May 30, 2013

How do you stack up on financial practices?

The latest study by FINRA of Americans' financial practices, the "State-by-State Financial Capability Survey" reveals: 
-"Fewer than half, 41%, of Americans spend less than they make.
-Over a quarter, 26%, have unpaid medical bills and those under 34 years old are more likely to have them than those who are older.
-More than half, 56%, have no rainy-day savings enough to cover surprise financial distress.
-Over a third, 34%, pay only the minimum amount on their credit cards.
-Younger Americans are more likely to show signs of financial stress.
-Of five basic questions about personal finance, the national average was 2.88 correct answers."
The full survey report is available at
All the more reason to attend Financial Planning for Women and get reinforcement for your positive behaviors!

529 College Savings Plans is topic for July 10 FPW

Most Americans don’t know what a 529 college savings plan is, according to a survey by Edward Jones. The tax-advantaged investment plans facilitate saving for tuition and other costs while benefitting from a variety of tax breaks. Not surprisingly the study revealed that wealthier Americans know more about 529 plans than less affluent respondents. Although ideally suited to long term saving for a child’s education (usually by parents, grandparents, and other relatives), 529 plans can be used by adults as well. Come to Financial Planning for Women on Wednesday, July 10 at 11:30 or 7 pm to learn more. Check the other blog posts for info on 529 plans by searching for “college savings” and “529.”

May 29, 2013

Aging Parents and Children Should Talk About Finances

Children may be reluctant to ask aging parents about their estate and financial affairs, but information shared can prevent confusion later.” Read the details on by Tara Siegel Bernard.

May 28, 2013

Forget the 3-legged stool: Multi-level pyramid + strategic SS claiming

“Time to replace the three-legged-stool myth; a multilevel pyramid is a better analogy for retirement income.”  The pyramid consists of five components: Social Security, homeownership, employer-sponsored retirement plans, individual retirement accounts and other assets.” The author suggests adding part-time employment, as well. Retirees should consider spending some of their retirement investments in the early years of retirement and “deferring Social Security benefits until they are worth more later.” For example, “Financial Engines research showed how a newly retired married couple, where the wife is 62 and the husband is 66, could boost their potential lifetime Social Security income by more than $130,000 by exercising some creative claiming strategies.”
The September 11 Financial Planning for Women speaker, planner Suzanne Dalebout, will address how to maximize Social Security benefits through strategic decisions on when to claim benefits.  Each year of delaying SS benefits results in an 8% increase in the monthly benefit so it can be prudent to spend retirement funds in IRAs and employer sponsored funds first in order to claim a larger Social Security payout by delaying receipt of benefits.  Mary Beth Franklin explains the new approach in the Investment News; she also writes for Kiplinger Personal Finance Magazine, one of my favorite information sources.

May 25, 2013

Millennial: In debt and NOT saving for retirement

“Young Americans are more focused on paying off debt than they are on saving for retirement, and that can be a mistake, experts say. Those ages 22 to 32 can miss the chance to ride out market fluctuations if they don't invest early, says Karen Wimbish of Wells Fargo. A survey by Wells Fargo shows that 87% of millennials say they have too little money to save. ‘That's concerning," Wimbish says, "because this generation, more so than any other before them, is going to be primarily if not solely responsible for whatever their retirement looks like.’”

Squared Away: Best blog for reliable financial planning info

You'll note that many of my blog items direct you to the source: The Squared Away Blog from the Center for Retirement Research at Boston College. Squared Away provides reliable research-based information. Check it out on a regular basis and sign up for occasional emails at

How many retire on their own terms?

Half (52%) of workers born in 1946 are fully retired. “Of those who are fully retired, 38 percent said they were ready to retire (they wanted to be through with work), 17 percent said they retired for health reasons and 10 percent said they lost their jobs. The rest retired for other reasons -- simply because they could afford to or because they wanted to join a retired spouse.” So more than one-fourth did NOT retire on their own terms but were “forced” into quitting by poor health or job loss. So not everyone gets to call the shots as to the terms of when to retire. Fully 43% report starting to collect Social Security benefits “earlier than planned.” And “only 20 percent feel good about their personal finances.” Check out the MetLife Mature Market Institute’s report:  "Healthy, Retiring Rapidly and Collecting Social Security: The MetLife Report on the Oldest Boomers."

May 17, 2013

Americans want to strengthen & pay for Social Security, not cut it

According to a new study, "Support for Social Security is particularly strong among African Americans and Hispanics, according to a brief released today by the nonpartisan National Academy of Social Insurance (NASI). Strengthening Social Security: What Do Americans Want: Views Among African Americans, Hispanic Americans, and White Americans finds a sharp contrast between what Americans say they want and changes being discussed in Washington, such as cutting benefits by using a “chained” Consumer Price Index (CPI) to determine Social Security’s cost-of-living adjustment (COLA)."
“A true test of Americans’ support for Social Security is their willingness to pay for it,” said Jasmine Tucker, Senior Policy Analyst at NASI and author of the brief. “Americans across racial and ethnic groups say they don’t mind paying Social Security taxes because the program helps millions of people and because they and their families benefit from it." Read the brief at

3 skills teens need to learn about money

"The most important money-management skills to teach teenagers are how to manage a limited budget, how to save a portion of income and how to avoid building up credit debt, Karen Cheney writes. Get teens set up with a bank account and debit card and let them manage their expenses for clothes and entertainment, for example, and get out a calculator to show how compound interest works." Learn more at:

May 16, 2013

Delaying Social Security “is the best deal in town”

You can’t always get what you want.  But if you try sometimes you just might find you get what you need. Rolling Stones, 1969.
“There is nothing better that most people can do to get what they’ll need in retirement than delaying when they start collecting Social Security.”  According to analysis by the Center for Retirement Research, the payoff for delaying claiming Social Security retirement benefits is “enormous.”  For example, “take someone who’s 60 and could get $10,000 per year by claiming Social Security today. That would increase to more than $13,000 per year by waiting until 66 and to more than $17,000 by waiting until 70.”  Read the details on the Squared Away blog:
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