WISER Women

Retirement & Savings: How Confident Are We?

2010-03-25T13:30:00.001-04:00

According to the Employee Benefit Research Institute’s newly released 2010 Retirement Confidence Survey, one quarter of workers surveyed stated that they have postponed their planned retirement age in the past year, due in large part to a combination of a poor economy and a lack of financial security for the future (i.e. little to no savings). For 33% of workers, this means retiring after the age of 65; a major increase from 19% a decade ago.

There is encouraging news to be found in this survey as the results show that Americans’ confidence in their ability to retire one day appears to be stabilizing. However, while confidence is up, reality paints a more somber picture. According to the data, there is still much to be done to boost Americans’ savings. Let’s take a closer look at the data:

Fewer are saving: Fewer workers report that they and/or their spouse have saved for retirement (69%, down from 75% in 2009). Moreover, fewer workers say that they and/or their spouse are currently saving for retirement (60%, down from 65% in 2009).

Ranks of those with no savings are growing: An increased percentage of workers report they have virtually no savings and investments. In total, more than half of workers (54%) report that the total value of their household’s savings and investments, excluding the value of their primary home and any defined benefit plans, is less than $25,000.

Clueless about savings goals: Many workers continue to be unaware of how much they need to save for retirement. Less than half of workers (46%) report they and/or their spouse have tried to calculate how much money they will need to have saved by the time they retire so that they can live comfortably in retirement.

Sources of retirement income: Fewer workers are expecting to receive retirement income from Social Security (77%, down from 88% in 1991) and defined benefit plans (56%, down from 62% in 2005). However, more workers report they will rely on employer-sponsored retirement savings plans (75% in 2010, up from 69% in 2005) and employment income (77%, up from 70% in 2005).

While the survey results may seem discouraging, this does not have to be everyone’s reality. It is never too late to change your financial situation for the future and start saving. Check out some of WISER’s helpful tips to get you back on track to a financially secure retirement.

Attention Caregivers: Health Care Costs Getting You Down? You're Not Alone...

2010-03-10T16:10:00.003-05:00

A new study by MetLife Mature Market Institute in collaboration with the National Alliance for Caregiving and the University of Pittsburgh Institute on Aging found that if you are a caregiver, it will likely affect both your health and your employer’s healthcare costs. Employees caring for older relatives are more likely to report health problems such as depression and hypertension. The healthcare costs for these employees are eight percent higher than for non-caregivers. Younger caregivers (18-39) generate even higher health care costs for employers- about 11 percent more than other employees.

The study highlights these important health implications for caregivers and their workplaces, but also points out that this is an opportunity for reform.

“Employers can provide support to their employees and, at the same time, reduce their health care costs by anticipating and responding to the challenges of eldercare,” asserted Sandra Timmermann, Ed.D, director of the MetLife Mature Market Institute.

The study recommends improvements in access to flexible work schedules, paid time off and telecommuting as ways to reduce the health problems that caregivers experience and also to show support for caregiving in the workplace. The full study can be found here.

Visit WISER’s Caregiving webpage for more caregiving resources.

Happy International Women's Day!

2010-03-08T10:00:00.002-05:00

Take part in International Women’s Day this year by recognizing the importance of caregivers around the world. WISER has put together a packet for caregivers, their family members, and friends to help with making important employment and financial decisions.

International Women's Day (March 8th) is a global day celebrating the economic, political and social achievements of women past, present and future. Almost 70 percent of the caregivers in the United States are female, and, around the world, women spend twice as much time caregiving as men.

WISER’s packet, Caregivers: Care for Yourself While Caring for Others, is a tool to help caregivers educate themselves about their financial situations today and plan for a secure financial future!

To learn more about events happening all over the world for International Women’s Day, visit the website.

Census Benefits for Women

2010-03-05T14:15:00.002-05:00

Every 10 years the United States is required by constitutional law to take a census of the American people. The census is responsible for helping the government gauge how federal funds should be allocated over the years to come and determines the number of seats each state may hold in the U.S. House of Representatives.

More importantly however, and our focus today, is the impact the census results have on low to moderate income women, who deeply benefit from additional federal funding. According to the Government’s website, “The 2010 Census will help communities receive more than $400 billion in federal funds each year for things like: hospitals, job training centers, schools, senior centers, bridges, tunnels and other public work projects, and emergency services.” The information collected from the census is used not only by the government, but by countless female oriented organizations that provide care, assistance, and support based on this information to those needing it the most. By taking 10 minutes to answer 10 quick and simple questions women can provide answers that could potentially aid them in the future.

In the past, the census has helped bring key women’s issues to the forefront of both government and non-profit agencies’ agendas. Statistics such as the number of women in the U.S., with jobs, with children, of different racial backgrounds, married or single, renting or owning their home are all collected and developed from information gathered from the U.S. Census. This information will help women gain the funding they need for years to come. As President Obama says, “We can’t move forward until you mail it back.” So when you receive your 2010 census form in mid-March fill it out and send it back, because it could be the determining factor behind getting that additional assistance you need over the next 10 years.

The CARD Act of 2009 Takes Effect Today!

2010-02-22T12:28:00.002-05:00

The Credit Card Accountability, Responsibility, and Disclosure Act takes effect starting today. This act will work to increase the amount of information clearly presented to consumers about their bills, interest, and changes to their account. This is good news for consumers, but you still need to understand these changes and pay attention to your credit card agreements and activity! Some of the changes include:

▪ Credit card companies must notify you at least 45 days before they can increase your interest rate or change certain fees applicable to your account.
▪ Your bill will have a table showing how long it will take you to pay off your balance if you make only the minimum monthly payments. Here is an example of a credit statement provided by the Federal Reserve:

New Balance $1,784.53
Minimum Payment Due $53.00
Payment Due Date 4/20/12

If you make no additional charges using this card and each month you pay the minimum payment,you will pay off the balance shown on this statement in about 10 years and you will end up paying an estimated total of $3,284.

If you make no additional charges using this card and each month you pay $62, you will pay off the balance shown on this statement in about 3 years and you will end up paying an estimated total of $2,232 (Savings= $1,052)

▪ Credit card companies cannot increase your interest rate for one year after you open the account. Be sure to read the fine print, as there are some exceptions to this rule.
▪ Credit card companies must mail you your bill at least 21 days before your payment is due. You must have the same due date each month and your payment must be deemed “on-time” if it is received before 5:00pm on that date.
▪ When paying your bill, if you make more than the minimum payment, the company must credit the extra amount to the balance with the highest interest rate.
▪ Credit card companies are prohibited from imposing “two-cycle billing,” meaning they can only charge interest on balances in the present billing cycle.

While these changes are encouraging and will help to protect you as a consumer, you should still carefully look at any information your credit card company sends to you and be aware of your plan’s details. For more information on the CARD Act and its provisions, read WISER’s newsletter.

Social Security Benefits Update!

2010-02-17T13:05:00.006-05:00

A major victory for individuals with disabling diseases and other medical conditions has been won through the addition of new Compassionate Allowances by the Social Security Administration. Compassionate Allowances allow SSA to offer benefits quickly to applicants whose medical conditions are so serious that they obviously meet disability standards. This update marks the first addition to the Compassionate Allowances list since its creation, and includes diseases like Tay Sachs Disease, Mixed Dementia and early-onset Alzheimer’s disease. The list is used to give individuals with those diseases access to benefits within days, as opposed to months or years, which has often been the case for people with more complicated applications.

Commissioner Michael J. Astrue asserted, “There can be no higher priority than getting disability benefits quickly to those Americans with these severe and life-threatening conditions.”

This victory has been celebrated by Alzheimer’s disease advocates, who have been fighting for streamlined benefits since 2003. Individuals with early-onset Alzheimer’s disease often have difficulties when applying for benefits which can take years to gain through appeal.

To see the full list of Compassionate Allowance Conditions that have been added, visit Social Security’s Compassionate Allowances webpage. Check out WISER’s website for information about Social Security benefits and why they are especially important for women.

What is the Earned Income Tax Credit and how EITC can benefit you?

2010-02-04T11:32:00.009-05:00

The Earned Income Tax Credit (EITC) is a refundable federal income tax credit designed for low to moderate income working individuals and families. It was originally approved by Congress back in 1975 as a means to offset the burden of social security taxes and to provide an incentive to work, however currently this credit has the ability to lift many struggling American families above the poverty line.

To find out if you qualify for the EITC ask yourself if you meet the following IRS listed requirements:

· You must have a valid Social Security Number

· You must have earned income from your job, working for yourself or another source.

· Your filing status cannot be married, filing separately.

· You must be a U.S. citizen or resident alien all year, or a nonresident alien married to a U.S. citizen or resident alien and filing a joint return.

· You cannot be a qualifying child of another person.

· Cannot file Form 2555 or 2555-EZ (related to foreign income)

· You can have only limited amount of investment income

Preview of 2010 Tax Year

Additionally in order to qualify you must be within the following income brackets:

Earned income and adjusted gross income (AGI) must each be less than:

$43,352 ($48,362 married filing jointly) with three or more qualifying children
$40,363 ($45,373 married filing jointly) with two qualifying children
$35,535 ($40,545 married filing jointly) with one qualifying child
$13,460 ($18,470 married filing jointly) with no qualifying children

Tax Year 2010 maximum credit:

$5,666 with three or more qualifying children
$5,036 with two qualifying children
$3,050 with one qualifying child
$457 with no qualifying children

*The American Recovery and Reinvestment Act (ARRA) provides a temporary increase in EITC and expands the credit for workers with three or more qualifying children. These changes are temporary and apply to 2009 and 2010 tax years.

To learn more about the EITC and how you might qualify for a tax credit please visit the IRS' EITC home page at http://www.irs.gov/individuals/article/0,,id=96406,00.html

Did You Know...

2010-01-21T14:06:00.007-05:00

The older population (65+) numbered 38.9 million in 2008, an increase of 4.5 million or 13% since 1998.
The number of Americans aged 45-64 - who will reach 65 over the next two decades - increased by 31% during this decade.
Over one in every eight, or 12.8% of the population is an older American.
Persons reaching age 65 have an average life expectancy of an additional 18.6 years (19.8 years for females and 17.1 years for males).
Older women outnumber older men at 22.4 million older women to 16.5 million older men.
Older men were much more likely to be married than older women - 72% of men vs. 42% of women. 42% of older women in 2002 were widows.
About 31% (11.2 million) of noninstitutionalized older persons live alone (8.3 million women, 2.9 million men).
Half of older women (50%) age 75+ live alone.
About 471,00 grandparents aged 65 or more had primary responsibility of their grandchildren who lived with them.
The median incom of older persons in 2008 was $25,503 for males and $14,559 for females. Households containing families headed by persons 65+ reported a median income in 2008 of $44,188.
Major sources of income for older people in 2007 were: Social Security (reported by 87% of older persons), income from assets (reported by 52%), private pensions (reported by 28%), government employee pensions (reported by 13%), and earnings (reported by 25%).
Social Security constituted 90% or more of the income received by 35% of all Social Security beneficiaries (21% of married couples and 44% of non-married beneficiaries).

*Statistics provided by the Administration on Aging's 2009 Profile - principal sources of the data are the U.S. Bureau of the Census, the National Center on Health Statistics, and the Bureau of Labor Statistics. To read more on AoA's 2009 profile click here.

Is the long term care component of the health care bill really a “CLASS Act?”

