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How to Track All Your Money From One Place
Tweet Share on Facebook May 24, 2013 CommentBack in the earlier days of the Internet, scads of startups were drawn to the flame of using the Net to gather and make sense of mounds of financial information. Their holy grail was a single service that would hold all of a consumer's financial and investment information, creating a valuable new asset that would bring them riches, and make consumers happy in the process. One of that period's hot tech phrases was "screen scraping" – creating software tools that would automatically collect such information and make sense of it.
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Don't Get 'Framed' When Claiming Social Security
Tweet Share on Facebook May 22, 2013 CommentWe've been framed, at least when it comes to deciding when to begin taking Social Security benefits. According to behavioral economics research, the way seniors are presented with information about Social Security benefits has a big impact on their decision.
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Why Social Security Needs Separate Treatment
Tweet Share on Facebook May 21, 2013 CommentLike the fiscal Bobbsey twins, Social Security never seems to travel without its beleaguered entitlements companion, variously called health care, or Medicare, or sometimes Medicare and Medicaid.
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5 Ways Money Can Buy Happiness
Tweet Share on Facebook May 20, 2013 CommentPsychologists have been busy testing the premise that money can't buy happiness. Nobel prize-winning economist Daniel Kahneman has garnered lots of attention with research that says this largely is true. Beyond about $75,000 in annual income – enough to fund a moderately comfortable lifestyle – more money does not make people much happier, he said.
Not so fast, say two young academics. Elizabeth Dunn, an associate professor of psychology at the University of British Columbia, and Michael Norton, an associate professor of marketing at Harvard Business School, have written a new book called "Happy Money: The Science of Smarter Spending." In the book, they make a persuasive case that money does have the ability to buy happiness, and it's not how much money you have that matters, but how you spend it.
Much of the "money can't buy happiness" school of behavioral thought rests on a concept called hedonic adaptation: The human brain rapidly adjusts to what it senses. What's new today becomes ho-hum tomorrow. And so it is with material acquisitions. That shiny new car gives us immense happiness when we drive it off the lot. But we soon get used to it, and it ceases to provide much happiness. Ditto for other possessions.
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Gen X and Late Baby Boomers Face Bleak Retirements
Tweet Share on Facebook May 17, 2013 CommentUnless Gen Xers and late baby boomers are able to make big changes in their savings, spending and debt habits, they are on track to become the nation's first generations to fare more poorly than earlier groups of retirees, according to a new study from the nonprofit Pew Charitable Trusts. At the same time, early baby boomers who have already reached traditional retirement age are in relatively good shape for their later years.
Pew looked at five groups of Americans and measured each group's financial losses from 2007 to 2010.
Depression babies – born between 1926 and 1935 and now 78 to 87 years old; median net worth was $207,500 in 2010 and had not changed from 2007.
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Failed Retirements a Growing Global Concern
Tweet Share on Facebook May 15, 2013 CommentIf misery really does love company, then America's aging baby boomers are due for a global group hug. Citizens in a 12-nation survey overwhelmingly reported they are not ready for retirement and expect retirement outcomes to be worse for future retirees than for those who have already retired. The survey was conducted earlier this year and polled about 12,000 people. It was sponsored by Aegon, a large global financial services firm, and the Transamerica Center for Retirement Studies.
"The situation has become more dire than just a year ago," Aegon said in its 2013 Retirement Readiness Survey. "People in general feel less prepared for retirement and do not adequately understand the steps they need to take."
The survey presented a retirement readiness index and said none of the dozen countries fared well. German citizens are in the best shape for retirement, but Germany's national score was only in the upper range of the lowest-ranking category. And readiness was worse in 2013 for all countries compared with last year, due primarily to rising levels of uncertainty about the economy and investment performance.
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6 Key Steps in Retirement Planning
Tweet Share on Facebook May 14, 2013 CommentComing to terms with the realities of your later years can be one of the toughest challenges of aging. America is obsessed with youth, and even acknowledging the inevitability of aging may be considered a form of cultural disloyalty.
So let's accept and applaud that 80 can be the new 60, that millions of baby boomers will reinvent themselves during their 60s and 70s and that stereotypes about being old in America will be tossed out in favor of more positive images of vibrant old age.
Even so, we will still get old. After all, isn't that the goal of today's enhanced emphasis on taking better care of ourselves? To age successfully, however, we will also need to contemplate important aspects of our later years, up to and including plans for our death.
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10 Reasons Critical Illnesses Pose Retirement Risk
Tweet Share on Facebook May 13, 2013 CommentHealth care clearly has emerged as the greatest financial risk faced by retirees. The incidence of expensive chronic diseases is higher for today's retiring baby boomers than it was for their parents. Longevity gains have added years to average life spans, but these extra years may seem more curse than blessing if they are spent dealing with serious illness and unaffordable medical bills.
Doesn't insurance cover these things? Not exactly. Basic Medicare leaves retirees on the hook for a 20 percent co-pay with no cap. Supplemental Medicare policies can close much of this gap. But they don't cover most long-term care expenses, and neither does Medicare.
The Employee Benefit Research Institute says a 65-year-old couple with median drug expenses would need $283,000 to have a 90 percent chance of covering their out-of-pocket drug expenses during the remainder of their lives. And this total does not include long-term care.
[Read: 7 Threats to Your Retirement.]
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The Real Obstacle of Health Insurance Exchanges: American Consumers
Tweet Share on Facebook May 10, 2013 CommentThe new state health insurance exchanges are the cornerstone of the most important feature of the Affordable Care Act. The law aims to help millions of uninsured people get coverage in 2014, and the exchanges are the mechanism through which this will happen.
To meet the 2014 timetable, the state exchanges are supposed to be operational by Oct. 1 – in time for consumers to participate in the annual enrollment period for selecting next year's coverage.
[Read: How to Do Your Homework on Health Care Reform.]
Even if federal and state officials were swimming in perfect harmony, achieving this objective would be difficult. And, of course, harmony is hardly a word associated with the contentious law passed in 2010. Many states, primarily those governed by Republicans, have decided not to set up their own exchanges but instead let the federal government do it for them. Another group is working on a series of partnership efforts with the feds, and a third group is building their own exchanges.
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How to Talk to Parents About Their End-of-Life Wishes
Tweet Share on Facebook May 8, 2013 Comment
