y. Fidelity also provides useful information and tips with each question. …Learn More

Photo: Crossroad signs of work and retirement

Laid-off Boomers: Retirement as Default

The natural reaction to losing a job is to get a new one.  But when older people become unemployed, some view it as a dilemma: look for work or just retire?

The presence of a financial safety net significantly increases the likelihood that an older, unemployed person will retire.  And that decision often comes quickly after they lose their job, concluded a new study by Matt Rutledge, an economist for the Center for Retirement Research, which supports this blog.

“The brevity of [their] jobless spells suggests that older individuals have little tolerance for a job search” and will “make a quick exit” if they have financial resources backing them up, Rutledge wrote in a recent summary of his research.

His findings get to the heart of the difficult choices facing older workers when they are laid off, no more so than amid the Great Recession when the jobless rate among people over age 55 hit a record 7.3 percent.  Rutledge tracked individuals between 55 and 70 who lost their jobs between 1990 and 2012. …Learn More

Photo: Red flower

Estate Planning 101: Who Knew?

Boston trust attorney Michael Puzo has seen it time and again: people procrastinate about writing a will or putting their estate in order.

“It forces them to face their mortality, and they don’t want to,” he said.

Even those with modest assets – a house, a 401k, and maybe a life insurance policy – should carefully make an estate plan.  But are the nuts and bolts of wills and estate planning widely understood?

This question loomed as Puzo translated these legal complexities in a way anyone could grasp during his presentation to employees of Boston College, where Squared Away is based.  For readers who may not know where to start, here are 10 fundamentals gleaned from his talk:

A good estate plan achieves four goals:

  • Distributes one’s assets to the desired person or people.
  • Ensures beneficiaries receive the money when you want them to.
  • Makes appropriate bequests either directly or indirectly through a trust, rather than a will.
  • Minimizes taxes.

When thinking about a will, get out a blank sheet of paper and write down everything of value that you own, whether it’s a checking account, the house, a wedding ring, or life insurance policy – and who you want to receive each of them.

Many people may be surprised to learn they “have more money than they think they have,” Puzo said.

The difference between probate and non-probate property is critical: …Learn More

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