2010-01-14T15:02:00.001-05:00

The healthcare debate continues to be controversial and complex, and the CLASS Act seems to fall into both of those categories. The Class Act is one of the health reform components receiving a lot of attention—it is short for “Community Living Assistance Services and Supports” Act, and it would provide a voluntary system of long-term care insurance for Americans.

The way it works is that individuals would automatically be enrolled in the program through their employer unless they choose to opt out. The employer would take out monthly premiums from pay and send the funds to a “Life Independence Account.” After employees pay into the account for five years, they would be eligible to receive funds if they become disabled -- meaning they are unable to perform two or more daily activities like bathing, or dressing. Those eligible to receive benefits would receive at least $50 per day in assistance for the remainder of their lives.

Arguments in support of and in opposition to the new program:

Supporters emphasize that there is a huge population in need of care who would rather stay in their communities, but are forced to spend down their savings to qualify for Medicaid and enter nursing homes, or they require family members to provide unpaid caregiving assistance. Approximately one-fifth of Americans provided care for others, according to the National Alliance for Caregiving. Elderly spouses, most often wives, provided care for relatives for more than 30 hours each week.

If the CLASS Act (the Act) was in place, care-providing women might have access to paid help for a few hours each day. Two thirds of working caregivers are forced to take time off from work to provide care, so this benefit could help family caregivers to improve and maintain their own job security. Finally, Community living is much less expensive than living in facilities and the Act could help limit long-term care costs.

Opponents are not as much opposed to the rationale for the program, as they are focused on the financial details -- the program’s administration and its long-term impacts on the federal budget. Whether the program would be financially sustainable also remains debatable. The short-term financial outlook for the program is good, because individuals will pay premiums without receiving benefits. However, once participants start to become eligible for benefits, the trend is expected to turn in the opposite direction.

Another related concern is that only people who are prone to long-term illness may stay enrolled in the program, which would make higher premiums necessary to support the high-need participants. Finally, some opponents believe that this program will lead Americans to develop a false sense of security in terms of their long-term care insurance needs. While the Act is not meant as a substitute for private long-term care insurance, the concern is that people enrolled in the federal program will think they have all of the coverage they need.

If you wish to educate yourself about long-term care insurance further, WISER’s website has several informative fact sheets on the subject.

Get Your Ducks in a Row

2009-12-17T15:02:00.002-05:00

It is never too early, or too late to start saving for your retirement. The first step is understanding your current budget. Once you know how much you are spending in a month, you can figure out how much you can afford to save, or ways to increase your savings.

WISER’s retirement income worksheet, called Get Your Ducks in a Row, will help you to organize each of your sources of retirement income, so there is no guesswork as to how much retirement income you will receive each month. It is an easy-to-use tool that considers all of your benefits, such as Social Security, Employer Pensions, as well as contributions from part-time work. The worksheet also distinguishes which sources will keep up with inflation, and which will not.

This useful tool, as well as many other financial and retirement planning resources are available on WISER’s website.

Test Your Financial Prowess

2009-11-17T10:00:00.005-05:00

How much do you know about retirement security? Find out by taking this quiz from the Wall Street Journal:

1) What percentage of surveyed workers said that—in the wake of the financial crisis—they still plan to retire on their original schedule?

a. 21%
b. 31%
c. 41%
d. 51%

(ANSWER: b. Only about one-third of workers, according to a survey in September by Bankrate Inc., said the recession hasn't affected their planned retirement date. One in five said they anticipated leaving the office between one and five years later than planned.)

2) An analysis of trading behavior over a two-year period in 401(k) plans found that the greatest percentage of workers made a change in their accounts:

a. Once during the two years
b. Twice during the two years
c. Once each quarter
d. Twice each year
e. Never made any change

(ANSWER: e. Looking at a group of 1.2 million workers in more than 1,500 retirement plans, a report from the University of Michigan found that 80% of workers initiated no trades in their accounts during the two-year period. Eleven percent made only one trade."For the overwhelming majority of retirement savers," according to the report, "there is no evidence of portfolio rebalancing, shifts in risk tolerance with age, or tactical portfolio changes.")

3) What percentage of participants age 55-64 in employer retirement programs made the maximum contribution to their accounts in 2008—and what percentage of workers age 50-plus took advantage of catch-up contributions?

Maximum Catch-up
a. 10%a. 13%
b. 20%b. 23%
c. 30%c. 33%
d. 40%d. 43%

(ANSWERS: B (maximum) and A (catch-up). Vanguard Group, in a survey of its defined-contribution plans, with more than three million participants, found that only one in five workers approaching retirement made the maximum contribution to their employer savings accounts—and only one in seven workers took advantage of catch-up contributions. )

4) What percentage of workers and/or their spouses have tried to calculate how much money they will need to save for a comfortable retirement?

a. 34%
b. 44%
c. 54%
d. 64%

(ANSWER: B. Fewer than half of surveyed workers in 2009, according to the Employee Benefit Research Institute, had put pencil to paper—a fundamental step in any effective retirement plan. The same percentage said they simply guessed at how much money they will need in later life.)

5) In retirement, Social Security will likely replace what percentage of your pre-retirement income?

a. 23%
b. 33%
c. 43%
d. 53%

(ANSWER: b. Thus, the question: If Social Security, according to the agency's board of trustees, will provide approximately one-third of the amount needed for retirement, will your savings and assets be sufficient to generate the balance?)

6) The single best cure for a battered nest egg is to:

a. Invest more aggressively
b. Save more money
c. Work longer
d. Plan to withdraw less money from retirement savings

(ANSWER: c—for many people. There is, of course, no single best answer for patching a nest egg. A combination of two or more of these tactics probably would help many current and would-be retirees.)

* WISER has many resources to help you plan for your secure retirement, including a worksheet to help you add up your sources of retirement income as well as a general budget sheet to help you get on track today!

Source: Ruffenach, Glenn. “Have You Learned Your Lessons?” 14 Nov. 2009. The Wall Street Journal, Personal Finance. .

No COLA this year??

2009-11-03T09:17:00.002-05:00

The Social Security Administration’s announcement that it will not be providing Cost of Living Adjustment increases to its beneficiaries has caused quite a stir among seniors, nonprofits, and members of Congress. Here are some basic facts about the COLA itself, the implications of not having an increase, and the possibilities for other funding for Social Security beneficiaries.

Social Security benefits are adjusted each year to fit the cost of living increase measured by the Consumer Price Index. Because there has been inflation every year since 1975, there has also been an increase in social security benefits to help elders with the increased costs of living. This year, however, as a result of the economic crisis, the cost of living actually decreased. Thankfully, Social Security benefits are never smaller than they were the year before, but that means this year benefits will be the same as last year (no COLA/increase).

Even though the CPI measurement shows that the cost of living did not increase in the past year, elder advocates remind Congress that the economic crisis has hit seniors, as they pay high costs for healthcare and prescription drugs, and have few, if any, years of work to rebuild lost retirement savings. Because women live longer than men and have lower incomes due to time out of the workforce to provide caregiving and other duties, elder women are at a high risk of poverty.

President Obama is supporting a bill to provide $250 to seniors, veterans, and individuals with disabilities to make up for the lack of a COLA. The bill is called the Emergency Senior Citizens Relief Act of 2009 (H.R. 3597, S. 1685). President Obama’s proposed legislation would cost between $13 and 14 billion, but Social Security Commissioner Michael Astrue believes this payment is necessary to protect elders against medical costs that have increased “at a rate of inflation much higher than any other commodity.”

Opponents of the bill maintain that giving elders money even though the cost of living has not increased, will begin to transform the Social Security system into a welfare program. The COLA was designed precisely to increase only when inflation increased, and since that did not happen, seniors technically can purchase more with their benefits this year than last year. It is not Social Security’s responsibility to make up for the shortcomings of the overall economy, and beginning to compensate seniors in this way transforms the entire program from an earned benefit program to a welfare program. Finally, the country’s deficit is already large enough, without adding billions of dollars to the national debt. For these reasons, to opponents, Obama’s bill is unjustified and unnecessary.

Regardless of whether you support or oppose Obama’s bill to provide funding for seniors this year, those are the basic facts about the COLA in our Social Security program. Check back for updates on the bill!

Don’t Be a Statistic; Start Planning Your Financial Future!

2009-09-18T15:19:00.011-04:00

The Census Bureau’s newly released numbers highlight the challenges that almost all Americans are facing when trying to reach a financially stable retirement, and this challenge is even greater for women. A few findings from the report are as follows:

The wage gap between men and women grew between 2007 and 2008. Median earnings for women in 2008 were just $35,745, while median earnings for men totaled $46,367. Women are earning only 77 percent of what men earn, down from 78 percent in 2007.

The poverty rate increased this year also: the 2008 poverty rate was 13.2 percent, up from 12.5 percent in 2007. This is the first significant increase in the poverty rate since 2004.

The income deficit, the difference between a family’s income and the poverty line, for families in poverty increased between 2007 and 2008. This income deficit was largest for families with female headed households ($9,638). (Income, Poverty, and Health Insurance Coverage in the United States: 2008)

Women clearly have many obstacles to overcome when planning for a secure retirement. According to a WISER Special Report, The Pay Gap is Connected to the Retirement Gap, almost half of all women work in lower-paying jobs that do not offer retirement plans or 401(k)s.

In addition, women take, on average, 12 years off of work to provide caregiving. While women are busy taking care of family members, they lose years of income to add to their Social Security benefits and retirement plans.

What Can you Do About it?

While these statistics may seem daunting, there are lots of things women can do to start taking control of their financial futures, and the best time to start is now!

Want an easy way to get on the right track? Check out WISER’s website to learn about saving and investing strategies. Educating yourself is a crucial step in planning your secure retirement!

Savvy Saving for Young Women

2009-06-12T11:49:00.002-04:00

With the economy currently in recession and unemployment on the rise, it is vital for young people, especially young women, to start saving early. Job security is never a guarantee, so ladies, it's a good idea to become savvy with your spending and saving early.

Whether you're still in college or fresh into a job, it's essential to put some money aside each month. Investing in a mutual fund or U.S. Savings bond is a good idea, and the sooner you start the better, so the interest can compound for more years. Consider setting up and automatic withdrawal of $50 a month or more from your paycheck or checking account into your savings.

If you're still in college, collegescholarships.org offers several good tips on how to live on a budget while saving for the future.

After graduation and newly employed means a steady paycheck, but don't let this be a reason to spend more. Check out nextstudent.com to learn how to live on a budget, happily, while saving for the future.

Beth Kobliner's newly revised and updated Get a Financial Life examines personal finances in your twenties and thirties. Kobliner also discusses ways to get out of debt, save for your first home, and how to invest wisely with little money. Check out this review by USA Today.

Whether you're young and employed or still getting an education, don't put off saving. Start today.

5 Questions to Ask Your Mother or Grandmother

2009-05-14T16:21:00.000-04:00

May is Older Americans Month, and for many of us, the most important older Americans are our own parents and grandparents. Although thinking about retirement is difficult for everyone in these tough financial times, it is particularly important for women, who too often live out their retirement years in precarious financial straits.

This month, take time to help yourself - and those you love - plan for a more secure retirement. Start by asking your mother or grandmother the following questions, following up with suggestions found in the complete version. Together you may find some solutions that will make both of your lives better.

5 Questions to Ask Your Mother or Grandmother

1. Can you make ends meet; are you worried about depleting all of your savings?

2. Do you have a competent tax and financial advisor?

3. Are you struggling with prescription drug costs?

4. Are you getting all the medical care you need?

5. Have you been approached to get involved in charitable contributions, investment schemes, business ventures or loans that seem questionable?

