Millennials have good reasons to obtain coverage now. Do you plan to buy life insurance before you turn 40? Maybe you should. You may save money in the long run by doing so. At first thought, the idea of purchasing a life insurance policy in your thirties may seem silly. After all, young adults are now marrying and starting families later in life than past generations did, and you and your peers are likely in excellent health with a good chance of living past 80. In fact, LIMRA – a life insurance research and advocacy group – recently surveyed millennials
HOUSEHOLD SENTIMENT GAUGE RISES AGAIN The University of Michigan’s Index of Consumer Sentiment gained 0.4 points from its preliminary reading this month to reach a final January mark of 98.5. That represents a 12-year peak for the index, which stood at 92.0 in January 2016.1,2 HOME SALES FELL IN DECEMBER Given costlier mortgages, rising prices, and tight inventory, the December retreat for resales was not surprising. The National Association of Realtors said that existing home sales slipped by 2.8% last month. New home sales dropped 10.4%, but the Census Bureau stated that they increased 12.2% for 2016, marking the
Take a moment to see if you are adequately protected. Not all home insurance policies are alike. Coverage amounts obviously vary, and so do coverage areas. Taking ten minutes to scrutinize what your policy does (and does not) cover is a wise idea.
LARGEST INFLATION ADVANCE IN 5 YEARS
The Consumer Price Index rose 2.1% in 2016, marking its greatest annual gain since 2011. During 2015, consumer prices only increased by 0.7%. December saw a 0.3% rise for the headline CPI and a 0.2% gain for the core CPI (which excludes food and energy costs). The core CPI gained 2.2% last year.1
Does your spouse contribute to a 401(k)? You are probably eligible for a retirement plan that can help you save and invest for retirement in the same way – a 403(b).
First offered in the late 1950s, 403(b) plans actually predate 401(k)s. School districts and non-profit organizations commonly offer these retirement savings vehicles to their employees.1
How much can you contribute to an IRA or workplace plan this year? In 2017, you have another chance to max out your retirement accounts. Here is a rundown of yearly contribution limits for the popular retirement savings vehicles. IRAs. The 2017 limits are the same as in 2016: $5,500 for IRA owners who will be 49 and younger this year, $6,500 for IRA owners who will be 50 or older this year. These limits apply to both Roth and traditional IRAs.1 What if you own multiple IRAs? This $5,500/$6,500 limit applies to your total IRA contributions for a calendar
Will you have enough money to make ends meet? You may have heard that people spend less once they are retired. Statistically, that is true. The question is whether a retiree has enough income to meet his or her expenses. Ideally, retirees should be able to live comfortably on 70-85% of their end salaries and draw their retirement fund down no more than 4-5% per year during a 30-year retirement. Are these two objectives realistic for the average retiree household?1,2 According to the most recently published Bureau of Labor Statistics data, a household maintained by someone 65 or older had
Can You Work Your Way into Retirement? As 2016 ended, the 17th Annual Transamerica Retirement Survey appeared and noted a preference for a phased retirement among a majority (53%) of workers polled by the insurance and investment company’s Center for Retirement Studies. In fact, 48% of the pre-retirees surveyed felt that their current employer would allow them to continue working in some capacity after age 65. How many employers are okay with workers staying on the job past 65? Perhaps more than many of us may assume: 72% of the workers Transamerica talked with said that their employer
RETAIL SALES RISE 0.6% All of this December gain can be attributed to increased car buying and gasoline purchases; in fact, retail sales were flat with those two categories removed. Analysts surveyed by MarketWatch had projected a 0.8% December advance. Census Bureau data shows that online sales rose 13.2% in 2016, while department store sales fell 8.4%.1,2 CONSUMERS MAINTAIN OPTIMISM AS 2017 BEGINS The University of Michigan’s preliminary January consumer sentiment index was little changed from the final December edition – just a tenth of a point lower at 98.1. In January 2016, the index was at 92.0.
