Money Minded Gifts: Financial Planners

Are you trying to give the budget conscious friend in your life something a little more exciting than cash? One option may be arranging a session for them with a financial planner. A financial planner can help your friend create a plan to save for retirement, start a budget, or offer solutions for their current financial issues. There are two kinds of financial planners: Fee Only and Commission Based. Fee only financial planners charge a flat fee or an hourly fee for financial advice. They do not receive commissions from mutual funds or other financial products that they recommend. Commission based planners receive a commission on the investments they sell, so they may be biased towards investments that will offer them a commission. A Fee Only financial planner is a good option if you're purchasing a session for a friend, since you're able to buy one session at a time and they're less likely to be biased. But make sure you ask how they're paid: One survey found that some planners that called themselves “fee-only” were receiving commissions on investments they sold.


Because a session with a financial planner can be pricey, Candice Choi at the AP recommends "pooling resources with friend or family" and asking if the planner offers gift certificates. You may also want to find free financial planning clinics that you could recommend to a friend. Add your recommendation to a holiday card and maybe a financial planning book, and you have a financially savvy, money-minded gift for your friends and family. To find free financial planning clinics, check the Certified Financial Planner Board website. The CFP's clinics only use certified financial planners and the clinics are completely free of charge.

The Economic Recession and its Impact on the Educational-Loan Industry

As a college senior, Laura Myers is well-versed in taking care of business. A student at the George Washington University in Washington, D.C., she has juggled the roles of student, athlete and intern with the characteristic deftness of the modern day overachiever. Unfortunately for Myers, this year’s mid-semester crunch brought more than exams and early morning swim practices; in October she received notice from the Office of Financial Aid that the lender for her Stafford loan was no longer offering government-insured loans.

“It was a bad surprise that totally threw off all of my finances. I had to take out a loan to pay my rent for the month,” Myers said.

Myers is not the only student who was forced, mid-semester, to re-apply for a federally guaranteed student loan from a different lender. According to Jane Bryant Quinn of the Washington Post, approximately 70 private and nonprofit lenders have ceased to offer government-insured loans. Unable to acquire the funds to lucratively sustain these programs in the wake of the economic crisis, these lenders have begun to pull out of the educational-loan industry.

Typically, education loans are securitized following dispersion. The loans can then be invested by stockholders with the intent of accruing the interest, according to Finance professor Ehud Ronn of the University of Texas at Austin. Because of the current financial atmosphere, such investments have tapered off drastically. This causes the loans to dry up, so to speak. Fortunately, measures are being taken by the government to assuage current circumstances. In early November, the U.S. Department of Education announced that it will purchase $6.5 billion in “federally guaranteed student loans from the 2007-08 year to ensure loans remain available to students in the future.” This plan aims to buy upwards of $500 million in loans weekly until February 2009.

If you intend to borrow money through the private, FFEL market, be warned that you will be faced with increased restrictions and less than liberal lending practices. According to Quinn, those most susceptible to this new level of conservative lending are students with low credit scores (less than 650 out of 800), new borrowers and those who have parents with “adverse credit histories.”

If you are worried about your prospects for attaining a Stafford or PLUS loan through FFEL, contact your university’s aid office for assistance. They can offer you information on the lenders that are still in the market in addition to such alternatives as the Direct Loan Program, a program that allows parents and students to receive loans directly from the Department of Education instead of having to go through the banks.

Job Opportunities Amidst the Recession: The Merits of Career Roads Less Travelled

In the wake of the current economic recession, employment prospects seem mediocre at best. Recent large-scale layoffs seem to be unfavorable indicators of employment for recent and future college graduates. While the current economic atmosphere can certainly be disheartening, there are jobs out there. If you’re in the market for a new position, you may want to consider alternative career routes that can offer lucrative and fulfilling roles.

In recent years, the term social entrepreneurship has been used to describe ventures that “generate some of their own revenues and use business techniques to address social goals.” Essentially, such projects are non-profits that apply smart business practices in order to achieve the highest level of social impact.

Drew Chafetz, a University of Colorado graduate, is an example of a young social entrepreneur. Chafetz created his own nonprofit organization called love.futbol at the age of 25. Love.futbol aims to bring soccer fields to impoverished communities where recreational space is scarce. To date, this organization has built three fields in Guatemala.

Projects such as the one established by Chafetz are not trifling affairs. According to the Washington Post, over 30 business schools have established social entrepreneurship programs. Pamela Hartigan, author of “The Power of Unreasonable People: How Social Entrepreneurs Create Markets That Change the World,” believes a certain business sense allows those like Chafetz to achieve more with respect to their social endeavors. “Young people today…believe that change is going to be brought about by business and market discipline,” says Hartigan.

Even those who are typically viewed as stakeholders in the profit-driven business world are singing the merits of social entrepreneurship. Bill Gates, co-founder of Microsoft, is a proponent of nonprofits that practice business strategies. According to Gates, “creative capitalism” can result in increased social impact. If you’re entering the workforce and have an interest in social issues, you may want to consider researching social entrepreneurship. Amidst the current atmosphere of shrinking job opportunities, the social enterprise realm continues to flourish.

Spare Change: The New Retirement Estimator

Social Security's new online Retirement Estimator was named the best online service in government, according to the American Customer Satisfaction Index for Federal Websites. Debuting on the Index with an impressive score of 90, the new retirement estimator was honored with the second highest score received by any government website or online service ever. Check it out today: click here.

Money-Minded Gifts: Finance Books

Holiday gift shopping may be hurting more than your checking account this winter. A new study shows that Christmas shopping increases blood pressure to dangerous levels in 50% of holiday shoppers. When researchers tested men and women after having them buy gifts, women were three times more stressed than they had been before shopping.

It's hard enough to try to find the perfect gift, and braving crowds and cold weather can make shopping feel especially stressful. When you combine these factors with a tighter budget, it's no wonder that shoppers' heart rates increase by 10% while shopping during the holiday season . But if you're feeling financial pressure, chances are the people you're shopping for are experiencing similar money-related stress. So why not channel your shopping anxiety into a helpful, money-minded gift? This week, we're taking a look at finance books. In 2008, 52% of consumers' New Years resolutions were related to getting out of debt. Help your friends and family get a jump start on improving their financial situations by giving them a personal finance book this holiday season.

Get a Financial Life: Personal Finance in Yours 20s and 30s by Beth Kobliner:

This book is a smart choice for any person who is new to managing her finances or who is interested in managing her finances in a more responsible way. Get a Financial Life is exceptionally thorough but never dull or overwhelming. For the most time-strapped readers, Kobliner offers a "Financial Cramming section" at the end of each chapter to summarize the chapter's most important ideas.

The Number: A Completely Different Way to Think About the Rest of Your Life by Lee Eisenberg

The number is a less a retirement guide than a reflection on issues facing the aging population. Eisenberg is a journalist, not a financial planner, but his experience writing on the topic is evident. According to Eisenberg, everyone should be thinking about his or her "Number," which is the amount of money required to meet an individual's expectations for life in retirement.

Smart and Simple Financial Strategies for Busy People

by Jane Bryant Quinn

Jane Bryant Quinn is informative and charming in this book. She covers all the bases, but perhaps the most helpful chapter is "Putting Your Whole Financial Life on Cruise Control"-- the idea being that money saved automatically is less likely to be spent frivolously. Shifting to automatic saving can save you both time and money. Quinn's personal stories of struggling with debt make this both an enjoyable and worthwhile read.

