September 18, 2014
On Moms, Deadbeat Boomers, and Utopia
This blog has a single writer posting just two articles a week. So it’s impossible to keep up with all the news that crosses the transom.
But perhaps because the work world is gearing back up this fall, there have been a lot of interesting stories lately about financial behavior. Here are three worth noting:
Fatherhood adds to paychecks – motherhood, not so much. A new study estimates that women actually face about a 7 percent “wage penalty” for each child. So, having two children reduces a woman’s hourly wages by 14 percent, according to a new study out of the University of Massachusetts at Amherst. In contrast, annual earnings for fathers are about 8 percent higher than similarly situated men who have no children. This research sheds more light on the wage gap.
Baby boomers are having to pay off college loans they took out decades ago. Some 155,000 older Americans are now seeing deductions from their Social Security checks to pay their federal student loans – up from 31,000 a decade ago – according to the U.S. Government Accountability Office. Parents often co-sign loans for a child’s education, but the GAO report says that about three out of four dollars of boomers’ loan balances are for their “own education.” Baby boomers never borrowed the large amounts that today’s steep college tuitions demand. But what’s not discussed in the report is that the garnisheeing of Social Security benefits may be due to a cultural artifact of the 1960s and 1970s – when attitudes toward repaying student debt were, well, loose. Laws requiring repayment have become more stringent.
Two lists of the best places to retire – domestic and international – have just been released. In both rankings, a favorable cost of living is among the most important factors pushing cities to the top.
WalletHub, a financial website, has identified the best U.S. cities for retirees as Tampa, Orlando, St. Petersburg, Scottsdale, and Grand Prairie, Texas. Based solely on affordability, Laredo, Texas, is No. 1.
The Algarve region on Portugal’s southern coast is at the top of Live Overseas and Invest’s list, based on everything from health care services and tax policy for ex-patriates to cost of living. Next on the list are Cuenca, Ecuador; George Town, Malaysia; Chiang Mai, Thailand; Dumaguete, Philippines; Pau, France; and Medellin, Colombia.