To read the entire fact sheet, visit The National Education and Resource Center on Women and Retirement Planning at wiserwomen.org.

Happy Older Americans Month!

2009-05-08T11:02:00.002-04:00

Retirement Insecurity, a new report by The New Hampshire Women’s Policy Institute and underwritten by WISER, examines the financial status of New Hampshire’s older women and recommends state-level policy changes that could increase savings for current and future generations. The report provides the first-ever in-depth analysis of the financial status of New Hampshire’s women aged 65 and older. Among the paper’s major findings are:

· Women’s lower income during retirement years is driven by a disparity in lifetime earnings between women and men due to differences in pay rates, labor force participation in full-time and part-time work, as well as women’s primary role as caregivers in society. The estimated lifetime cost of caregiving is $659,139.

· New Hampshire women 65 and over who live alone have the lowest incomes among the state’s older population and are at the greatest risk of not being able to pay housing or health care costs. Sixty-two percent of older women living alone have incomes below what is needed to cover basic costs of living.

· The Institute estimates an older women living alone needs approximately $20,000 per year to cover the basic costs of living, just over twice the federal poverty level. Approximately 28,000 women 65 and over in New Hampshire had household incomes below that level in 2007.

· The lack of financial security is a major driver for public benefit programs as New Hampshire residents age. Is estimated that Medicaid spending on women aged 65 and over in 2020 is expected to cost New Hampshire taxpayers $330 million.

· There are a range of policies and activities which can be implemented now, many with minimal immediate cost that will help to ensure that the women of New Hampshire are able to live out their lives in the homes of their choosing and as a continued social, economic and political force in their communities.

For more information, go to http://www.nhwpi.org/, or download the Retirement Insecurity Fact Sheet. To access the 30-page report pdf, click here.

Blog About It: Elder Economic Security

2009-05-01T07:55:00.003-04:00

Today marks the start of Older Americans Month. WISER is partnering with Wider Opportunities for Women on its National Elder Economic Security Initiative: What does elder economic security mean to you? We encourage you to answer this question by leaving a comment on WISER's blog, or on the National Elder Economic Security Blog.

Old Age Is No Place for Sissies

Life Expectancy

While a long life can be a wonderful gift, a long life in poverty or near poverty is not so wonderful. Today, an average woman’s life expectancy at birth is 80.4 years, compared to 75.2 years for an average man. If a woman lives to age 65, she can expect to live until age 85 ― about three years longer than a 65-year-old man.

Marital Status

Many widows face poverty for the first time in their lives. Between the ages 75 –84, only 34 percent of women are married with their spouse present. For women aged 85 and older, only 13 percent are married with their spouse present. In contrast, 70 percent of men aged 75–84 and 56 percent aged 85 and older are married with a spouse present.

With the death of a spouse, women often experience a steep drop in income. When a woman becomes a widow, she stands to lose a significant amount of income from her spouse’s pension and even from Social Security.

Poverty

The poverty rate for all women age 65 and older is 12 percent. Single women in this age group are at a much higher risk of poverty. Over 20 percent of single white women are living in poverty; the rate is double for single African American and Hispanic women.

Portion of Single Older Women Who Are Poor and Near Poor
	Below 100% of Poverty (Threshold $9,669)	Below 150% of Poverty (Threshold $14,504)	Below 200% of Poverty (Threshold $19,338)
Age
65+	19.1	45.9	61.5

65-74	18.4	38.6	53.4

75+	19.5	47.1	66.5
Note: The poverty thresholds shown in this table are for 2007, calculated in 2008. Source: CPS, Table POV 01, 2008.

Retirement Income

The median annual income for women age 65 and older is not quite two-thirds of what men the same age are receiving ($14,021 compared to $22,323). Social Security is intended to replace approximately 40 percent of an average earner’s wages, but many women rely on it as their primary or only source of retirement income. This is one of the major reasons why so many women are poor or near poor.

In theory, women should be saving more money than men because they live longer and will need money to support themselves and pay for the rising cost of health care and prescription drugs. Yet in reality, they are not able to save the vast amounts that are needed due to diverse work patterns and caregiving responsibilities that require them to move in and out of the paid labor force or to work at part-time jobs where they are less likely to have retirement plans or savings.

As a result, millions of women are vulnerable to outliving their assets and facing the real possibility of poverty.

We can hope that public policymakers will adopt changes to prevent poverty in old age, such as providing caregiver credits, improving the Saver's Tax Credit, developing a better system of financing and providing long-term care. However, women must learn to make the most of the existing system and make the best financial decisions toward securing their futures.

So, what does Elder Economic Security mean to you?

Why does she earn less?

2009-04-29T10:41:00.004-04:00

Yesterday, Tuesday, April 28 was Equal Pay Day.

Today, 56 percent of working women earn less than $30,000 a year and only 7 percent earn more than $75,000; in contrast, 39 percent of men earn less than $30,000 and 18 percent earn more than $75,000. Women, on average, are paid 78 cents for every dollar a man makes. For those ages 65 and older, the income gap between women and men is even larger—older men’s median annual income was almost twice that of older women ($23,500 and $13,603 respectively).

So, why does she earn less?

Part of the wage gap between the sexes is the result of differences in education, experience, or time spent out of the paid workforce; but a significant portion of the gap cannot be explained by any of these factors, and may simply be the result of wage discrimination. Working women pay a steep price for unequal pay. The typical working woman with a college degree will make about $500,000 less in wages over her lifetime than an equivalent male—an amount that could provide a comfortable retirement nest egg.

Take Action

From The National Committee on Pay Equity—Urge your senators to support the Paycheck Fairness Act:

The House passed the Paycheck Fairness Act to strengthen enforcement of the Equal Pay Act on January 9, 2009. Please urge your senators to support S.182. The Paycheck Fairness Act would ensure effective remedies for wage discrimination and make it easier to sue on behalf of groups of women. Read NCPE's Feb. 23, 2009 letter to senators urging quick action on the Paycheck Fairness Act (S.182).

(http://www.pay-equity.org/PDFs/Letter-to-Senate-PFA2-23-09.pdf)

For more on the gender wage gap, go to http://www.pay-equity.org/.

WISERWoman & Long-Term Care

2009-04-23T09:56:00.006-04:00

What comes to mind when someone uses the term "long-term care"? Do you picture a nursing home or a hospital? Long-term care includes a broad range of health and support services that people need as they age or if they are disabled, including personal care and assistance with daily tasks such as eating, dressing and bathing. The latest issue of WISERWoman highlights long-term care, examines its costs and explores long-term care insurance as an option. For women, who are more likely to live alone in old age, it is crucial to begin asking the tough questions related to long-term care: Who will provide care? How will I pay for it? Should I buy LTC insurance?

Read it here.

Find Out More: Viaticals Resource Guide

2009-02-25T14:15:00.000-05:00

This week, we chatted with WISER Senior Policy Analyst Laurel Beedon about Viaticals. If you still have questions on viaticals or you're just looking for more information, here's WISER's list of Viaticals resources:

American Council on Life Insurance
1001 Pennsylvania Avenue, N.W.
Washington, DC 20004-2599
www.acli.org

National Association of Insurance Commissioners
444 North Capitol Street, N.W.
Washington, DC 20001
www.naic.org

National Association of People with AIDS
1413 K Street, N.W.
Washington, DC 20005
www.napwa.org

National Viatical Association
1200 G Street, N.W., Suite 760
Washington, DC 20005
www.nationalviatical.org

For more information, you can also contact your state insurance commissioner or state attorney general. The National Association of Insurance Commissioners has state-by-state contact information for insurance commissioners here.

WISER Celebrates America Saves Week!

2009-02-25T09:00:00.000-05:00

This week is America Saves Week. All over the country, individuals and organizations are using this week to rededicate themselves to saving and paying down debts. Many are worried about their retirement. These issues are especially important for single women. Women live longer and earn less than men; they are also more likely to remain single, to be widowed or divorced and vulnerable to poverty.

For America Saves Week, WISER has new resources for women who are going through a divorce or who have been widowed. WISER’s guide, “Divorce and Retirement: Take Control of the Retirement Benefits,” helps women navigate the complicated world of dividing retirement benefits at divorce, while “WISER’s Report on Widowhood” offers financial tips for widows of all ages.

Spare Change: Stimulus Act Offers Premium Assistance COBRA Beneficiaries

2009-02-24T15:53:00.000-05:00

Beginning March 1, 2009, the government will subsidize 65% of the cost of COBRA premiums for eligible workers and their dependents who were/are involuntarily terminated between September 1, 2008 and December 31, 2009 for up to nine months. The subsidy is available as long as the person's adjusted gross income is $125,000 or less ($250,000 or less for joint filers). It is phased out as adjusted gross income increases from $125,000 to $145,000 ($250,000 to $290,000 for joint filers), so that there is no subsidy at all above those levels.

For those who did not initially elect COBRA coverage, the legislation also provides an additional 60 day election period.

Q&A: Viaticals

2009-02-24T14:50:00.004-05:00

This week, the WISER blog writers had a Q&A session with WISER's Senior Policy Analyst, Laurel Beedon, on Viaticals. A viatical is a legal document that sells your life insurance policy to a third party.

Q:Why would I sell my life insurance?
A: A viatical can provide needed money if you are terminally or chronically ill and in a difficult financial situation.

Q: Who is involved?
A: You, as a terminally or chronically ill person sell your life insurance policy to an investor in return for a lump-sum payment. The investor then takes over payments on the policy and is the beneficiary of the policy upon your death. Usually, a viatical broker arranges the agreement between you, the seller of the policy, and the buyer using a viatical purchase agreement. The broker is paid a commission.

Q: What should I find out?
A: If you are considering a viatical, it is important to ask some questions and learn about all the options on your life insurance policy before you make your decision.

Here are some questions to ask and people to check with before you decide on a viatical:

Do you have any cash value in your life insurance policy? If so, you may be able to use some of the cash value to meet your immediate needs and still keep your policy in force for your beneficiaries without having to sell it to a third party.

Does your life insurance carrier offer accelerated death benefits? Those benefits could pay you a substantial portion of your policy’s death benefit and you wouldn’t have to sell your policy to a third party.

Will your receipt of cash from a viatical agreement be taxed? Check with your financial or tax advisor.

Will you lose any public assistance or social service benefits such as food stamps or Medicaid if you receive a cash settlement?

Will buyers of your policy be able to learn your identity and will they know certain medical and personal information about you, such as your address and life expectancy?

Before you make any major decisions, you may also want to consult your own financial advisor or attorney. Shop around. Talk with several companies and/or brokers to find the best arrangement. Don't fall for high pressure tactics. You don't have to accept an offer, and you can change your mind. Check with your state insurance department to verify the company or broker you are considering is licensed. Check with your state attorney general’s office for complaints against the company.

Tomorrow: Find Out More: Viaticals Resource Guide

Financial News You Can Use

2009-02-23T10:22:00.002-05:00

-On February 17, 2009, President Obama signed the American Recovery and Reinvestment Act of 2009. This new legislation provides a one-time payment of $250 to Social Security and Supplemental Security Income beneficiaries. Over 60 million beneficiaries will receive a one-time payment. Social Security expect all payments to be delivered by late May 2009. To assist Social Security in issuing these payments as quickly as possible, beneficiaries should not contact Social Security unless they do not receive their payment by June 4th.