Next Week's Money-Minded Gift: Online Savings Accounts (coming Thursday)

Bags of Stress: Why Christmas Shopping is Bad for Your Health via The Daily Mail Online

2008 New Year's Resolutions Signal Shift in Consumers Priorities via MyGoals.com

Deck the Halls with W2 Forms and Tax Returns: College Aid Season 2009

The conclusion of Thanksgiving last week, as always, was marked by a barrage of holiday themed commercials, signifying via your television set that it officially ‘tis the season to be jolly. If you’re a college student eagerly awaiting the end of Fall classes and the opportunity to sloth it for a whole month, the term “the most wonderful time of the year” never rang truer. However, take care not to lose sight of all of your responsibilities. January 1 marks the beginning of the “college-aid season,” and with it comes the ubiquitous FAFSA (Free Application For Student Aid). If you are looking to receive any type of aid, it is important that you file as soon as possible.

No one wants to spend the first day of the New Year filling out 6 pages worth of financial information. In fact, Congress passed legislation in August that aims to drastically minimize the currently daunting FAFSA form by 4 pages. Unfortunately for current college students, you are going to have to stick it out for one more year as this two-page form will not be offered until 2010.

One of the best ways to make the task tolerable is to be prepared; before January 1, gather all of the documents you will need in order to fill out the FAFSA. These include:

1. Social Security Number,

2. Driver’s License (if you have one),

3. 2007 W-2 Forms,

4. You and Your Spouse’s (if applicable) 2007 Federal Income Tax Return (IRS 1040, 1040A, 1040 EX, Foreign Tax Return or Tax Return for Puerto Rico, Guam, American Samoa, the US Virgin Islands, the Federal States of Micronesia or Palau),

5. Parents’ 2007 Federal Tax Return (if dependent),

6. Current bank statements,

7. Current business and investment mortgage information, business and farm records, stock, bond and other investment records,

9) 2007 Untaxed income record (social security, Temporary Assistance for Needy Families [TANF]. Welfare, veterans benefits records), and

10) Alien registration or permanent resident card (if not a U.S. citizen)

Once you’ve gathered these materials, you can print out a “FAFSA on the Web Worksheet” from fafsa.ed.gov. Filling out this worksheet by hand preliminarily will allow you to simply transfer the information onto the online application when it becomes available. After you fill this worksheet out, you can sign the FAFSA electronically using a PIN (Personal Identification Number) or by mailing in the signature page of the document. Your aid eligibility will be made available immediately once you have submitted your application.

Depending on your Expected Family Contribution (calculated using the Federal Methodology), you may be eligible for Pell grants, student loans and college work-study programs under federal aid. Many schools and states also use the information from the FAFSA to calculate any aid they may award you. Thus, it is crucial that you fill out the form as early as possible. The deadline for filing is June 30th but make sure you check your state deadlines as some are earlier than the federal cut off date.

Getting a head start on the FAFSA process will allow you to avoid any procrastination-induced stress. Visit the FAFSA web site at www.fafsa.ed.gov to find out more information including whether or not you may be able to apply as an independent and other FAQ’s.

Medicare Prescription Drug Plan Open Season

Tis' the season...to apply for Medicare's prescription drug plan. Open season began November 15 and continues through December 31. During open season, new Medicare beneficiaries can join a prescription drug plan, while current beneficiaries should take this time to review the plan they're enrolled in. This is also a prime time to find out if you're eligible for Extra Help. Extra Help is available for beneficiaries with a limited income and provides those who are eligible with financial assistance for monthly premiums, annual deductibles and prescription co-payments. You can apply for Extra Help if:

1)You have Medicare Part A (Hospital Insurance) and/or Medicare Part B (Medical Insurance); and

2)You live in one of the 50 states or the District of Columbia; and

3) Your combined savings, investments, and real estate are not worth more than $23,970, if you are married and living with your spouse, or $11,990 if you are not currently married or not living with your spouse. (DO NOT include the home you live in, vehicles, personal possessions, burial plots or irrevocable burial contracts.) If you have more than those amounts, you may not qualify for the extra help. However, you can still enroll in an approved Medicare prescription drug plan for coverage.

For more information on Medicare prescription drug coverage, including applications for Medicare and Extra Help, visit the Social Security website.

Spare Change: 401(k) News

In this edition of spare change, we (quickly) explore what's happening in the wild world of 401(k)s. Have some spare change of your own? Share your 401(k) headlines in the comments!

• The Employees Benefit Research Institute (EBRI) is offering regular updates of 401(k) balance estimates as the markets change based on information from their database, which is widely recognized as the most comprehensive database on 401(k) plan participants. To find out more, click here.
• Interested in 401(k) fee disclosure regulations? Check out this webinar next week, which features Mass Mutual as well as various financial firms.
  

• This year, 2009, you will have the opportunity to save more for retirement in your tax-sheltered account than you did last year. You and your employer may contribute more to your qualified retirement plan because an increase in the cost of living index triggered an “adjustment” in the limits. The 2009 Plan limits are listed below:

New Plan Limits for 2009
	This year 2009	Last year 2008
457(b) deferral [457(e)(15)]	$16,500	$15,500
401(k) & 403(b) Elective Deferral [402(g)(1)]	$16,500	$15,500
Age 50+ catch-up Contributions	$5,500	$5,000

Savings Tools

Need a little help putting money aside this holiday season? Try one of these handy online tools and create a savings plan that works for you.

CNN Money Savings Calculator: This tool calculates your savings by having you answer a brief series of questions about your taxable accounts, tax-deferred accounts and projected rate of return/time frame. Quick and simple, this calculator offers you an estimate on how much you will save as well as a variety of other retirement savings related tools.

Mint: Mint.com touts itself as "the best free way to manage your money." Wall Street Journal seems to agree with this assessment, calling Mint "a pleasure to use." Mint offers you tools to help save for retirement, pay off your debt, and save for long term goals. By entering your information, this personal finance software automatically downloads and categorizes your credit card transactions nightly to help you identify your spending trends.

Choose To Save calculators: EBRI's Choose to Save campaign has a page chock full of calculators to help you save, as well as tools to assist you with your employee benefits, insurance, Roth IRAs and more. They also recommend their favorite savings calculators from other sites such as Motley Fool and FINRA.

Budgeting in a Spending Season

Thanksgiving is over and the giving season has just begun. Today's unofficial holiday, Black Friday, kicks off the holiday shopping season with a wide variety of retailers offering huge savings on high ticket items. Unlike the tamer Thanksgiving week traditions, such as the Macys Thanksgiving day parade or the traditional Thanksgiving feast, Black Friday is marked by epic lines at local stores and chaotic masses of shoppers, many of whom are willing to wake up before dawn for doorbuster deals and prime access to the soon to be out-of-stock sale items.

It's hard to remember anything when you're rolling out of bed at 5am, still drowsy from last night's turkey paired with a lack of shut-eye. But it's especially hard to remember your budget. Maybe that budget amnesia accounts for these poll results: according to the Washington Post, half of the respondents to a poll early last year said they would carry their holiday credit card debt into spring. And this was before the current economic slump. So how do you stop yourself from overspending this holiday season? Why not give yourself a few gifts before you start shopping for everyone else:

Gift 1: A Budget
I know, it's scary. When there are people to shop for, holidays parties to attend, even holiday parties to throw, you may not want to have your financial reality mapped out in front of you when you could have a piece of pie and a healthy slice of ignorance instead. But soon enough it will be January, the month of New Years resolutions and no more holiday splurge excuses. So why not get a head start and make a budget now? Include holiday gifts and get a better idea of how much you can spend this holiday season. You can use WISER's budget worksheet to get you started. For help on keeping track of your spending, check out WISER's "Keep Track of Your Spending" Fact Sheet.

