Millennials and Money: Women Trail Men

Millennial women may have higher expectations about their financial prospects than their baby-boomer mothers.

But Millennial women, just like their mothers, are earning less than their male counterparts and saving less for retirement.

The vast majority of single and married men and women, ages 22 through 33, said they recognize the need to save, whether as a defense against economic uncertainty or in response to the onus on each U.S. worker to prepare for his or her own retirement.

A major reason cited for not saving is “not having enough money to save right now.”  This is especially germane for women: for example, the median annual income for Millennial women is $45,000, while their male counterparts earn $61,000.

Women, on the other hand, would make wiser choices about what they’d do with a $5,000 windfall: they’d be less likely than men to spend the windfall and more likely to save it or use it to pay down debt.

Harris Poll conducted the nationally representative online survey of 1,600 Millennial households for Wells Fargo. In addition to single Millennials, married and single mothers were also surveyed, and child-rearing responsibilities likely reduced the incomes reported by women.

Nevertheless, Millennial women trail their male peers in five financial benchmarks shown below:

Learn More

Feature

Financial Savvy Means More 401k Returns

Financial knowledge is critical to one’s retirement security, finds a new study showing that 401(k) plan participants who scored higher on a test of their financial knowledge earned an additional 1.3 percentage points of investment returns annually on their retirement accounts.

Over a 30-year working life, that higher rate of return would add 25 percent to total savings at retirement.

Readers can take the quiz by clicking here; answers appear at the end of this blog post. …Learn More

Best States for Growing Old

Minnesota, Washington, Oregon, Colorado, Alaska, Hawaii, Vermont, Wisconsin, California and Maine – these states may be the best places to grow old.

They came out on top in AARP’s new State Scorecard based on their access, cost and the quality of their care services for aging adults and on their supports for the most common form of caregiver – family members.

To see your state’s overall ranking, run your cursor over the map below. To see how your state ranks on other measures, click here.

Enid Kassner, an AARP vice president who helped developed the rankings, said the Scorecard is useful to the leading edge of the baby boom generation, who will start turning 80 in 12 years. For example, if having a say in selecting the individual professional who will provide care, such as bathing, dressing, or meals, is the top priority, California is the best place to be. …Learn More

Retiree Health Plans Considered

Retiree health benefits are a luxury item.

In 2013, just 28 percent of government and private-sector employers with more than 200 employees offered health benefits to their retiring workers, down from 66 percent in 1988, according to the Kaiser Family Foundation.

Bar chart showing large firms who offer retiree health benefitsThese plans are popular with workers, but their declining prevalence has a silver lining.

A long history of research shows that people who can retain their employer health benefits if they retire tend to retire earlier, confident they’ll be insulated from extraordinary medical expenses that could wipe out their savings.

Here’s the silver lining when retirees lose that coverage: by inducing them to remain in the labor force longer, perhaps until their Medicare starts, it improves their retirement security in other ways. …Learn More

Social Security: Vale La Pena Esperar

Waiting to claim Social Security is good for retirees’ financial health – none more so than the U.S. Latino population.

This message is delivered in Spanish in the above video, “El Seguro Social: Vale la Pena Esperar.” The video was produced by the National Academy of Social Insurance, a policy research non-profit, and Squared Away found it on the website of Latinos & Economic Security.

Latinos & Economic Security, which is part of UCLA’s Center for Policy Research on Aging, said Latinos make up 7 percent of the U.S. population age 65 and older. But due to their lower incomes during their working years, Latinos are more reliant on Social Security than are Asian-American, African-American and white, non-Latino retirees, the organization said.

Its research also shows that Social Security provides at least 90 percent of the income of well over 40 percent of elderly Latino couples. So it pays to delay and increase the size of that monthly pension check. …Learn More

Aging, but Oblivious

Older people often wonder why young adults get tattoos that they’ll later want to remove.

In this Ted video, psychologist Dan Gilbert says tattoos are a good example of a universal error in thinking. …

Learn More

feature

Depression Up After Pension Benefits Cut

Sudden changes in older workers’ financial expectations for retirement can cause depression, according to a 2011 study.

The study, which came out of the Netherlands, suggests that cuts in Dutch pensions, announced on very short notice, produced feelings of differential treatment and a loss of control that increased the incidence of depression among the workers who were adversely affected.

Workers were tested for depression two years after a 2006 pension reform reduced the share of their salaries replaced by the government-mandated defined benefit pension plans provided by employers.

Workers born in 1950 and after suddenly learned their “replacement rate” – the percent of pay the pension replaces – would drop to 64 percent, from the 70 percent initially promised.  Everyone born before 1950 was unaffected.  To replace the lost benefits, workers facing the cut would either have to save substantially more or work an additional 13 months. …Learn More

...102030...5051525354...607080...