-A new law may make it easier for some Americans to allow their retirement funds to recoup losses. That’s because mandatory withdrawals from certain retirement accounts have been waived for tax year 2009. Usually, anyone age 70 1/2 or older is required to withdraw funds from their retirement plans each year, even if the money isn’t needed. These plans include 401(k)s, 403(b)s, some 457(b)s as well as IRAs and IRA-based plans such as Simple IRAs and SEPs.
However, The Worker, Retiree and Employer Recovery Act of 2008 waives the requirement to withdraw funds in 2009. To learn more, visit www.irs.gov/pub/irs-drop/n-09-09.pdf.

-For people who want to save, Social Security offers online planning tools such as the Retirement Estimator. The Estimator allows people to try out different retirement scenarios. Just plug in some quick information and you’ll get estimates of your future benefits based on your personal earnings record. Try it out at www.socialsecurity.gov/estimator.

Facing Divorce? Be Sure to Protect Your Finances

2009-02-18T10:00:00.000-05:00

In The Observer’s January 25, 2009 edition, an article entitled “Men become richer after divorce,” written by Amelia Hill, a social affairs correspondent, exposed truths regarding the financial well-being of divorced spouses who have children. In a study conducted by Stephen Jenkins, director of the Institute for Social and Economic Research and chair of the Council of the International Association for Research on Income and Wealth, findings reveal a father’s income rose by one third after divorce, and a woman’s income fell by more than one fifth after divorce regardless of whether the female is a mother. In concordance with the findings, Ruth Smallacombe, a family consultant at Resolution and Family Law in Partnership (Flip) stated, “The general belief that men get fleeced by their divorces while women get richer and live off the proceeds has long been due for exposure as a pernicious myth.” While 27% of separated women are impoverished, less than 9% of separated men face this challenge. Women need to be prepared for the obstacles they may face after divorce. Remember, marriage is a shared partnership. To learn more about how to ensure that you receive your share of the marital property, read WISER’s newly published report entitled, “Divorce and Retirement: Take Control of Retirement Benefits.”

New WISER Release: Divorce and Retirement: Take Control of Retirement Benefits

2009-02-17T13:53:00.002-05:00

The Women's Institute for a Secure Retirement (WISER) today released Divorce and Retirement: How to Take Control of Retirement Benefits, a short, commonsense guide on a complicated topic: splitting the financial assets -- all of them -- during a divorce. For hundreds of thousands of couples, this Valentine's Day is only another reminder of the fraught financial reality that divorce presents.

"Divorce is complicated enough without having to worry about retirement benefits," says Cindy Hounsell, President of the Women's Institute for a Secure Retirement. "Our goal is to arm women against their biggest enemy, and it's not the husband -- it's a lack of information."
Written by WISER staff, including D.C.-based divorce attorney and expert Anne E. Moss, Divorce and Retirement claims that what you don't know -- and don't ask about -- can and will hurt you in a divorce. WISER urges readers to get as much information as possible prior to the divorce because "it's nearly impossible to go back to court and ask about a share of your ex-husband's benefit that you learn about after the fact."
The booklet includes Moss's "10 Ways to Avoid Losing the Pension During a Divorce," -- a harsh wakeup call to anyone who currently trusts her lawyer completely. As Moss says, "Ask your lawyer these questions!"

Hounsell agrees. "Knowing what to ask your lawyer can save you from additional heartache during a divorce," she says. "Trust no one -- and never assume that your attorney is an expert on the many federal and state laws in place for splitting retirement benefits."
Because pension and retirement benefits are not automatically split in a divorce, they are often overlooked, and women especially can end up losing big. Divorce and Retirement reiterates the importance of these benefits and breaks down the legal jargon that usually accompanies information on marital property, negotiating an agreement, and getting a qualified domestic relations order (QDRO). WISER also points readers to additional resources, such as AoA-funded Pension Rights Projects across the country, and fact sheets that go into further detail.
"This booklet is not about getting more than your share, or getting back at your former spouse," says Hounsell. "It's about money -- your money -- and how to make sure an innocent oversight (or not-so-innocent) doesn't prevent you from receiving extra help when you'll probably need it most -- in retirement."

Divorce and Retirement is available for free online at www.wiserwomen.org, or in hard copy for $4. Contact WISER at info@wiserwomen.org or call 202-393-5452 for more information.

Government Gives Retirement Funds Room to Recover

2009-02-09T13:25:00.001-05:00

A new law may make it easier for some Americans to allow their retirement funds to recoup losses. That’s because mandatory withdrawals from certain retirement accounts have been waived for tax year 2009.

Usually, anyone age 70 1/2 or older is required to withdraw funds from their retirement plans each year, even if the money isn’t needed. These plans include 401(k)s, 403(b)s, some 457(b)s as well as IRAs and IRA-based plans such as Simple IRAs and SEPs. However, The Worker, Retiree and Employer Recovery Act of 2008 waives the requirement to withdraw funds in 2009. To learn more, visit www.irs.gov/pub/irs-drop/n-09-09.pdf.

[Government Gives Retirement Funds Room to Recover] IRS.gov

Do You Qualify for the EITC?

2009-02-06T10:00:00.000-05:00

Do you:

Possess a valid Social Security number.
Meet certain residency and filing criteria, including following guidelines for a qualifying child.
Have an investment income that's no more thatn $2,950.
Have a total earned income of at least $1 and and an earned income and adjusted gross income (AGI) that's less than:

$12,880 with no qualifying child ($15,880 if married, filing jointly)
$33,995 with one qualifying child ($36,995 if married, filing jointly)
$38,646 with more than one qualifying child ($41,646 if married, filing jointly)

If you meet the criteria above, you may be eligible for the Earned Income Tax Credit (EITC). The EITC is a refundable credit for low and moderate-income taxpayers. If you qualify, you could pay less federal income tax, pay no tax or receive a refund. To find out if you're eligible for an EITC this year, visit the IRS website and use their eligibility tool. If you know you're eligible, find out how much your EITC will be for 2008.

Legislative Update: Paycheck Fairness Act

2009-02-05T10:00:00.001-05:00

With the Lilly Ledbetter Fair Pay Act passed, the pay equity community turns its attentions to the Paycheck Fairness Act. This legislation was introduced with the Lilly Ledbetter Fair Pay Act and was approved by the House, but has yet to reach the Senate.

The Paycheck Fairness Act would strengthen the Equal Pay Act (EPA) and allow it to fulfill its promise that women would receive equal pay for equal work, a promise that has remained unfulfilled now for forty five years. The EPA narrowed the wage gap, which previously had women earning 59 cents to a man's dollar, but so far it still has not been able to close it. Women now make 78 cents to a mans dollar, an negligible increase from 2006 when women made 77 cents. The Paycheck Fairness Act would prohibit employers from retaliating against workers who share salary information. This information is often key to uncovering instances of pay discrimination. The bill would also ensure that if there are pay-disparities, they are based on legitimate work-related reasons rather than gender. Essentially, it would close the loopholes that riddled the EPA and create systems and tools that would offer women legal protection from pay discrimination.

We will continue providing you with updates on the Paycheck Fairness Act. For more information, check out these resources:

How the Paycheck Fairness Act Will Strengthen the Equal Pay Act from the National Women's Law Center
The Paycheck Fairness Act, H.R. 1338, is Essential to Combating Pay Discrimination Against Women in the Workplace from the National Partnership for Women & Families

Savvy Saver: Savings Tips and Tricks

2009-02-04T10:08:00.005-05:00

America Saves week is just around the corner, making it a perfect time to talk about how to save. Money may be tight these days, but there are tips and tricks that can help you continue to contribute to your savings plan. Whether your putting away money for retirement, creating an emergency fund, or just trying to create a tighter day to day budget, these resources can help you work towards your savings goals.

Learn about the Savers's Tax Credit: The Saver's Tax Credit is a non-refundable tax credit for contributions to qualified retirement plans such as 401(k)s, IRAs and others. This credit is for low and middle income taxpayers and provides a credit between 10% and 50% of your retirement plan contribution each year, up to $2,000.00. Think you might qualify? Find out more by dowloading WISER's new fact sheet "The Saver's Tax Credit."

Consider a $50 a month – or more – automatic deduction from your paycheck or checking account to invest in a mutual fund or to buy U.S. Savings Bonds: The sooner you start the better! Investing early pays off because the interest compounds for more years.

Find out if you qualify for an Earned Income Tax Credit (EITC): Locate the Volunteer Income Tax Assistance office near you for free in-person tax help by contacting the IRS at: 800-829-1040 or visiting www.irs.gov.

Young Women and Social Security

2009-02-03T14:12:00.004-05:00

Social Security has a present this year for young workers. If you're between the ages of 25 and 35, you will receive a new insert in your annual Social Security statement. "What Young Workers Should Know About Social Security and Savings" provides valuable information on how Social Security works with tips and resources on how to save. It also answers the age old question "Will Social Security still be around when I retire?" If you can't wait for your annual statement, download the insert here.

Still looking for more resources on Social Security? Check out the Social Security section of the WISER website for more information.

State Healthcare Coverage May Aid in Creating a National Plan

2009-01-30T14:51:00.008-05:00

A feeling of excitement was felt on Capitol Hill in one of the first hearings, conducted after the inauguration of President Barack Obama. On Thursday January 22, 2009, the Senate’s Health, Education, Labor, and Pensions committee held a hearing to examine measures states are enacting to keep their citizens healthy.

According to Senator Edward M. Kennedy of Massachusetts, the chairman of the committee, 38% of deaths related to chronic illness among Americans arise from alcohol use, smoking, physical inactivity and poor diet. In addition, 75% of health care costs associated with chronic disease are preventable. State Senator of Iowa, Jack Hatch, stressed the importance of preventative healthcare measures. He mentioned that Iowa should lead prevention and wellness initiatives by enabling doctors to use efficient practices and administer proper protocols necessary to treat chronic illnesses. Health care costs are continuing to rise making it necessary for people to receive proper health education, so they can make better lifestyle choices to improve health and contain costs. The state of Iowa has enacted preventative healthcare measures as a means of reform. Some include: 1. By 2011, the state is expected to provide healthcare coverage for all eligible children 2. Iowa has strengthened its public health and prevention programs by launching the healthy communities initiative, enabling small businesses to receive a qualified wellness tax credit.

Mr. Emmet spoke about our country’s failure to treat mental illness. He revealed mental illness is a major cause of disability, yet many insurance services do not provide coverage for mental health visits.

Dr. Dobson stressed the need for community healthcare services. He revealed quality of healthcare can be enhanced and the cost of healthcare can be reduced by providing people with primary care, creating local networks to gather resources and providing state funding for healthcare related programs. State healthcare systems need to be sustained in order to enable one to have access to care and be treated efficiently.

Dr. Bigby spoke about the importance of prevention. She mentioned the 2006 Massachusetts health care reform bill designed to provide the citizens of the commonwealth with universal coverage. 97.4% of Massachusetts residents contain healthcare coverage, 99% of kids contain coverage and 90% of residents have regular healthcare providers and thus receive preventative care. In addition, Dr. Bigby spoke about “Mass in Motion,” a program designed to promote healthy eating and exercise through grants to cities and towns in hopes of making wellness a priority. She also addressed the need to remedy the racial and ethic disparity prevalent in who receives healthcare coverage.