Gift 2: A Low-Interest Credit Card
Look for low-rate and no annual fee credit cards. You can get a list of credit cards, interest rates and fees: send $5 to RAM Research’s CardTrak, P.O. Box 1916, Frederick, MD 21702, or for free on the Internet at http://www.ramresearch.com/. See also the http://www.cardtrack.com/ website .

Gift 3:A Free Credit Report
Get a better idea of your credit situation, for free! As of September 2005, all US Citizens are eligible for one free credit report from each credit agency per year. To receive your free annual credit report visit www.annualcreditreport.com or call 1-877-322-8228. This can help you improve your credit and set some long term financial goals.

Gift Trapped? [Washington Post]
Tips for Reining in Holiday Giving [Washington Post]

Happy Thanksgiving from WISER!

Looking for a gift idea you can feel good about? Well look no further than I Savings Bonds. One thing to be thankful for today is the new and improved interest rate on I Savings Bonds. While I Savings Bonds were earning 4.28% this time last year, the interest rate has increased to a whopping 5.64% through April 30, 2009. I Savings Bonds are government-issued bonds that earn interest each month, and the interest is compounded every six months. The I Bond is currently providing a higher return than the EE Bond. Since becoming available, the I Bond has been very popular; sales of over $3.2 billion were reported in the first year.

Here are a few things you should know about the I Bond:

• You can buy I Bonds at face value; for example, you would pay $50 for a $50 bond.
• Earnings are exempt from state and local income taxes
• Federal income taxes can be deferred for up to 30 years, or until you cash them in, whichever comes first.
• You can earn interest on them for up to 30 years and can cash them out after 5 years without losing interest (You will lose three months' interest if you cash them in sooner.)
• You can now buy savings bonds with automatic deductions from your checking or savings account on a regular basis through the Easy Saver plan, or on the Internet.
  

I Bonds are a great gift for kids! You can show them how to calculate the value of their savings bonds every year. For more information on I Bonds, go to www.savingsbonds.gov or call 800-487-2663.

The "Sandwich" Dilemma: Caregiving Concerns Facing Female Baby Boomers

Thanksgiving has nearly arrived, bringing with it a much needed, calorie-laden respite for all. As you, your friends and your family count the things you can be thankful for (e.g. the thriving economy…), do not forget to include America’s caregivers. After all, November marked National Family Caregivers’ month, a celebration of the 34 million caregivers who provide $375 billion in unpaid help to friends and family.

According to Kelly Greene of the Wall Street Journal, the typical caregiver in the United States is a “46-year-old woman who works outside the home and spends more than 20 hours a week providing unpaid care to her mother.” Not only are these women not paid for the care they administer, but they also face “opportunity costs” such as lost wages and subsequent loss of employer-sponsored health insurance and retirement benefits. Some even pay out of pocket during the course of their caregiving; in 2007, caregivers spent an average of $5,531 of their own money when caring for those over the age of 50.

The current group of caregiving women is mainly baby boomer women born between ages 45 and 59, according to Tom Riekse, Jr., a managing principal at a brokerage general agency. This demographic often finds itself caring for their parents and their children. This “sandwich effect” has begun to cause women to start thinking about how to prepare themselves for the time when they may require long-term care.

There are many avenues to consider when thinking about financing one’s future circumstances. Medicare and Medicaid are examples of public resources that are in place to assist those requiring long-term care. Visiting www.longtermcare.gov, a website created by the Department of Health and Human Services, will provide you with information on financing care publicly. While these government options can prove invaluable, Rieske recommends that his clients also research private long-term care insurance…..and the sooner, the better.

There are a number of reasons why purchasing long term care coverage in advance can be a smart decision. For one, long-term care insurance is medically unwritten. As such, healthier clients obtain better rates. According to Rieske, while those ages 40 to 49 qualify for “good health discounts” 63.2% of the time, only 51.5% of those ages 50 to 59 qualify. Also in respect to age, the premiums and benefits change depending on how old you are. In this way, the premiums you pay over a longer period of time may can end up being less than what you will be paying if you choose to purchase an insurance plan later on.

There are many routes to consider when thinking ahead about long-term care. Whatever path you choose, it is important to seek out all available information on both public and private options. You may want to consider consulting with a financial advisor, especially if you choose to purchase long-term care insurance and are unsure which plan is right for you. Visit the WISER website and click the “Caregiving” where you can find more information.

Want to Work for WISER?

WISER is hiring an intern for the Spring 2009 Semester. We're looking for an excellent writer with research skills and an interest in retirement and financial planning. This is a paid internship that will give you the opportunity to participate in conferences, meetings on the Hill, DC events as well as write for WISER's newsletter, collection of Fact Sheets and this blog! To apply, send your resume, cover letter and writing sample to info@wiserwomen.org

Financial Planners vs. Psychics

Looking for a new career? Facing pay cuts or, worse, pink slips? Wondering where the money is these days? Well it may be time to polish that crystal ball and peer into a new profession. As a vast number of industries experience the sharp blow of our weakened economy, one industry appears to be thriving: the divination arts. That's right: in a time of dwindling business, psychics are enjoying a lucrative wave of popularity.

While previous visits to the psychic may have involved questions about a spouse's fidelity or on the future of your love life, psychics are noticing an increase in economy-related shop talk, along with a significant increase in business. According to Ryan Singel at WIRED magazine, "internet psychics across the board saw a spike in traffic in the days following the initial market crash." Psychics are now fielding questions that may have previously been directed at a financial planner or job counselor: What should I do with my money? How do I avoid getting laid off? Ruth la Ferla at the New York Times says "These days, [psychics] are besieged with questions about whether a pink slip is in the cards, whether a condo will sell, or whether a company will continue to prosper."

If you're interested in receiving assistance on money matters, but don't want your advice to come from a pack of tarot cards, consider hiring a financial planner. Here are the top 3 questions to ask a financial planner, from the Certified Financial Planner Board of Standards:

1. What Experience Do You Have?
Find out how long the planner has been in practice and the number and types of companies with which she has been associated. Ask the planner to briefly describe her work experience and how it relates to her current practice. Choose a financial planner who has experience counseling individuals on their financial needs.

2. What are Your Qualifications?
The term "financial planner" is used by many financial professionals. Ask the planner what qualifies her to offer financial planning advice and whether she is recognized as a CERTIFIED FINANCIAL PLANNER™ professional or CFPR practitioner, a Certified Public Accountant-Personal Financial Specialist (CPA-PFS), or a Chartered Financial Consultant (ChFC). Look for a planner who has proven experience in financial planning topics such as insurance, tax planning, investments, estate planning or retirement planning. Determine what steps the planner takes to stay current with changes and developments in the financial planning field. If the planner holds a financial planning designation or certification, check on her background with CFP Board or other relevant professional organizations.

3. What Services Do You Offer?
The services a financial planner offers depend on a number of factors including credentials, licenses and areas of expertise. Generally, financial planners cannot sell insurance or securities products such as mutual funds or stocks without the proper licenses, or give investment advice unless registered with state or Federal authorities. Some planners offer financial planning advice on a range of topics but do not sell financial products. Others may provide advice only in specific areas such as estate planning or on tax matters.

