This Week In Your Wallet: New Retirement Info You Need To Know
Want to live longer? There may not be an app for that (actually, I’m sure there are many), but here’s a suggestion: Don’t retire. Perhaps not forever, but a study published in the the Journal of Epidemiology and Community Health suggests waiting until you’re post-65 has significant benefits. The research, which was cited in The Wall Street Journal, showed that among people who delayed retirement by one year (until age 66), risk of dying from any cause decreased by 11% during the study period. It continued to decrease for people who retired between ages 66 and 72. The analysis suggested differences in gender, lifestyle, education, income and occupation didn’t affect these benefits. Another promising find? Delaying retirement could delay age-related decline in physical, cognitive and mental functioning.
And the good news keeps on coming. Gallup has, for years, been asking people the question: Would you rather spend or save? This year, savers outnumbered spenders two-to-one, which is the biggest lead in the savers’ faction since 2001 when the research firm first started taking this particular poll. That may be a contributing factor in the growth of retirement savings. Bloomberg reported on Fidelity’s most recent quarterly analysis of retirement savers. So far this year, 13.6% of 401(k) participants have upped their savings rate, and employee contributions (combined with employer match and profit sharing) increased 12.7%. And FYI, U.S. News & World Report has five new retirement account rules to know about. They include a small bump in the amount you can earn and still qualify to contribute to a Roth IRA (eligibility now phases out between incomes of $117,000 and $132,000 for singles ($184,000 to $194,000 for couples). There’s a similar bump in the amount you can earn and still qualify for the saver’s credit (adjusted gross income cutoffs for 2016 are $30,750 for individuals, $46,125 for heads of household and $61,500 for couples).
Think Big (About Your Kids And Money)
How young is too young to allow your kids on social media? If you want your son or daughter to be the next Mark Zuckerberg or Sheryl Sandberg, chances are the ideal age for them to get involved is younger than you think — particularly if you’re willing to take on the role of nurturer for a certain type of innovative thinking. The Wall Street Journal suggests having them dive into the world of computers and social media early on (definitely before age 13) and raising your kids to be problem-solvers. One way: Teach them to treat every complaint as a learning opportunity by asking them, “How would you make it better?”
The Lower The Better
Moving on: Do you know what your credit utilization ratio is? (Or, for that matter, what a credit utilization ratio is?) It’s the percentage of available credit that you’re using on each card individually and on all your cards combined — and according to research from TransUnion cited by Money, the average cardholder under age 52 (in other words, millennials and Gen Xers) is using an average of 80% of his or her available credit. That’s wayyyyy too much. Your credit utilization ratio is responsible for about one-third of your credit score, and to make the most of it, you want to only be using at most 30% of your available credit and ideally closer to 10%. This, by the way, is not just a static measure. If, over the course of a month, you use more than 30% but then pay the bill off in full, it’s not helping your score. The best way to remedy the problem: Either pay off debt you’re revolving, or, if you use more than 30% on a regular basis, call your card company and ask for an increase in the credit limit.
Over Overdrafting
And in other problematic news for millennials: Many of us have gotten hit with an overdraft fee in our lifetimes, but CNBC recently reported on study results that it happens to millennials and minorities more than others. Unfortunately, overdrafts aren’t usually one-and-done scenarios. If it happens once to you, it likely happens multiple times. And people in their late teens through early 30s make up more than a third of “heavy overdrafters,” or people who pay more than $100 annually in overdraft fees, according to The Pew Charitable Trusts (author of the study). And nearly one in four “heavy overdrafters” loses a week’s worth of wages to fees.
So what can you do to avoid these pesky fees? Call your bank and ask if they can remove the charge — if you don’t overdraft often, they may oblige you (and the worst they can say is no). Beyond that, opt out of overdraft protection altogether. It may be embarrassing to belly up to the check-out counter and have your card refused. But what’s a little embarrassment when compared to a $35 fee?
Have a great week,
Jean