The experts at this hearing were in agreement that access to and quality of healthcare needs to be augmented. In order for people to live healthier lives, they say diet and exercise programs, as well as preventative and routine healthcare services need to be provided to the people of our nation.

Free Social Security Webinar

2009-01-23T14:38:00.004-05:00

Social Security is hosting its first national webinar on January 29, 2009. Retire Online, It's So Easy! will offer a demonstration of the new Social Security online application as well as a discussion of its key features. If you're interested in finding out more about the SSA online application, join SSA online at 2pm EST next Thursday. To RSVP, visit http://www.socialsecurity.gov/survey/retireonlinersvp.htm.

Lilly Ledbetter Passes in the Senate!

2009-01-23T09:38:00.008-05:00

(Interview of Lilly Ledbetter following the Senate passage of the Lilly Ledbetter Fair Pay Act: from the National Womens Law Center, http://www.nwlc.org/)

The Senate passed the Lilly Ledbetter Fair Pay Act yesturday with a vote of 61 to 36. This will be the first piece of legislation Congress sends to newly elected President Obama for his approval. It's a fitting first bill for the President, who incorporated Ms. Ledbetter's story into his campaign ads and entered DC on his inaugural whistlestop tour in the company of Ms. Ledbetter herself.

So what does it all mean? Will the Lilly Ledbetter Fair Pay Act close the wage gap once and for all? Not quite. This is an important step towards pay equity, a step which will allow women to fight back against unfair wages by making each unfair paycheck count as a new act of discrimination. Now, no matter when a woman finds out that she’s been discriminated against, she can still take action. But there is still more to be done to ensure that women receive equal pay for equal labor.

One of the next steps for pay equity may be the Paycheck Fairness Act. This companion piece to the Fair Pay Act was passed by the House but so far has not made it to the Senate. According to Ledbetter "One bill fixes a past mistake, and the other makes sure that such a mistake won't happen again." 46 years after the passage of the Equal Pay Act (EPA), women are still earning 78 cents to a man's dollar. The Fair Pay Act would update the EPA and close the loopholes that have hindered its success.

[The Paycheck Fairness Act is Essential to Combatting Pay Discrimination Against Women in the Workplace] National Partnership for Women and Families
[The Fair Pay Campaign] NWLC
[From the Desk of Lilly Ledbetter] AAUW

Pay Equity: Do You Have Five Minutes?

2009-01-16T17:13:00.009-05:00

As the Senate proceeds with the Lilly Ledbetter Fair Pay Act and the recently House-approved Paycheck Fairness Act glimmers on the horizon, it's a great time to find out more about pay equity. Women currently make 78 cents to a man's dollar, which over time adds up to $1,200,000 less in income than men over a lifetime for college educated women. For high school educated women, the lost earnings amount to a whopping $700,000.

Want to get involved, but don't know where to start? Here are five ways you can learn more about pay equity in five minutes:

1) Got Cents?: The Fair Pay Cents quiz was created by the National Committee on Pay Equity to test your knowledge on the wage gap. Click here to take the quiz!

2) Know Your Rights: Do your quiz results have you wanting to learn more? In 2006, then-Senator Hillary Clinton hosted a "Pay Equity for Women" seminar where she released "Know What to Ask and Know Your Rights: A Pay Equity Guide on How to Help Yourself in the Workplace." This brief guide outlines tips for successful pay negotiations and what you should do if you suspect that you've been a victim of pay discrimination. Click here to download the pdf.

3) Tell a Friend: Want to inform your friends about pay inequity? Why not send them a "Keep the Change" card from AAUW? AAUW recently launched their "Keep the Change Until Women Have Real Change" campaign. Tell your friends about pay equity by visiting http://www.aauw.org/postcards/keepthechange.cfm

4) Tell a Senator: The Lilly Ledbetter Paycheck Fairness Act is currently being discussed in the Senate and will be up for a vote in the very near future. Let your senators know if pay equity is important to you by contacting them. You can find contact information for your senators at www.senate.gov. Not sure what to say? AAUW has a message you can send via e-mail and will send it for you: all you have to do is enter your name and zip code. Find out more by visiting the AAUW website.

5) Stay tuned: We will continue posting updates on the status of the Lilly Ledbetter Fair Pay Act as it moves through the Senate. So check back for updates this week!

Legislative Update: Lilly Ledbetter Fair Pay Act

2009-01-14T13:28:00.004-05:00

On January 9th, the House passed the Lilly Ledbetter Fair Pay Act. Now our attentions are turned towards the Senate to see what will become of this legislation, which passed in the House last year as well, but faced defeat in the Senate. The Senate has invoked cloture, which should lead to a final vote in the next few days.

Lilly Ledbetter was a supervisor at Goodyear Tires and Rubber Plant for nineteen years before it came to her attention that she was experiencing pay discrimination. Though the Court of Appeals ruled in her favor and awarded her backpay and damages, their decision was overturned when the case reached the Supreme Court. The Ledbetter v. Goodyear Tire and Rubber Company verdict set a precedent that pay discrimination claims must be filed within the 180 days following the first instance of discrimination. Like Lilly, women may not find out for years that they are victims of pay discrimination. The Supreme Court’s decision made it even more difficult for women to submit pay discrimination claims and provided no incentive for employers to cease their discriminatory practices, since they would not be penalized if their actions went undetected in the first six months of employment. The Lilly Ledbetter Fair Pay Act would overturn the Supreme Court’s decision and allow women to pursue pay discrimination claims 180 days after each instance of pay discrimination.

Ledbetter gained fame during the 2008 elections when she appeared in advertisements for Barack Obama. This weekend, she will accompany President-Elect Obama on his inaugural train ride into DC.

We will post updates on the Lilly Ledbetter Fair Pay Act as more information becomes available. In the meantime, if you're interested in getting involved, you can find contact information for your senators at www.senate.gov. Visit the National Committee for Pay Equity's website to learn more about pay equity as well as the Lilly Ledbetter Fair Pay Act.

[ Keep the Senate Moving on Pay Equity Legislation ] AAUW
[ Pelosi on House Passage of Lilly Ledbetter and Paycheck Fairness Act ] PRNewswire

Women and Social Security: New WISER publication

2009-01-14T12:29:00.003-05:00

Did you know:

More than 50% of women age 65 and older would live in poverty if it were not for their Social Security benefits.
Without Social Security, the poverty rate for older African-American women would jump from 25% to 62%.
Even with Social Security, 12% of all older women are poor.

Find out more about the ways Social Security benefits impact women by reading "Women and Social Security," the first installation of WISER's online "Your Future Paycheck" series. You can download the chapter here or visit the WISER website for more information.

SSA Launches Online Retirement Application Process

2009-01-12T13:07:00.003-05:00

Picture this: You're lying on your couch, laptop propped on your lap, clad in your favorite pajamas. You're comfortable, you're relaxed...you're applying for Social Security. Sound impossible? Well Social Security has recently made this dream a possibility by introducing an online application for Social Security benefits. The new application offers a number of perks previously unavailable for Social Security applicants, including a retirement estimator and the ability to take breaks while filling out your application. You can save your Social Security application online and continue filling it out at a different time. Don't worry that this will jeopardize the security of your application: SSA guarantees that they've taken every precaution to make sure that your application is secure. Even your favorite TV stars of the past are getting in on the online application action. You can watch Patty Duke reprise her roles as cousins Cathy and Patty Lane in the SSA public service announcement posted above, which shows the identical cousins using less than identical methods of applying for Social Security. Guess which tech-savvy Lane girl has an easier time with the new online application!

For more information on applying online, check out this electronic fact sheet from SSA: "How to Apply Online for Retirement Benefits."

...and we're back!

2009-01-12T12:51:00.003-05:00

The WISER Women blog took a short hiatus for the holidays, but we will return to our regular posting schedule this week!

Money Minded Gifts: Financial Planners

2008-12-18T09:00:00.000-05:00

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

2008-12-16T16:47:00.004-05:00

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

2008-12-11T12:26:00.003-05:00

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

2008-12-08T10:34:00.001-05:00

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

2008-12-04T10:07:00.006-05:00

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

2008-12-03T09:45:00.000-05:00

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

2008-12-02T10:26:00.004-05:00

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

2008-12-01T14:46:00.006-05:00

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

2008-12-01T10:54:00.011-05:00

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

2008-11-28T09:00:00.011-05:00

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!

2008-11-27T10:05:00.000-05:00

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

2008-11-26T11:35:00.000-05:00

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 “Caregivin g” where you can find more information.

Want to Work for WISER?

2008-11-26T10:17:00.000-05:00

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

2008-11-25T10:00:00.000-05:00

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

2008-11-24T12:14:00.001-05:00

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

2008-11-18T12:49:00.004-05:00

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

2008-11-10T10:37:00.012-05:00

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

2008-11-04T12:36:00.009-05:00

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

2008-11-03T13:50:00.003-05:00

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

2008-10-31T10:45:00.002-04:00

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

2008-10-29T16:15:00.004-04:00

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

2008-10-29T11:47:00.003-04:00

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

2008-10-28T11:29:00.004-04:00

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?

2008-10-27T11:05:00.005-04:00

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

2008-10-23T09:25:00.003-04:00

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

2008-10-20T15:24:00.010-04:00

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

2008-10-17T15:30:00.013-04:00

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

2008-10-16T12:55:00.002-04:00

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.

Why Women Are Poor in Retirement

2008-10-16T08:32:00.002-04:00

This post by WISER president Cindy Hounsell was featured on the National Council for Research on Women's blog, "The Real Deal," in honor of Blog Action Day-08: Poverty.

WHY WOMEN ARE POOR IN RETIREMENT
By Cindy Hounsell President of the Women’s Institute for a Secure Retirement

As the candidates get ready for their debate tonight, there are a few things I would like to tell them.

First, Social Security is intended to replace approximately 40 percent of an average earner’s wages, but many women rely on it as their primary or only source of retirement income. This is one of the major reasons why so many women are poor or near poor.

Second, in theory, women should be saving more money than men because they live longer and will need money to support themselves for about three to four more years than men on average and pay for higher expenses for health care and prescription drugs. Yet, in reality they are not able to save the vast amounts that are needed. As a result, millions of women are vulnerable to outliving their assets and facing the real possibility of poverty.

My hope is that public policymakers will adopt changes to prevent poverty in old age such as providing caregiver credits, improving and expanding the saver’s tax credit, developing a better system of financing and providing long-term care and considering the needs of older women who spend much of their income on health related expenses. In the meantime, women need to make the most of the existing system and make the best financial decisions toward securing their futures.

Some basic and troublesome facts about women and retirement security—information the candidates need to hear:
Earnings
• Two-thirds of working women earn less than $30,000 a year.
• Nearly half of all women work in low-paying jobs without retirement plans or 401 (k)s.
• Women earn on average 78 cents for every dollar earned by men.
• Working women pay a steep price for unequal pay. The typical 25 year old woman with a college degree in 1984, who is now in her mid 40s, has lost a total of $440,743 in wages over her lifetime.
• Median earnings of full-time women workers in 2007 were $31,928 compared to $39,832 for men. The gap for minority women is even larger: median earnings for African American women in 2007 were $26,988; for Latino women, earnings were $22,880.

Work Status
• Women are more likely than men to work part-time. Part-time employment is associated with lower wages and fewer opportunities for retirement benefits.
• Over a lifetime, women will spend 27 years in the workforce, compared to almost 40 years for men.