Check out the rest of the CFP's "10 Questions to Ask When Choosing a Financial Planner" list here.

"In Troubling Economic Times, Consumers Flock to Online Psychics" [WIRED]
"Love, Jobs and 401(k)s" [The New York Times]

Laid Off: How to Stay Insured

The holiday season is upon us. With Thanksgiving around the corner and the winter holidays just weeks away, many American workers are receiving an unexpected (and unwanted) gift from their employers: pink slips. According to the Wall Street Journal, 1.2 million workers have been laid off this year. Lay-offs are occurring across the board and impacting a wide range of industries. Tinseltown legends Harvey and Bob Weinstein laid off 11% of their employees at Weinstein Co. on Friday, while publishing powerhouse Conde Nast has begun cutting their staffs by 5%, a move that bloggers have begun referring to as "Empty Nast syndrome." The unstable economy is causing stress for many workers, who wonder if their jobs may be the next to go. "I put all this time and effort into my education," says New York based graphic designer Ashley Jones. "Now I'm hoping it wasn't all in vain." But as major magazines fold daily, Jones says "I'm feeling uncertain about my future and I just hope I can support myself."

Every Thanksgiving, at tables across America, families lift their glasses and wish for good health for themselves and their loved ones. But how do you take care of your health if losing your job also means losing your health insurance? For the newly-unemployed, the animal of the season may no longer be the turkey: it may be time to embrace the COBRA. COBRA stands for the Consolidated Omnibus Budget Reconciliation Act, a law that provides continued group healthcare coverage for uninsured former employees. COBRA allows you to keep the insurance plan you used at your former place of employment for an additional cost, though this cost is usually less than the cost of opening an individual insurance policy. On the other hand, there are affordable individual insurance policies as well as government programs for those who qualify. Explore your options and make sure you and your loved ones remain insured during this holiday season.

• "Newly Out of a Job? Here's how to replace the health benefits" by Anna Wilde Mathews at the Wall Street Journal: Mathews offers information and tips on using COBRA coverage, finding an individual insurance plan, and qualifying for government coverage.
  
• The Healthier and WISER series: The "Healthier and Wiser" series addressed some of the main health care coverage issues women encounter at different stages of their lives. It offers a variety of resources and information on how to stay insured.
  
• FAQs About COBRA: This FAQ from the U.S. Department of Labor offers extensive information on COBRA coverage.

Job Security and Young Professionals: Staying Smart During an Economic Downturn

Millenials, persons born between those of Generation X and those of Generation Y, are starting to trickle out of the university arena and into the workforce. Unfortunately for this demographic, which amounts to about 76 million adults, today’s work force is currently bearing the brunt of an economic crisis. According to a survey by Accenture Limited, 46% of U.S. middle managers said that, because of the current state of the economy, “switching employers in the current environment is risky.” Figures such as these have begun to reach the ears of millenials, causing many of them to become reluctant to change job positions.

According to David Smith, the managing director of talent and organization performance at Accenture, a global consulting company, “It’s unclear whether a different employer will be able to provide sufficient job security, training, advancement opportunities, and other benefits” given the current economic climate. Young professionals who know that lay-offs often abide by a “last in, first out” policy and have become less inclined to seek new positions.

If you are a young professional considering joining a new company or firm, there are a number of ways in which you can guard yourself against less than lucrative job opportunities. Following the steps below may help you face career transitions proactively.

1. Ask questions. When you receive a job offer from a prospective employer, make sure that you employ the interrogation method. Some examples of questions that you may want to consider asking include: 1) How is your company’s turnover rate?, and 2) What criteria do you use when making layoffs?

2. Do research. While you may ask questions of your prospective employer, there is some information that may be omitted via direct questioning. As such, you may benefit from researching articles on the Web or in newspapers that may shed light on the company’s financial history. Public companies are required to make their 10-L filings, documents that offer figures on the performance of a company, publicly available. These filings can be found with the Securities and Exchange Commission.

3. Start saving. Because of the precarious state of the economy and the workforce, it is imperative that you start safeguarding your finances as soon as possible. In the event that you find your job transition is not running as smoothly as you wished, it helps to have some money saved up that you can rely on. For tips on saving and investing, browse through WISER's "Saving & Money Management Basics" fact sheets.

Professional millenials, in the infancy of their careers, should carefully weigh the pros and cons of job transitions during the current economic crisis. If you do decide to accept a position with a new employer, adhering to the steps above may help you make the smartest maneuver possible.

National Caregivers Month: Helpful Hints

In the past month, Metlife Mature Market Institute, in collaboration with the National Alliance on Caregiving, has released six "Helpful Hints" publications, aimed at providing useful information to caregivers. These brief bulletins offer tips on common issues for caregivers, ranging from how to select an assisted living facility to how to advocate for a loved one in a healthcare situation.

Helpful Hints: Choosing an Assisted Living Facility: As a caregiver, you may be interested in exploring assisted living facilities as an option for your loved one instead of using in-home care. Assisted living facilities can provide your loved one with 24 hour medical care and a wide variety of social activities. Metlife offers 8 key considerations to take into account when you are selecting an assisted living facility as well as a variety of outside resources to help you with your decision.

Helpful Hints: If Care is Needed at Home: Paid care is another option for family caregivers who want to supplement the in-home care they are providing and offer their loved one the option of remaining in his or her home. This bulletin has advice on how to select an in-home caregiver as well as ways to monitor care and intervene if a problem arises.

Helpful Hints: Caregiving from a Distance: As a caregiver, you may not always be able to provide care directly in the home, or even directly in the same state as your loved one. That's why Metlife and NAC have come up with these tips and resources for caregivers who provide care from a distance. Their list of eight key considerations includes advice on how to develop an emergency response system, a list of important documents you may need, and several resources to help you develop a care plan.

Helpful Hints: Caregiving and Alzheimers Disease: Alzheimers introduces a host of new challenges for caregivers. This publication highlights ways you can improve your communication as a caregiver if you are providing care for a loved one with alzheimers. Tips include ways to communicate with your loved one as well as ways to improve communication with the other members of your caregiving team.

Helpful Hints: Advocating for a Family Member in a Healthcare Situation: Acting as an advocate for your loved one during healthcare situations can be a particularly frustrating, but profoundly important, component of being a caregiver. Metlife offers 10 tips for caregivers to help them become more effective and communicative advocates for their loved ones.

Helpful Hints: Choosing an Adult Day Center: You may want a long term care plan for your loved one that offers a middle ground between in home care and assisted living. One alternative is an adult day center. Adult day centers can provide your loved one with social stimulation as well as healthcare services while offering you daily time away from your caregiving responsibilities. This publication offers information on the different varieties of adult day centers as well as advice on how to choose one that will work best for you and your loved one.

"Safety School" Takes on a Whole New Meaning During Economic Downturn

Applying to college, albeit stressful, is often an exhilarating time in a young person’s life. Once you’ve successfully maneuvered the grueling process of gathering letters of recommendation and writing seemingly endless amounts of essays, the possibilities college can offer emerge from the shroud of paperwork. Postsecondary eagerness is piqued by the thought of new people, new places and the idea of finally acquiring that oh-so-coveted notion of independence. You may also find the frequency of your mailbox trips increasing by the day.

