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Retirement Roundup: 2.8 million seniors have college debt

running out of money in retirement
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A digest of timely information and insight about finance, investing, and retirement.

2.8 million seniors have college debt | Squared Away Blog

The number of Americans over age 60 who are paying back federal or private student loans has reached a critical mass, quadrupling to 2.8 million over the past decade, a new report finds.

These older borrowers owe $23,500 on average, and two-thirds of them also have mortgages and credit card bills at a time their medical expenses are typically increasing, according to the report issued this by the Consumer Financial Protection Bureau (CFPB).

More than 2 million of the 2.8 million older borrowers took out loans to pay for their children’s or grandchildren’s educations, CFPB said. Relatively few owe money for their own or a spouse’s education, which was typically obtained when college was still affordable for a middle-class family.

Small companies have a big retirement problem | Bloomberg

At companies with fewer than 50 workers, not even half the employees have access to a 401(k) or pension, according to the Bureau of Labor Statistics. At companies with 500 workers or more, 90 percent of employees have access to a retirement plan. This gives large corporations a huge advantage in hiring talented people, and it leaves millions of Americans without an easy way to save for their futures.

Companies with fewer than 100 workers employ 36 percent of the U.S. workforce, or about 42 million people. And when small companies do have a retirement plan, it is likely to be astronomically more expensive than those offered by large companies. These high fees eat away at returns, making saving for retirement far more difficult than it needs to be.

Millennials may need to double how much they save for retirement | Washington Post

Wall Street analysts have pretty low expectations for how the stock market will perform this year.  And while it’s impossible to predict exactly what the stock market will do, investing pros over the past several months have been reducing their expectations for what they think the stock market will return, not only in the next year, but potentially over the next couple of decades.

If those gloomier outlooks hold true, workers saving for retirement today may not get as much from their portfolios in the long term as previous generations did. Advisers say that millennials, who are decades away from retirement, will need to save more – in some cases twice as much as they were saving before – to make up the difference.

Increases in interest rates on savings accounts remain slow to materialize | The New York Times

Savers hoping for higher interest rates on deposit accounts are probably going to have to wait awhile longer for yields on their savings to move upward. While the Federal Reserve decided in December to increase short-term interest rates, that hasn’t yet translated into significant increases in deposit rates paid out by banks on safe, federally insured deposits – the kind of accounts consumers might want to use for parking cash they expect to use in the next month or two.

5 practical steps to creating a retirement backup | CBS Money Watch

You’ve likely been planning your retirement for years and know exactly when you’ll retire and what you’ll do. But many people find themselves retiring sooner than they’d expected, due to a job loss, employment issues or poor health. Almost half of current retirees recently surveyed report that they retired before they’d planned. The Transamerica Center for Retirement Studies (TCRS) 2016 survey of workers found that just 25 percent of workers have a backup plan for retirement income if they’re unable to work sooner than their planned retirement.

Best and worst states to retire | CNBC

With more and more retirees responsible for their own financial security, almost half of Americans said they were “very concerned” or “terrified” that the rising cost of living will affect their retirement plans, according to a survey by insurance provider Allianz Life.

To stretch your savings, choosing the right destination once you’ve stopped working can make or break those lazy-day fantasies. Wallet Hub compared the retirement-friendliness of all 50 states and the District of Columbia. The top five states for those golden years include Florida, Wyoming, South Dakota, Iowa and Colorado.

Comments

  1. Dolores Williams says:

    Why don’t all officers of retirement plans, knowing the education debt and lack of pension plans for many, push for HR676, Expanded Medicare for All? Also instead of spending half of our tax money on wars (We are spending $1 billion/day on wars).

    Why did you not support Bernie Sanders who wants us to have Expanded Medicare for All, paid by adding 2% to the 7.5% payroll deductions. Earning $50,000/year the employee would have paid $200/year and saved $5,000/year. Employers would at about 4% to the payroll and would not be in the business of health care for their employees. They could be more competitive without the added expense of insuring employees for health care.

    That is only one item Bernie Sanders proposed but the media did not cover it and so many people were told that it was Hillary’s turn so threw Bernie undertake bus.

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