Life Expectancy
• Today, an average woman’s life expectancy at birth is 80.4 years, compared to 75.2 years for men. If a woman lives to age 65, she can expect to live until the age of 85 ― about three years longer than a 65-year-old man.

Marital Status
• Between the ages 75–84, only 34 percent of women are married with their spouse present. For women aged 85 and older, only 13 percent are married with their spouse present. In contrast, 70 percent of men aged 75–84 and 56 percent aged 85 and older are married with a spouse present.
• With the death of a spouse, women often experience a steep drop in income. When a widow loses a spouse she also stands to lose a significant amount of income from her spouse’s pension and even from Social Security.
• Many widows face poverty for the first time in their lives.

Retirement Income
• The median income for retired women is $13,764 compared to men’s income of $23,322 or 59 percent of what retired men are receiving.
• The poverty rate for women age 65 and over is 12 percent. Single women in this age group are at much higher risk of poverty. Over 20 percent of single white women are living in poverty; the rate is double for single African American and Hispanic women.

In light of these facts, any national discussion about cutbacks in the Social Security and Medicare programs should not just be focused on reducing the deficit but balanced with the actual delivery of income and benefits and the implications on the lives of older women. Women traditionally spend their money on taking care of their families throughout their working lives.

Let’s hope our candidates and policymakers remember this as they create our future policies.

For more information on NCRW, check out their Real Deal blog .

The Importance of Professional and Financial Independence for Young Women

2008-10-14T14:24:00.002-04:00

According to Linda Lewis Griffith, marriage and family therapist, young women are faced with a barrage of decisions between the ages of 18 and 24, ranging from those that are career-related to those that are financially-related. To complicate matters, these life events generally coincide with the advent of serious romantic relations, marriage and child rearing. Although these matters of the heart can certainly be thrilling, they can also prove distracting.

During her time as a therapist, Griffith has dealt with “many well-intentioned females [who] have curtailed their plans and futures when a man came into their lives.” The fog of romance may cause women to drastically alter their goals for their careers and education. According to Griffith, in some cases, their “lives go terribly awry when Mr. Right turns out to be oh-so-wrong.” When relationships fizzle, these women may be left unemployed or without financial prospects.

The recent Sex and the City movie touted female financial independence through the powerful and self-sufficient characters of Samantha Jones and Miranda Hobbs. However, financial help for women who suddenly find themselves boyfriendless and jobless would appear fairly bleak if the best resource for advice was through the silver screen. Janet Hanson felt the same way when she decided to create 85 broads, a “network of trailblazing, visionary women who aspire to use their talent and leadership savvy to affect professional, educational, economic, and cultural change for all women globally.”

Hanson was gainfully employed at Goldman and Sachs on Wall Street as the firm’s first female sales manager and, subsequently, vice president. Deciding to take on the position of take-home mom, Hanson quit after 14 years at the firm and found herself in a “horrible sense of disconnection.” She decided to establish a network for women, utilizing the mantra that “The only way to shatter the so-called glass ceiling is to stand on each other’s shoulders.”

85 broads is composed of women who “are passionate about using their intellectual capital to effect change globally.” Although the network was originally made up of current and former Goldman Sachs women professionals, it is now open to women students and alumnae of American universities. 85 broads has implemented mentoring initiatives with these campuses to provide young women with financial and career advice.

If you are a young woman juggling the demands of both career/financial decisions and domestic concerns , remember that there is such a thing as a work/life balance. Don't forget your own goals or dreams, and find ways to protect yourself financially if you are sharing a financial life with a partner. Visit the WISER website to find fact sheets that can offer you insight on managing your financial responsibilities in a way that will allow you to avoid depending on your partner. To learn more about 85 broads, you can visit www.85broads.com

What's Ahead: WISER Celebrates National Family Caregivers Month!

2008-10-08T12:54:00.005-04:00

The Women’s Institute for a Secure Retirement, along with numerous national organizations, major corporations and community-based groups around the country, will celebrate National Family Caregivers Month (NFC Month) in November to thank and support our nation’s family caregivers.

According to the National Family Caregivers Association (NFCA), in any given year over 50 million people provide some level of caregiving services. Those services are valued at more than $306 billion dollars a year. Family caregivers provide more than 80% of all home care services. Of today’s family caregivers, 40% provide some level of nursing support. American businesses can lose as much as $34 billion each year due to employees’ need to care for loved ones 50 years of age or older.

WISER works to provide low and moderate income women (aged 18 to 65) with basic financial information aimed at helping them take financial control over their lives. Millions of women face difficult decisions every day while juggling jobs and caregiving responsibilities: 61% of family caregivers are women. WISER’s commitment to supporting family caregivers led to the publication of “Financial Steps for Caregivers: What You Need to Know About Money and Retirement,” a retirement and financial planning guide developed to specifically address the needs of family caregivers.

NFC Month is organized each year by the National Family Caregivers Association, a grass roots organization whose mission is to improve the overall quality of life of family caregivers and their loved ones. "This year we are encouraging people to speak up during NFC month." said Suzanne Mintz, NFCA president and co-founder. "One of the most important attributes on being an advocate for your loved one is the willingness and the ability to speak up and keep your eye on the ultimate goal: protecting not only the health and safety of your loved ones by for yourself as well."

To learn more about WISER or NFC Month, contact WISER at info@wiserwomen.org or visit our website at www.wiserwomen.org. Call NFCA at (800) 896-3650 or visit www.thefamilycaregiver.org.

Student Loan Management: The Freshman $15,000 +

2008-10-07T13:42:00.004-04:00

College students can agree on a number of negative aspects of university life. Students may complain about the inordinate amount of school work they face, threatening the time usually devoted to such crucial activities as playing video games, going out and facebook “research.” Other top concerns may include the pesky weight gain associated with 2 am pizza runs and the crippling inability to do one’s own laundry.

These concerns, however, appear insignificant when compared to more serious financial issues that attending college may raise. In a time when tuition rates have risen 35% in the past five years, many students and their families find that they have drained their college savings (if they had any to begin with) and must rely on seeking an alternative method of payment: the student loan.

According to the 2003-2004 National Postsecondary Student Aid Study (NPSAS), two thirds of 4-year undergraduate students will graduate with some debt with an average of $19, 237. If one decides to attend graduate or professional school, the additional debt can range between $27,000 to $114,000. For a recent graduate entering the workforce, the payments on such balances can seem daunting.

Fortunately, there are some ways to ensure that you are choosing the smartest route when financing your education. The following tips can help you become more knowledgeable about student loans and best practices:

1) Fill out the FAFSA: The Free Application for Federal Student Aid Form (FAFSA), is instrumental in figuring out whether you and your family qualify for financial assistance. Using financial information regarding a student and his/her family, this document determines the expected contribution of a family and whether or not they qualify for federal assistance. Many colleges also use the FAFSA to determine any non-federal aid they may award a student.

2) Opt for Federal first: Acquiring federal loans may be your best bet loan-wise. Interest rates do not change and are not affected by your credit score. They also come with guaranteed borrower protections that can assist you during unemployment or financial strife. With Perkins and Subsidized Stafford loans, the governments pays your interest while you’re in school. Perkins loans offer interest rates at 5% (fixed) and Subsidized Stafford loans offer interest rates at no more than 6.8%. Unsubsidized Stafford loans are another option that do not cover your interest while you attend school, but do retain federal borrower protections and a fixed rate of no more than 6.8%.

3) Shop around for private lenders: If your family’s contribution and any federal aid fail to make the cut when paying for tuition, you may have to use private loans to cover the rest of the cost. According to Lynnette Khalfani, personal finance expert, it is imperative for students and their families to search for lenders that offer few or no loan origination fees and lower interest rates. To assist you in this process, you can visit such websites as the Student Loan Borrower Assistance Project run by the National Consumer Law Center at www.studentloanborrowerassistance.org.

Debt Warning Signs: How to Spot Debt and What to Do About It

2008-10-06T10:22:00.005-04:00

If more than one or two of these warning signs describe you, you may have too much debt:

I'm not sure how much I owe.
I can only pay the minimum amounts due on my credit cards and other bills each month.
The total amount of money I owe isn't getting any smaller.
I often pay my bills late.
I am borrowing from one credit card to pay another credit card.
I put off going to the doctor or dentist because I cannot afford it now.
I spend more than I earn.
I would have financial problems right away if I lost my job or missed a paycheck.

There are plenty of things you can do to start reducing your debt. Living in debt doesn't have to be permanent, but you will need a plan to tackle your payments:

Get help from a nonprofit financial counseling agency: Check to see if your local state university (Extension Service) offers a free debt management service. They can help you set up a repayment plan and write to your creditors.
Cut way back on your credit card use: Leave your card at home. Don't use it to pay for extras that you can't afford.
Get help from a non-profit financial counseling agency: Check to see if your local state university has a free debt management service. They can help you set up a repayment plan and write to your creditors.
Try one-on-one credit counseling: Contact the National Foundation for Consumer Credit online at www.nfcc.org or by phone at 800-388-2227.

How do I improve my poor credit history?

Look at how much you owe.
Prepare a realistic budget. See how much you can pay off each month.
Contact the companies you owe money to and work out a payment schedule.
Consider using savings, selling assets or getting another job, at least for a while.
Consider getting a secured credit card to rebuild your credit, but be sure you understand what will happen if you cannot make those payments.
Be sure to take the steps listed to maintaining good credit.

Building A Credit History Responsibly & Avoiding Plastic Debt

2008-10-01T10:51:00.000-04:00

College is a time for revelations. Some will choose political affiliations, others will fall in love and most will learn rather quickly that registering for classes before noon is a recipe for disaster. As these young men and women embark on their post-secondary years, there is one realization that trumps all others: They are broke.

Sure, you have a meal plan furnished by your parents, but you soon realize that it’s not so easy to finance late nights out and “accidental” shopping sprees. Unfortunately for most college students, the solution to this problem does not lie in acquiring part-time employment or even cutting back on the extra expenditures. In reality, the modern solution has become the credit card, leading many young people today into premature debt and financial chaos.

According to Jim Pavia, editor of InvestmentNews, “Studies show that college students seem to be living in some sort of suspended reality or state of denial about their financial circumstances.” If you combine this notion with the marketing tactics employed by credit card companies, you reach a pretty scary conclusion: a college freshman is offered eight credit cards in his or her first semester and at graduation time will have an average of 6 credit cards.

Many financial professionals cite a vicious cycle in which students max out multiple credit cards, often with “expenses that are unrelated to education.” These expenses add up and the figures show it: 25% of college students graduate with over $5,000 in credit card debt. According to Anna Maria Andriotis of the Wall Street Journal, all it takes is “one reckless night of spending and one late payment [to] leave students with overwhelming debt and a damaged credit score – which could hurt their chances of landing a job or an apartment after college.”

It is apparent that college students are not using credit wisely, but that is not to say that they should not be using credit at all. When graduating, a sound credit history will be required when leasing an apartment or buying a car. As with most things, the key is to practice responsible money management. Here are some tips that may help you avoid damaging your future financial prospects:

1. Go Without the Free Swag: Many credit card companies offer gifts or special offers in hopes that you will sign up for a card. According to a survey by TrueCredit.com, this often works: 4 out of 10 consumers sign up for a credit card to receive a free gift or special offer. When thinking about signing up for a card, visit websites such as CreditCards.com to compare offers. That free I-Pod will not do you much good when you find yourself struggling with debt on an entry-level salary.