College applicants are often especially anxious to find out whether or not they have been granted admission to their “dream schools.” The possibility of rejection from such schools necessitates the need for the “safety school,” a college (or two) which will be there for you if (knock on wood!) you do not make it into one of your top choices.

Amidst rising costs of tuition and the current financial concerns facing Americans, the generic “safety school” for many young adults has become one based on financial practicality rather than mere preference. According to Shelly Banjo of the Wall Street Journal, “While many parents and students have long emphasized getting into a top school over financial considerations, families in recent months have seen the value of their homes decline, their investments dramatically shrink and sometimes monthly income lost due to layoffs.”

In order to ease the burden of the cost of college, many families have begun to encourage their high school seniors to apply to less costly universities. Students whose families have been adversely effected by the financial crisis have also begun to think about attending colleges that are close to home to save on housing and transportation costs. Some have even broached the topic of attending a community college for the first half of their college career.

The above claims are not mere media hearsay; according to MeritAid.com, a scholarship website, a survey of 2,500 high school seniors found that “57% of prospective college students say they are ‘now considering a less prestigious college due to affordability.’” The survey also found that 16% of these students are even “now putting their college searches on hold because they don’t think their families will be able to pay for college.”

While many families will inevitably endure the financial crunch of an economic downturn, college hopefuls should not consider the possibility of attending their dream university a lost cause. According to Banjo, “While the sticker price might be high, a favorable aid package could make some private colleges cost-competitive with a public institution.” At Dartmouth, students of families who earn less than $75,000 are not charged tuition.

It is always disappointing to feel as if the door of your dream college has been slammed shut before you’ve even applied because of financial considerations beyond your control. However, being both knowledgeable and aggressive in respect to financial aid and scholarship opportunities can bring to light various possibilities. Filing the FAFSA will determine if you qualify for federal aid and is also used by some colleges to determine your award package. The FAFSA is available at fafsa.ed.gov and is to be filed no earlier than January 1 of the year you will be attending. It is important to remember to file every year.

The CSS Profile Application is another resource utilized by colleges to determine need, as it "gives financial aid administrators a broader set of data from which to derive your eligibility for institutional need-based assistance." The CSS Profile Application is available at collegeboard.org. For more information on applying for aid (including the process by which the Department of Education determines your need, scholarship search services and other options such as work-study programs, visit the Financial Aid Resource Center at http://www.theoldschool.org/

Quick Quiz: Your Money Market IQ

Before the recent credit crisis, money market funds seemed about as interesting as that guy your Aunt Judy has been trying to set you up with. You know the type: dull, safe, easy to ignore. But suddenly the money market fund is a hot topic as these previously safe investment have been swept up in the recent economic chaos. This morning's Wall Street Journal points out that you can't take these funds for granted anymore (but feel free to keep ignoring that guy), and has a handy quiz full of facts and tips to help you get savvy about money market accounts.


From How Well Do You Know...Money-Market Funds?
by Leslie Scism
http://online.wsj.com/article/SB122529246328680389.html?mod=yahoo_hs&ru=yahoo

1) When were the first money-market mutual funds for small investors launched?

A. 1950s
B. 1960s
C. 1970s

ANSWER: C. The funds "were born of a Black Swan moment -- the explosive inflation of the 1970s," when investors were craving higher rates than were then possible in bank accounts, says Paul Schott Stevens, president of trade group Investment Company Institute.

By most accounts, the first fund was offered by Reserve Management Co. -- the New York firm whose fund in September broke the buck.

2) Fidelity Investments was one of the first big mutual-fund firms to launch a money-market fund. What perk came with its new fund?

A. A matching contribution of up to $100
B. Check-writing privileges
C. A toaster

ANSWER: B. Because few investors were buying stocks in the bear market of the 1970s, Fidelity searched for another way to bring in business. In 1974 it introduced Fidelity Daily Income Trust, and to distinguish it from other money-market funds, the president of the firm, Ned Johnson, added check writing.

"He reasoned that if it was easy for investors to get money out, they'd be more likely to put money in," a Fidelity history brochure reads. "The idea worked, and assets poured into the fund."

3) Fidelity says the launch of Fidelity Daily Income Trust led directly to another key innovation at the Boston firm. Which is it?

A. A toll-free telephone line through which individuals could make fund purchases directly
B. A computerized telephone system to provide yield quotes 24 hours a day
C. A discount brokerage service to sell funds as well as stocks, allowing small investors to bypass pricey Wall Street brokers

ANSWER: A. At the time, Fidelity sold its funds through brokers. But Fidelity couldn't pay brokers to sell the money fund without losing its yield advantage, the history reads. So Fidelity set up a dedicated phone line and ran a few ads. The move proved popular, and by 1979 Fidelity removed the 8% sales charge from almost all its funds to sell directly to the public. Later came the firm's computerized phone system and discount brokerage.

4) Before the Reserve fund's problems, there was just one prior occasion when a fund broke the buck. When was that?

A. 1974
B. 1987
C. 1994
D. 1998

ANSWER: C, when tiny Community Bankers U.S. Government Money Market Fund incurred losses in financial "derivatives." There have been many other close calls over the years, but fund companies have stepped in on all those other occasions to bail out their funds. That is, the fund company either bought out the debt at par value or took other steps to back up the fund so that the shares stayed at $1. The Community Bankers fund was aimed at institutions, and no small investors lost money in it.

5) Which of the following was true of money funds as of this past June?

A. They held almost one-fifth of municipal securities outstanding.
B. They held one-fifth of marketable Treasury bills.
C. They held more than 40% of the outstanding short-term borrowings of U.S. corporations known as commercial paper.
D. All of the above.

ANSWER: D, according to the ICI. Assets in money funds quadrupled from 1984 to 1987, when they reached $1 trillion, and they tripled again, to $3 trillion, by 2007.

Securities and Exchange Commission rules, known as the quality, maturity and diversity standards, govern what money-market mutual funds can hold. What this translates to, in general, is a very wide range of highly rated securities that mature in 90 days or less.

6) What investment got the Reserve fund in trouble?

A. Russian debt
B. Lehman Brothers debt
C. Fannie Mae preferred stock
D. CDs from failed IndyMac Bancorp

ANSWER: B. The Reserve fund, which stood at $65 billion in early September, held $785 million of Lehman debt when the investment bank filed for bankruptcy on Sept. 15. The fund said it would write the debt down to zero, reducing the fund's net asset value to 97 cents a share.

7) True or false: The Reserve is the only money-market fund that has had large-scale soured investments since the subprime-mortgage crisis erupted in 2007.

ANSWER: False. At least 20 fund companies have stepped in this year to support their money funds or to prevent them from breaking the buck, according to Peter Crane, president of Crane Data, which tracks money-market activity. They bought out the money-losing debt at face value, or took other steps to make the fund whole.

Fund firms do this to prevent devastating runs. "It's like fixing your roof," he says. "You either fix your roof or the whole house ultimately will be destroyed." Fund operators repairing the roof, so to speak, include Bank of America Corp., Northern Trust Corp. and Wells Fargo & Co. And this leads to some advice from fund analysts: Invest where there is a well-capitalized company committed to the fund business.

8) True or false: The U.S. Treasury's new money-market guaranty program has caps on the amount covered identical to those at bank accounts covered by the Federal Deposit Insurance Corp.