Will it make a difference in the quality of the advice they receive? Next year, the Department of Labor is scheduled to introduce new rules regarding retirement planning. Under these rules, any financial services industry professional who makes investment recommendations to workplace retirement plan participants or IRA owners in exchange for compensation will be considered a fiduciary.1 What does that mean? It means that this person has an ethical and legal duty to provide advice that is in your best interest.1 Many investment and retirement planning professionals have reacted to the DoL’s move with “We already do that.” After all,
THE YEAR IN BRIEF After a bearish start, 2016 ended up being a good year for the bulls. The Dow Jones Industrial Average sold off 6% in January, dropping below 15,500 as investors worried about sinking oil prices and a slowdown in China’s economic engine. Eleven months later, the blue chips were nearing the 20,000 mark. Wall Street rode through the market shock brought on by the Brexit, rallied after Donald Trump’s presidential election victory, and priced in an interest rate hike by the Federal Reserve. Energy futures saw huge yearly gains. The housing market maintained its momentum, even as
RISING WAGES, MODERATE HIRING IN DECEMBER The Department of Labor’s latest employment report shows the average hourly wage at $26.00 last month, up 2.9% in a year. That is the largest annualized wage increase seen since June 2009. Payrolls expanded by 156,000 additional hires in December, leaving total 2016 job growth at a 5-year low of 2.2 million. (This could be a sign of the labor market reaching full employment.) The headline jobless rate ticked up to 4.7%, while the U-6 rate encompassing the underemployed was at 9.2%.1 MANUFACTURING ACTIVITY PICKED UP AS 2016 ENDED Investors liked what they
How can you plan to do it? What kind of financial commitment will it take? How many of us will retire with $1 million or more in savings? More of us ought to – in fact, more of us may need to, given inflation and the rising cost of health care. Sadly, few pre-retirees have accumulated that much. A 2015 Government Accountability Office analysis found that the average American aged 55-64 had just $104,000 in retirement money. A 2016 GoBankingRates survey determined that only 13% of Americans had retirement savings of $300,000 or more.1,2 A $100,000 or $300,000 retirement fund
A review of Q4 2016 THE QUARTER IN BRIEF Two events strongly influenced U.S. and foreign financial markets in the fourth quarter – one unexpected by many, the other widely anticipated. Neither of them particularly upset investors. Donald Trump’s win in the presidential election led to a rally on Wall Street, and the Federal Reserve’s December interest rate hike was taken in stride, even as our central bank’s monetary policy stood out globally for its hawkishness. The S&P 500 ended up gaining 3.25% in three months. The United Kingdom scheduled its Brexit, and OPEC elected to trim oil output for
We may need to change them to better our financial prospects. Our relationship with money is complex & emotional. When we pay a bill, go to the mall, trade in a car for a new one, hunt for a home or apartment, or pass someone seemingly poor or rich on the street, we feel things and harbor certain perceptions. Are our attitudes about money inherited? They may have been formed when we were kids. We watched what our parents did with their money, and how they managed it. We were told how important it was – or, perhaps, how little
$1.1 billion has been garnished from retirement benefits to pay back old student loans. Do you have a federal student loan that needs to be repaid? You may be surprised at what the government might do to collect that money someday, if it is not paid back soon enough. If that debt lingers too long, you may find your Social Security income reduced. So far, the Department of the Treasury has carved $1.1 billion out of Social Security benefits to try and reduce outstanding student loan debt. It has a long way to go: of that $1.1 billion collected, more
THE MONTH IN BRIEF While the Dow Jones Industrial Average did not top 20,000 in December, it did advance nicely, gaining 3.34%. The Federal Reserve took its interest rate target to 0.50-0.75%, adjusting the federal funds rate for just the second time in two years; around the world, other central banks held rates steady, and one even pledged additional easing. Oil prices jumped. Closely watched consumer confidence and purchasing manager indices rose, and unemployment declined. Home sales improved even as mortgage rates neared highs unseen since 2011. Wall Street and Main Street seemed optimistic about the economy’s future.1,2 DOMESTIC ECONOMIC
A SURGE IN CONSUMER OPTIMISM The Conference Board’s consumer confidence index continued to climb in December. Analysts polled by MarketWatch projected a reading of 110.0 for the gauge, but it beat that forecast, rising 4.3 points to a 15-year peak of 113.7. The major factor in the gain? Growing expectations of a better economy, particularly among older Americans. The CB’s monthly expectations index reached a high unseen since December 2003.1,2 PENDING HOME SALES SLIP Housing contract activity declined 2.5% in November, according to the latest research from the National Association of Realtors. In October, pending sales were up by just