2. Watch Your Credit Limit: Most credit card companies will afford you a limit between $500 and $2000. According to Steven Katz, Director of Consumer Education at TrueCredit.com, maintaining a balance that is less than half of your available credit should help you preserve a solid credit score. While it is preferable that you pay your bill in full each month, you should at least adhere to this rule of thumb.

3. Beware of penalties: Perhaps the easiest way to get sucked into the cycle of credit card debt is the penalties that are written in the fine print of your credit card contract. Late payments can cause your interest rate to increase dramatically. Some credit card companies even practice “universal default.” The inclusion of this clause in your contract allows your creditor to penalize you for any late payments made on cards that you have with other lenders. For these reasons, it is absolutely imperative that you read the fine print and also avoid making late payments.

4. Be Smart: The above tips are specific ways in which you can guard against credit card woes. However, it is ultimately up to you to practice responsible behavior. College is an exciting time and many young people make impulsive decisions regardless of the financial implications. Having fun is important, but in moderation. Enjoy the last years of your youth but take care to safeguard your credit history for the future

How to Start Saving

2008-09-29T10:49:00.013-04:00

No matter how much debt you're in, no matter how old you are, no matter what's happening this week on Wall Street, it's never too late to start funding your future by creating a savings plan. It's easy to put off saving for the future because of current bills and expenses. But don't let your current financial situation stop you from setting savings goals: close your eyes, hold your nose, and put that money aside for yourself.

Understand where your money is going now: Write down everything you spend money on for a few months. You may think about carrying a small notebook to record cash purchases and an envelope for credit and debit card receipts. Cellphones also often have a "Notes" function where you can record recent purchases. Put all of your spending information together on WISER's Budget Sheet to find out what your expenses are for an average month. By tracking your spending, you can look for ways to reduce your expenses and relocate that money into savings.

Make a plan to save a certain amount each month: Plan to put a certain amount of money or percentage of your income into savings every month. Set savings goals and make sure to stick to your plan. Once you start saving and stick to it, you won't even miss that money.

Reduce your credit card debt: Monthly credit card bills can tie up money that you could be saving. The Institute of Consumer Financial Education can help you find ways to lower your debt. If you want to continue using a credit card, but you're tired of high interest rates, visit http://www.blogger.com/www.cardweb.com for information on how to find the best low-interest credit cards.

Wall Street Financial Crisis Raises Issue of Families Living in Poverty

2008-09-26T14:42:00.002-04:00

In the wake of the financial crisis on Wall Street, The United States Joint Economic Committee held a congressional hearing on Thursday, September 24 entitled, “Leave No Family Behind: How Can We Reduce the Rising Number of American Families Living in Poverty?” Headed by Chairman Senator Charles Schumer and Vice-Chair, Representative Carolyn Maloney, the hearing featured a number of poverty expert panelists who offered insight on the current state of poverty and how to deal with the rising number of families in poverty.

The most recent statistical figures on poverty show that the rate rose 12.5% in 2007. According to panelist John W. Edwards, Jr., Chairman of the Community Action Partnership, Inc., this increase has been marked by a rise in the number of married couples who are in poverty. As a result of the increasing poverty rates, $679 billion will be spent on means-tested welfare programs in fiscal year 2008. These programs provide cash, food, housing and free or subsidized medical care. Panelists cited the outdated poverty measure as a cause for concern; the measure is still based on the average amount a family spent on food in the 1950s.

As the country confronts severe economic upheaval, many Americans will be affected adversely. According to Senator Schumer, “recessions hit the ordinary working Americans of Main Street the hardest.” The situation on Wall Street will very likely serve as a catalyst for pulling many families into poverty because of job loss, salary loss and benefit loss.

Though policy makers in Washington are currently pushing for legislation to reform systems which seem to lack in effectiveness, you and your family should take great care to reduce the impact of financial crises by making smart financial decisions. Visit the WISER website for a variety of tips and suggestions on smart money management.

Young Woman's Financial Planning Guide

2008-09-23T13:07:00.005-04:00

Marriage & Money: Joining Assets the Smart Way

You’ve imagined the scene before. Your partner has finally mustered the courage to pop that proverbial question. There are tears, you say yes, the ring is perfect. Pretty soon, your life is a chaotic flurry of decisions: Canapes or mushroom caps? Mauve or lilac taffeta bridesmaid dresses? Hawaii or Florence?

Getting hitched is certainly an exhilarating time in a young woman’s life, but important concerns often get lost amidst the amorous atmosphere. Marriage is a serious commitment and, as such, should be approached responsibly. Specifically, you and your spouse-to-be should think about the financial implications of the consolidation of your lives.

According to Betsey Stevenson, assistant professor of business and public policy at the University of Pennsylvania’s Wharton School, “A lot of the debates people have about money are code for how we want to live our lives.” If you and your mate seem like financial opposites, don’t fret just yet. Making use of the tips below may help you bring about a more compatible financial relationship:

Make expectations clear: There are many financial concerns to be considered when starting a family. Private or public school for the kids? A life of thrift or a life of extravagance? When expectations are made explicit from the beginning, you and your husband can keep financial skirmishes to a minimum. According to Karen Altfest of the New York firm L.J. Altfest & Company, weekly meetings to discuss finances will help a couple stay “in sync with each other’s goals.”

Forge a financial partnership: You and your significant other may benefit from constructing a budget and keeping track of your finances together. Decision making in respect to these aspects should also be done together so as to avoid rifts down the road. According to Mary Ann Sisco, national wealth adviser at JPMorgan’s private wealth management division, “When [you] are making the decisions together, [you] really have ownership of those decisions and any results of those decisions.” So, even if the choices you make together turn out less than favorably, neither spouse will be able to play the blame game.

Decide on long-term financial goals: Though such issues as retirement and paying tuition may seem like distant notions in the eyes of newlyweds, getting a jump start in respect to these matters is a very financially sound decision. You and your spouse may want to set specific goals (e.g. saving up for the cost of private college tuition for two children) and start investing now in order to ensure maximum growth over time.

Visit the WISER website and explore such fact sheets as 5 Money Mistakes Women in Couples Should Avoid to learn more.

Retirement Calculators: Predicting Your Future Income

2008-09-22T11:05:00.003-04:00

Social Security Administration (SSA) Benefits Calculators: The SSA has four online benefits calculators-- Quick, Online, Windfall Elimination and Detailed--which are available to help you understand and predict your future Social Security benefits.

SSA Retirement Estimator: The Retirement Estimator allows you to factor in "what if" scenarios regarding future earnings and retirement dates. It provides you with an estimate of your retirement benefits that resembles the estimate on your annual Social Security statement.

myPlan Snapshot: Fidelity Investments offers a free calculator called myPlan Snapshot, which predicts future retirement income based on your answers to a few questions regarding your current savings and investments.

T. Rowe Price Retirement Income Calculator: This calculator is a useful tool in predicting how much-- and how fast-- you will be able to draw down on your retirement savings once you actually retire. Using what is known as the Monte Carlo Simulation method, T. Rowe provides a more realistic assessment by accounting for 500 various, fluctuating market returns, instead of one average rate of return over a period of time.

CNN Money Retirement Calculator: This basic calculator asks you a few questions about your age, savings and retirement plans. It provides you with an estimate of how large your nest egg will be and how likely you are to create it.

WISER also has an excellent retirement income calculator, along with several tips and resources to help you estimate your future retirement income. For more information, visit the WISER Women Retirement Income Calculator.

Young Woman's Financial Planning Guide

2008-09-16T11:38:00.012-04:00

Take Advantage of Your Employer's Pension Plan

There seems to be a number of things to consider when entering the workforce. Like what is business casual anyway? Who has all this money to go out to lunch every day? What exactly is it that my employer does?

Surprisingly, these issues pale in comparison to some of the bigger concerns you'll be facing as a newly minted member of the workforce. In an age of increasing financial instability, it is important for Generations X and Y to take charge when it comes to their retirement futures. By taking advantage of the pension plans offered by your employer, you can take steps towards securing financial stability.

According to a 2006 survey by Hewitt Associates, only 31% of workers ages 18-25 who are eligible for a 401 (k) plan participate, compared to 64% of workers ages 26-41 and 72% of baby boomers. Many of these young workers reason that they can start saving later, but acquiring savings takes time. Below are some basic facts about pension plans that will help you better understand how they work and why they are important.

There are two basic kinds of employer-sponsored pension plans:

1) Defined Benefit: In a defined benefit pension plan, your employer invests money and pays you at retirement. In private company DB plans, the employer will often fund the plan and make investment decisions. The benefits you accrue will be based on your years of service as well as your highest average pay. Most employers require that you stay at least five years to be vested, so this plan is valuable to employees who stay a long time with their employer.

2) Defined Contribution: The defined contribution plan, such as the 401 (k) plan, is one in which you decide to have money taken out of your paycheck to invest in a retirement savings account. Some employers will contribute or match a portion of your monthly contribution. Unlike the defined benefit plan, you will choose your investment options so make sure to choose sound investments when utilizing this plan. The amount you choose per month is taken out of your pay before income taxes are deducted (the overall amount in your account also grows tax-deferred). An employee will usually have to stay 3-6 years in order to vest in the employer’s contributions (your contributions are yours to take with you when you leave a job).

An important consideration to make when thinking about pensions is the tendency of today’s young workers to switch jobs. According to Scott David, president of retirement services for Fidelity Investments, “the typical Gen X or Gen Y will work for seven different employers across their careers.” Although advancing one’s career or changing its course is not necessarily a bad thing, the following tips can help you responsibly maneuver such changes:

1) Wait until you are vested (5 years in defined benefit plans and 3-6 in defined contribution plans) to leave a job.

2) Compare the value of benefits between jobs. A substantial pay increase does not always offset the value of pension growth you stand to lose.

3) Avoid cashing in on your 401 (k) accounts. Though it may be tempting to use this money for a down payment or to pay off a credit card, think wisely about how this will affect your financial future.

National Life Insurance Month: Are You Covered?

2008-09-15T13:44:00.009-04:00

Donnie Walhberg is spending some time away from his duties as frontman of the newly reunited New Kids on the Block to act as the spokesman for National Life Insurance Month. Wahlberg became aware of the importance of life insurance after he lost his sister, Debbie, when she was just 44. Debbie left behind a sixteen year old son and no life insurance. Wahlberg's nephew was lucky to have a family that was able to provide him with emotional and financial support following his mother's death. But many in a similar situation would face unwanted financial vulnerability at a time when economic stability is probably the last thing on their minds.

"She was a young woman with her whole life ahead of her, but like so many people, she didn't think about the 'what ifs,'" Wahlberg says in an interview with IFAwebnews.com. Unfortunately, many women choose not to address the "what ifs" in their financial planning. According to Life and Health Insurance Foundation for Education, only 59% of women have life insurance, compared to 64% of men. Women also tend to be under-insured when it comes to their life insurance: the Life and Health Insurance Marketing Research Association (LIMRA) says men carry an average death benefit of $143,100 while women carry an average death benefit of
$76,000.

Each wage earning spouse should buy enough life insurance in their working years to cover all of the couple’s joint debts, like mortgages and student loans, plus 20 percent. The extra 20 percent is a precaution in case there isn’t an opportunity for employment or benefits to begin after a partner’s death. Often, people will work with a reputable insurance agent to find homeowner’s insurance, life insurance and long-term care insurance. Talk to several agents before choosing one, and ask friends and family members for recommendations. Your state Insurance Commissioner will also have resources and a list of companies to contact. Check out the possibility of reduced rates for umbrella policies—such as policies that cover your home and car both.