ANSWER: False. The program, in place for three months with the possibility of extension, covers whatever sum investors had in their money-market mutual funds as of Sept. 19. FDIC coverage for consumers' bank deposits, by contrast, was recently raised to $250,000 from $100,000.

Officials at first weren't going to put any limits on the money-market guarantee, but community bankers complained that the change would fuel a flight of money out of their vaults into higher-yielding funds. So the Treasury on Sept. 21 clarified that the program applied to amounts in accounts as of Sept. 19, the date the program was announced.

9) What was the average 12-month yield as of Sept. 30 of a consumer-oriented, taxable money-market mutual fund?

A. 1.65%
B. 2.65%
C. 3.65%
D. 4.65%

ANSWER: B, according to Money Fund Report. And beware: Yield-chasing can get you into trouble. The Reserve Primary Fund's 12-month yield as of Aug. 31 was 4.04%, the highest of more than 2,100 money-market funds tracked by Morningstar Inc. The average at the time: 2.75%. A fund yielding more than others may be charting a risky course to deliver the extra income.

10) What is the average annual expense ratio of a money-market fund?

A. 0.08%
B. 0.28%
C. 0.58%
D. 0.98%

ANSWER: C, according to Morningstar. While the average of all money-market funds is 0.58% of assets, the average for the 25 largest is 0.24%. Take note: The funds with the lowest costs have the least need to take on risk to deliver a competitive yield.

It's Official: November Proclaimed National Family Caregivers Month

The White House just released a proclamation from President Bush that officially recognizes November as National Family Caregivers Month! You can read the proclamation below or check it out here:

For Immediate Release
Office of the Press Secretary
October 29, 2008

National Family Caregivers Month, 2008
A Proclamation by the President of the United States of America

During National Family Caregivers Month we recognize and celebrate the many individuals throughout our country who work each day to ensure a better quality of life for their family members. Through their selfless action, these caregivers provide their loved ones support and comfort as they age, combat illness, or suffer from disability.

Our Nation is compassionate, and we believe in the sanctity of life at all stages. Through tireless efforts and inspiring deeds, many Americans care for loved ones in need. By acting as in-home care providers, people across our Nation are helping to ensure that their family members are provided with love, comfort, and security. My Administration has worked to offer caregivers support and training. In 2006, I signed the Lifespan Respite Care Act of 2006, which established a program to help family caregivers get access to affordable and high-quality respite care. In addition, the National Family Caregiver Support Program encourages cooperation among government agencies and other organizations that support and work with family caregivers.

National Family Caregivers Month is an opportunity to recognize those who serve a cause greater than self and contribute to the well-being of their loved ones. Family caregivers are soldiers in America's armies of compassion and set an inspiring example for their fellow citizens.

NOW, THEREFORE, I, GEORGE W. BUSH, President of the United States of America, by virtue of the authority vested in me by the Constitution and laws of the United States, do hereby proclaim November 2008 as National Family Caregivers Month. I encourage all Americans to honor the selfless service of caregivers who support their loved ones in need.

IN WITNESS WHEREOF, I have hereunto set my hand this twenty-ninth day of October, in the year of our Lord two thousand eight, and of the Independence of the United States of America the two hundred and thirty-third.

GEORGE W. BUSH

Trick or Treat: Financial Scams

Happy (almost) Halloween! Scam artists know how to manipulate language or offer "perks" to lure even the wisest saver into their financial scams. So how do you know if what their offering is a trick or a treat? Compare what they're saying to the list of phrases in our "Too Good to be True" Checklist!

“Too Good to be True” Checklist:

Phrases and Promises that Probably Mean “It’s Too Good to Be True”

Here’s a check list of phrases that scam artists use and offers they make. Next time you hear one of these you can just say, “Sorry, I know it’s too good to be true.”

• “We’ll give you a free lunch and teach you how to invest your money.”

Don’t let a free lunch and some well-dressed, well-spoken sales persons pressure you. Don’t purchase financial products that you don’t understand or need.

• “I’m a ‘Senior Certified Financial Planner’ and I have some wonderful investment products for a person just your age.”

Watch out for people using educational titles to convince you imply that they have been “certified” as experts in financial matters affecting seniors. There is no such designation.

• “You’ve just won $10,000. If you give me your bank account number, we can put in right in the bank for you.” Never give out any account numbers to anyone over the phone or to anyone you don’t know.

• “We can erase your bad credit score.” You can take steps to pay down your debt and get your finances back under control, but it will not be easy and it won’t be accomplished in a day. So, don’t pay someone who says that it can. They are probably trying to sell you a high interest loan.

• “The IRS has made an error in your taxes and will refund the money if you fill in your Social Security number on the attached form.” This request may come in an official-looking envelope, but think about it, obviously the IRS already knows your Social Security number. Don’t fall for this one.

Be Suspicious of Urgent Demands:

• “You must decide right now.”

• “Just sign here.”

• “All you have to do is give me your credit card number to confirm.”

• “Give me your Social Security number and we will correct the error.”

• “You will regret it if you don’t accept this offer right now.”

• “Give me the cash up front.”

Annuities and Risk: An Annuities Q & A

In the current economic climate, we're all concerned about our retirement security and our investments, such as annuities. Brokers and agents say they're receiving a flood of calls about the security of annuities, and that many customers are considering cashing out their variable annuities. This drastic action can be unnecessarily costly: you may have to pay surrender charges as high as 10%, and if you're younger than 59 and a half, you will be responsible for various tax liabilities and penalties. This morning's Wall Street Journal offered the following
Q &A on annuities in the article "Are Annuities at Risk Now? Some Answers:"

Are Annuities at Risk Now? Some Answers
Tuesday October 28, 11:08 pm ET
By M.P. McQueen

Q: How do annuities work?

A: Annuities are tax-deferred insurance contracts bought once, or with a series of payments, that offer the owners either a lump sum or a series of payouts after an accumulation period. Unlike other retirement vehicles such as an individual retirement account or a 401(k), annuities have no legal limits on tax-deferred contributions.

Q: What's the difference between fixed and variable annuities?

A: Fixed annuities earn a guaranteed interest rate during a certain period. They are backed by assets in an insurance company's general account, usually bonds. Fixed annuities depend entirely on the financial soundness of insurers, which are regulated primarily by state insurance departments.

Variable annuities can also come with guaranteed benefits, such as a death benefit and a minimum return, riders for which the buyers generally pay extra. In other ways, though, they're quite different: A portion of deposits go to the insurance company to cover administrative costs and guaranteed benefits; the rest is invested in a portfolio of mutual fund-like investments. These accounts are separate from the rest of the insurance contract and belong to the annuity owner, so they're not as vulnerable to the insurer's fate.

Variable annuities, however, are more exposed to market risks. If annuity owners' investments perform well, there's the potential upside of a bigger payout. But if they do poorly, as many have recently, income falls, too. Investors can shift their fund holdings, however, to lower-volatility choices such as bond funds.

Q: How have annuities been affected by recent market conditions?

A: Many variable annuities have gone through the same gut-churning volatility as mutual funds in general. Partly as a result, while sales fixed annuities rose 39% in the first six months of 2008 from a year earlier, sales of variable annuities overall declined 6% in the same period, according to LIMRA International.

Q: Should I be worried if the share price of my insurer declines?

A: Not necessarily. In some cases, analysts say, publicly traded insurance companies' stock prices have plunged partly because of their efforts to raise capital. And while raising capital can dilute existing shares, it also improves an insurer's ability to pay claims. Hence, a decline in the stock value of a company doesn't always spell immediate trouble for annuities or life-insurance policies.

Q: Should I worry if the financial-strength rating of my insurer declines?

A: Possibly. Financial-strength ratings, supplied by rating agencies, are an evaluation of the ability of a company to make good on its guarantees. A slip from an excellent financial-strength rating from one of the five agencies -- Fitch Inc., A.M. Best Co., Moody's Investors Service, Standard & Poor's or TheStreet.com -- to a slightly lower rating that is still in the secure range isn't cause for alarm, experts say. But multiple downgrades are a good reason to keep an eye on the company.

Through Sept. 30, 6.5% of the life/annuity and health-insurance companies followed by rating agency A.M. Best had been downgraded, though most remained in the "secure" range, meaning they are still regarded as financially sound.

Of course, buyers of new annuities should only buy from top-rated companies, consumer advocates say. You can find information on financial strength of companies licensed in your state by linking to your state's insurance department, at www.naic.org, the Web site of the National Association of Insurance Commissioners.

Q: What happens when a company founders?

A: State regulators usually monitor struggling companies and work with them to try to get additional capital -- or to sell the company to a stronger insurer that can make good on all of its claims. State receivers, who include the state insurance commissioner of the company's home state, often help find other insurers to take over the annuities from the troubled company. Annuity owners then make payments to the new company and collect payouts from it. Otherwise the terms of the annuity usually remain the same.

Q: What happens if no insurer wants to take over the annuity contracts of a failed insurer?

A: If an insurer is declared insolvent by a court and is liquidated, state laws require companies to pay annuity (and insurance policy) owners first and in full before paying claims of other creditors. State guaranty associations -- funded by other insurers -- then make good on the annuities and policies. Death benefits, for instance, are often protected up to $300,000. Cash values are often protected to a maximum of $100,000. (See www.nolhga.com, the National Organization of Life and Health Insurance Guaranty Associations, for state-by-state terms.)

With variable annuities, as with fixed contracts, the associations protect the death benefits, guaranteed minimums, and other contract guarantees. But investment account losses because of market declines generally aren't covered.

Q: What are my options if my insurer is at risk of insolvency?

A: Regulators and consumer groups warn that annuity owners, especially those who bought contracts recently, often stand to lose more when rashly surrendering an annuity than they would risk from the insurance company's failure. That's because the guaranty funds protect their money up to legal limits, while surrender charges and other penalties can take a chunk of an annuity's balance.

For more information on annuities, visit the WISER website and check out our section on annuities, featuring a variety of articles and reports on annuities.

Class of 2009 Woes: Applying For Jobs During an Economic Slump

The class of 2009 is nearly halfway finished with their last year at college and seniors everywhere are beginning to consider their plans for the future (if not battling the debilitating condition that is senioritis). Some students have already begun their job searches with unadulterated excitement; others have tried to force the idea of real jobs and real responsibilities out of their minds. Whether you are one of the ambitious or one of the fearful, one thing is for certain: job prospects are not as favorable as they used to be.

According to a survey by the National Association of Colleges and Employers, employers plan to hire 1.3% more graduates next year than in 2008. Two months ago, the same survey projected a 6.1% increase in hiring. According to Cari Tuna of the Wall Street Journal, this sharp decrease in projections is “in response to the slowing economy and financial-sector turmoil.” With such financial firms as Lehman Brothers Holdings, Inc. in bankruptcy protection, beefing up employment will most likely take a back seat to more pressing concerns.

A sharp diminishment in employee hiring is not the only obstacle facing the class of 2009. According to the National Center for Education Statistics, 1, 585,000 students will receive bachelor’s degrees this year, up 41,000 from 2008, inevitably raising the stakes in terms of job competition. Salary projections also appear dismal, as career counselors predict that salaries for entry-level positions will either “hold level or decline” in 2009.

All of these inauspicious projections for the class of 2009 are further complicated by the characteristics of what Ron Alsop, author of “The Trophy Kids Grow Up: How the Millenial Generation is Shaking up the Workplace,” refers to as the “millennial generation.” According to Alsop, those born between 1980 and 2001 “were coddled by their parents and nurtured with a strong sense of entitlement.” Many employers worry that this generation’s outlook will lead to “high-maintenance rookies” in the workplace.

According to a survey by CareerBuilder.com, more than 85% of hiring managers and human-resource executives believe that “millenials have a stronger sense of entitlement than older workers.” While these postulations may seem offensive to an individual in the millennial demographic, experts generally agree that these characteristics were bred by doting parents. Natalie Griffith, manager of human-resource programs at Eaton Corporation, says “It’s not necessarily arrogance; it’s simply their mindset.”

If you are one of the “millenials” of the class of 2009, don’t become too discouraged by these generational perceptions. After all, according to Alsop, “the grumbling baby-boomer managers are the same indulgent parents who produced the millennial generation.” In respect to the economic slump and decreased career prospects, there is some good news: while finance, retail, construction and manufacturing fields are experiencing lower rates of hiring, other areas such as public service, health care, education, technology and accounting have maintained their demand for new employees.

Social Security: What's New?

As the seasons change, Social Security is undergoing a few changes as well. These past two weeks have featured two exciting changes in Social Security, including an increased COLA and today's announcement of the new Compassionate Allowances Initiative:

• Last week, Social Security announced that Social Security and Supplemental Security Income beneficiaries will receive a 5.8 percent benefit increase in 2009. The 5.8 percent increase is the largest since 1982. The 5.8 percent Cost-of-Living Adjustment (COLA) will begin with benefits that over 50 million Social Security beneficiaries receive in January 2009. These benefits are based on a raise in the Bureau of Labor Statistics' Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which increased 5.8 percent this year. To understand how the COLA will impact your benefits, check out this Fact Sheet from Social Security.

• Today, Social Security announced the national roll-out of its Compassionate Allowances initiative. This initiative will make it faster and easier for disability applications to be processed for people with specific cancers and rare diseases. The 50 conditions that apply are listed here, and Social Security will continue to add more conditions to this list. According to Commissioner Astrue, "The launch of Compassionate Allowances is another step to ensuring Americans with disabilities, especially those with certain cancers and rare diseases, get the benefits they need quickly."
  

Young Women and Savings: Save Early, Finish Strong

As a young woman, it's easy not to save for retirement. Student loan payments, rent, and that pesky college credit card debt all have to be paid off monthly, while retirement seems like something that is light years away. "Sure," you think, "I'll save for it, once the loans are paid off, next month's rent is taken care of, oh and after that vacation next summer..."

There will always be other expenses that seem more urgent than saving for retirement. In the next few years, you may finish paying off those loans, but replace them with graduate school tuition or a mortgage, and it will still feel easier to put off saving for another time. When it comes to retirement savings, the earlier you start, the more impact your savings will have on your future retirement security. If you put aside $500.00 a year from age 22-30 you'll save $4,500 dollars. Okay, so that doesn't seem like enough to retire on--but wait! If you put that money in a tax-deferred retirement plan at an average rate of return of 6%, you'll come out with $63, 918 dollars.

The point is, you don't have to save a ton at this point in your life, but it is important to make sure that you're saving. Here are a few tips for young workers to get you started from the National Save for Retirement week website:

• Start now: Most people join the workforce soon after they graduate from high school or college, but research shows that many neglect to save for retirement. According to a survey conducted by the Employee Benefit Research Institute, 41 percent of workers between the ages of 45 and 54, have less than $25,000 in total savings and investments.Thirty-nine percent of workers aged 55 and older also total savings of less than $25,000.
  

• It all adds up. Skip one trip to the corner deli each week or forgo that $5 bucket of popcorn at the movies. It’s a simple way to free up a little extra money every week. Even $5 to $10 a week makes a big difference, if you start now. Starting early could give you 20-30 years of opportunity for investment earning, which can really add up over time.
  

• Pay yourself first. Be sure to take advantage of your employer-sponsored retirement plans. One advantage of saving through your employer-sponsored retirement plan, is that the money goes to savings before you have a chance to spend it. An added benefit is that you are saving pre-tax, which means you get the full dollar benefit of the money you save and reduce your taxable income at the same time.

Need help creating a budget? Download WISER's Budget Worksheet to help you budget your money. You may also want to consider having a percentage of your paycheck put directly into a savings account or retirement plan. For more savings tips, read WISER Women: Keep Track of Your Spending.

National Save for Retirement Week: 3 Ways You Can Celebrate

It's that time of year again. The air is growing cooler, Halloween is approaching in all its candy coated glory, and soon the holiday season will be upon us. Before you get swept up in the upcoming winter holiday spirit, take some time to celebrate a week dedicated to protecting your financial future. October 19th kicked off the beginning of National Save for Retirement Week! This week represents the first Congressional effort to encourage Americans to save more for retirement. By retirement age, women are twice as likely as men to be poor and millions will confront their older years with scarce if any savings. Give yourself the ultimate gift, before the holidays wear on your wallet, by starting a savings plan now. Here are three tips to help you get in the National Retirement Week spirit:

1. Join a Savers Club: The American Savings Education Council (ASEC) has local chapters throughout the country that can assist you in meeting your savings needs through free events, tips, newsletters and club meetings. The DC Saves chapter features testimonials from other Savers on their website as well as targeted savings plans that can help you get out of debt, save for a home, or create an emergency fund. Visit ASEC's website to find a chapter near you or for more savings tips.

2. Try a Retirement Savings Calculator: ICMARC has created a page filled with retirement calculators and worksheets in honor of Retirement Savings Week. WISER features a retirement calculator on the WISER website which is accompanied by a Retirement Calculators fact sheet that can help you get started with your retirement savings plan. For more retirement calculators, read "Retirement Calculators: Predicting Your Future Income" or visit the FINRA website for an additional retirement calculator resource.

3. Learn About the Saver's Credit: The Saver's Credit is a non-refundable tax credit that's eligible for tax-payers who set aside part of their pre-tax income in employer sponsored retirement plans and traditional and Roth IRAs. Are you eligible? Learn more here.

Want More? Check back Thursday for a special National Save for Retirement week post from our Young Woman's Financial Planning Guide series!

Gaining Insight: The Financial Crisis on Wall Street

The United States Senate Committee on Banking, Housing & Urban Affairs met yesterday, October 16, to discuss the current financial crisis plaguing the country. The hearing, entitled, “Turmoil in the U.S. Credit Markets: The Genesis of the Current Economic Crisis,” was headed by Senator Dodd of Connecticut, featuring such speakers as Arthur Levitt, Jr, Senior Advisor of the Carlyle Group and Marc H. Morial, President and CEO of the National Urban League. Speakers offered insight on the “deeply serious and destructive market crisis” and their views on the best course of action in the present and possible preventable measures for the future.

In outlining the various factors leading up to this financial dilemma, manypanelists cited the importance of consumer education. As analysts, Congress members and government officials scramble to assess the effects of the current financial turmoil, take care to look into your financial situation and become informed about smart practices. One way to do this is to be wary of shoddy lending practices when you find yourself in the market for a loan. Predatory lending is just one example of unsavory lending. These lenders target low-income and minority neighborhoods and make false promises about easy access to credit.

Some Warning Signs of Predatory Lending:

-High-pressure and/or misleading marketing sales and efforts;

-Excessive fees and interest rates at levels well beyond what is needed to cover risk and make a reasonable profit;

-Large prepayment penalties that trap borrowers in an unaffordable loan;

-Aggressive or abusive collection practices.

It is important to note that predatory loans, while they are made to subprime borrowers, are not subprime loans. Predatory lenders use marketing tactics, collection practices and loan terms that are intended to deceive and exploit. For more information, view WISER’s Predatory Lending fact sheet on the WISER website.

401(k) Tips for Today's Economy

Recently, WISER has received a bevy of questions about 401(k)s. A reader from Baltimore wrote in wondering "What do I do in this economy? Do I leave my 401(k) untouched, do I pull everything out, or can I switch to different investments?" A recent caller from California lamented that "All of the headlines are so overwhelming. I'm trying to just keep saving and stick to a budget, but the newspaper puts me in a panic every morning. What do I do if my 401(k) investments keep suffering?"

WISER's non-profit status coupled with a lack of information on the details of either of our friends' financial situations makes it impossible to answer these specific questions. We sat down with WISER senior policy analyst Laurel Beedon to talk about a few rules of thumb that everyone can follow when it comes to taking care of their 401(k) during these troubling economic times.

Don't Keep all Your Eggs in One Basket!
Make sure that you are still contributing to a savings account outside of your 401(k) so that you have another source of retirement income. Consider investing in bonds, which are low-risk. " A bond is a loan, a stock is a chance," says Beedon. For more information on bonds, visit the WISER website and read our fact sheet: "US Savings Bonds."You can also learn more by visiting the US Treasury website at www.savingsbonds.gov.

Spread Your Risk
Find out more about the administrator of you 401(k). Where is your money now? Are there ways that it could be spread out? Make sure you have your money in a range of different funds so that if you suffer a blow to one of your investments, it doesn't have to impact all of your investments.

Stay Aware
Review your investments every six months. Consider seeking guidance from a financial planner. BE CAREFUL: Always ask how your planner is based. Commission-Based Financial Planners earn commissions on the investments they sell. They may have a bias for investments that will pay them commissions. Some commission-based planners also charge a fee. Look for a certified financial planner (CFP). You can call the Institute of Certified Financial Planners at 1-888-806-7526 or visit the Certified Financial Planner Board of Standards website at www.cfp.net.

Get Rid of Your Credit Card Debt
Paying more than the monthly minimum on your credit is a great investment. If you're concerned about your future finances, take care of your present debt so that you can save more for later. If possible, pay your credit card bill as soon as you receive it, especially if you are carrying over a balance, to reduce your interest charges and remember to pay off the credit card with the highest interest rate first.

Look into Savings Alternatives
Find out about options to supplement your savings plan. One option, depending on your present life circumstances and financial situation, may be annuities.

• Annuities:

Immediate: This is a straight-life annuity that pays a fixed amount for as long as you live. Another option is to get guaranteed payments for a certain number of years, for example, “life or 10 years certain,” and if you die sooner, your beneficiary receives the payments.

Deferred: This is an investment product that accumulates money until a future payment. Most annuity articles and advertisements seem to be talking about deferred annuities.

There are several types, including:

• Fixed – based on interest rate that is initially fixed and then may vary.
  
• Equity-indexed – based on the stock market, with a guaranteed minimum rate.
  
• Variable – based on accounts invested in stocks and bonds.

You may decide that the best way is to use a combination of both of these by managing your own retirement fund until the time seems right to convert some of your fund into an annuity. For more information, visit WISER's website and check out our publications and fact sheets on annuities.