Want to find out more about how to keep yourself covered? Check out WISER's Special Report: The WISER Woman's Guide to Insurance. For more information on National Life Insurance Month, visit the LIFE website.

Additional Resources: "All women-- especially mothers--need to have life insurance" by Susan Elliot, Denver Business Journal, "Donnie Wahlberg, industry to promote September as Life Insurance Awareness Month" from IFAwebnews.com.

Financial News You Can Use: The Healthcare Edition

2008-09-11T11:45:00.000-04:00

Beware ignoring Medicare enrollment rules, InvestmentNews.com August 21, 2008: Financial advisors and future Medicare recipients, listen up: pay attention to Medicare enrollment deadlines, or you may face some costly consequences. Medicare only notifies potential-beneficiaries that they are eligible for Medicare if the beneficiaries apply for Social Security benefits before they turn 65. If you don't fall under this category, you must apply during one of three enrollment periods. Missing a deadline can result in higher Part B premiums or lapses in insurance coverage. Review your health insurance annually and start planning for Medicare at least six months before your turn 65. Visit Medicare.gov for more information on Medicare and Medicare enrollment periods.

Economic downturn not affecting individual policies coverage, but curbing medical care, from IFAwebnews.com August 19, 2008:
The National Association of Insurance Commissioners have released a national survey that shows "22% of U.S. consumers have reduced the number of times they see the doctor as a result of problems in the economy" while "11% of consumers have cut back the number of prescription drugs they take." Though cutting back on doctors visits and prescriptions may seem cost-effective now, these cost-cutting strategies can raise your insurance costs in the long run by putting you at risk for untreated health issues. Make your health a priority and use a budget to curb your spending in other areas of your life. For help on starting a budget, check out WISER's "Keep Track of Your Spending" fact sheet.

Uninsured to Spend $30 Billion, Study Says, from Wall Street Journal, August 25, 2008: A new study from George Mason and the Urban Institute reports that uninsured American will spend $30 billion out of pocket this year. Uninsured Americans often pay more and receive less care. If you're experiencing a lack of coverage, explore your options to find a solution to your coverage gap. The WISER Woman blog series "Healthier and WISER"offers information on healthcare options for stages in your life when you may be uninsured.

Healthier and Wiser: After Retirement

2008-09-10T09:34:00.000-04:00

Healthier and Wiser

Many people who have health insurance obtain it through an employer. However, there may be times in your life when you are without coverage, facing coverage choices or grappling with retirement health issues. The "Healthier and Wiser" series will address some of the main health care coverage issues women encounter at different stages of their lives. It will point you in the direction of where to go to find more information. It is not intended as legal advice. You can check out the "Healthier and Wiser" series on Wednesdays.

This Week: After Retirement

If you are enrolled in Medicare and cannot afford to pay the out-of-pocket costs Medicare does not cover, is there any other assistance for you?

There are state programs for individuals with incomes below or near federal poverty limits. For those at or below the poverty level, with limited resources, the Qualified Medicare Beneficiary Program (QMB) will pay your premiums, deductibles and co-payments under Medicare. The Specified Low-Income Medicare Beneficiary Program (SLMB) and the Qualified Individual Program (QI) pay Medicare Part B premiums for those with incomes between 120% and 135% of the federal poverty level. Call your state Medicaid office and ask if you are eligible. The programs can save you hundreds, or even thousands, of dollars each year.

You might benefit from a Medigap insurance policy - a private insurance policy that pays out-of-pocket medical costs not covered by Medicare. Contact Medicare for more information on Medigap insurance policies sold in your state or call your state insurance commissioner. Every state offers free insurance counseling to seniors through a program called the SHIP program. Call Medicare at 1-800-Medicare for the nearest SHIP site.

The National Council on the Aging has an interactive website program, called Benefits Check-Up, that will point you toward an array of state and private programs that can help you with medical costs. Find it on the web at www.benefitscheckup.org.

The Young Woman's Financial Planning Guide: Part 4

2008-09-09T13:37:00.002-04:00

The Urban Girl on a Budget: Why Shoes are Not a Sound Investment

When the HBO series “Sex and the City” debuted, it became wildly popular amongst young women. Witty and relatable, the show offers beautiful clothing, romance and the allure of the urban lifestyle. And yet, the show lacks in one crucial respect: reality. Though watching Carrie traipse through the city in high-end couture may be a glamorous scene to behold, chances are that a columnist at a modest publication would not be able to afford such extravagances.

If you're a young woman who craves a metropolitan lifestyle, err on the side of thrift. Here are a few tips for staying fabulous while being frugal:

1) Responsible Money Management: According to the JumpStart Coalition for Personal Financial Literacy, “many young people fail in the management of their first consumer credit experience [and] establish bad financial management habits.” Such resources as “The Teen Girl’s Gotta-Have-It Guide to Money” by Jessica Blatt can help guide you in constructing a monthly money plan to track your finances. You can also visit WISER's website for fact sheets on how to start saving. Such tools can be instrumental in teaching you responsible budgeting that will help you avoid high-risk financial situations and start investing in your future.

2) Leave the credit card at home! In one particular episode of “Sex and the City” we watch Carrie realize that, despite amassing $40,000 in Manolo Blahniks, she has no assets or savings to assist her in placing a down payment on her apartment. In order to avoid this, be careful with your credit. According to a study by Qvisory, three out of four Americans under 35 are in as much or more credit-card debt this year as last and only half are making their minimum monthly payments. So before you splurge on those gorgeous shoes , think about how it may affect your future livelihood.

3) Be Smart About Housing: Metropolitan areas are infamous for their high housing costs. According to the Fiscal Policy Institute, New York City housing costs have jumped 106.4% since 1987 and a two bedroom can run for nearly $2500 per month. Try to find an apartment yourself, without the help of a broker. For some this may seem like a convenient service, but brokers in major cities may charge clients the equivalent of one month's rent to help them find an apartment. When you're searching, think about living with a roommate, which can slash your monthly rent in half. But make sure that you both are able to pay your rent on time every month. Carrie may have been able to enjoy the solitude of her own place in TV-land, but real life requires smarter choices.

Free Credit Reports: More Than a Catchy Jingle

2008-09-08T11:10:00.005-04:00

If you've turned on your television recently, you've probably encountered commercials featuring the musical stylings of a certain free credit report website's spokesman. The songs pitch a seemingly great deal---free, personalized credit reports, just a click away! Though these dittys may be alarmingly infectious, their pitch raises some questions. Like what is a credit report? What do the numbers mean? What do they usually cost?

What is in a Credit Report?
A credit report includes the following:

All of the times you have borrowed money, the date, the credit limit and a history of how you have paid the money back
A list of late payments that were 30, 60, 90 or 120 plus days late
Any bankruptcies and tax liens,
Each time that a creditor or potential lender has made an inquiry about you when the lender was deciding whether to give you credit, and
Overdue payments that have been referred to a collection agency.

Bankruptcy stays on your credit history for 10 years and other negative information remains on your credit history for seven years. Credit inquiries stay on your credit history for two years.

What is a Credit Score?
A credit score uses a number between 300 and 850 to inform creditors and lenders of how reliable you are when it comes to paying off your debts based on the information from your credit report.

How can I get a free credit report?
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.

You can also get a copy of your report for free anytime if:

You have been denied credit for any reason and a credit report was used in making the decision. You have 60 days to mail proof of rejection to the reporting credit bureau;
You are unemployed, actively seeking employment, or if an employer or potential employer has requested a credit report;
You are receiving public welfare assistance; or
You believe your credit report has been used to perpetrate a fraud.

A poor credit record can affect your ability to borrow money to pay for a car or an education, rent an apartment, buy a house or even get a job. Check your credit report once a year for errors or problems and write to the credit agencies to fix the errors or to insert a statement of explanation.

Happy 401(k) Day!

2008-09-04T14:21:00.011-04:00

Now that Labor Day has come and gone, it's time for another holiday that recognizes workers: 401(k) Day. Though this holiday may not provide a day off or a reason to fire up the grill, it is a time to reflect on your 401(k) status. Do you have a 401(k)? If not, how can you get one? If you have one, you may still have some questions about how it works. Here are a few Q's and A's on 401(k)s to start off your 401(k) day celebration!

Q: What is a 401K?
A: A 401(k), a type of defined contribution plan, is a savings arrangement through which you can set aside money for retirement. If you work for a tax-exempt organization, you are eligible for a 403(b) instead, which works in the same ways as a 401(k). The money you contribute to a 401(k) is taken from your paycheck before taxes. You choose how to invest it and you are only taxed if you withdraw money. You can withdraw money without a penalty at the age of 59 and a half.

Q: How do I become a member of the retirement plan at my job?
A: Talk to your employer or Human Resources director about how to join the retirement plan at your job. By law, your employer decides who is covered by the plan. If you are a part-time or contract worker, you may not be eligible to join the 401(k) program at your job.

Q: Can I withdraw money from my account while I am still working?
A: Yes. According to the September 2008 Kiplinger Retirement Report, "88% of plans in 2006 allowed participants to take loans...Under IRS rules, the loan amount generally must be less than 50% of the account balance." If your plan does not have a loan provision, you may be able to qualify for a severe financial hardship withdrawal. According to the IRS a hardship withdrawal includes the following:

College tuition for you or your dependents
A down payment on a primary residence
Non-reimbursed medical expenses
Preventing eviction or foreclosure from your home

Check your plan document and consult your Human Resources director. But remember: if you choose to withdraw from your 401(k), you may face penalties and you will lose compounded growth on the money you borrowed, which will reduce your overall retirement savings. Make sure you are aware of the borrowing rules associated with your 401(k) and create a personal plan to repay your 401(k) loan to avoid taxes and fees.

Q: Can I stop contributing if I feel I can't afford to?

A:Most plans allow you to stop contributing at any time though employers are not required by law to do so. Some plans may require specific percentage contribution for a full plan year so be sure to check your plan rules.

Q:What happens to my 401(k) account balances if I choose to leave or am fired from the company?
A:First, remember that it usually takes five years to “vest” in the money contributed by your employer. So don’t lose out by leaving your job too soon! Your options are the same whether you voluntarily leave or are terminated. If your account balance is more than $5,000.00, you can leave your money in the plan. To avoid a penalty, your vested account balance can be rolled into another 401(k) plan with your new employer or put into an Individual Retirement Account.

For more information, check out the Retirement Plans section of WISER's website. Some of the questions featured here were adapted from information provided by David Wray, President of the Profit-Sharing Council of America. The Profit Sharing Council of America established and sponsored 401(k) Day. Their website, www.psca.org, as well as their 401(k) day website, www.401kday.org, offers a wealth of information on 401(k)s for every generation.

Successfully Weathering the Storms: How to Prepare Your Family and Your Assets in the Wake of Disasters and Emergencies

2008-09-04T11:35:00.003-04:00

Three years after ravishing the state of New Orleans and the Mississippi gulf coast, the effects of Hurricane Katrina remain fresh in the minds of its victims and the country. In recent weeks, America braced itself for Hurricane Gustav, fearing a similar outcome. The diminished impact of Gustav is at least partially attributable to heightened preparedness. Just as the state of Louisiana and the federal government sought to practice responsible preparedness, you too can employ smart decision-making in order to properly prepare for unexpected disasters and emergencies.

Disaster often strikes without warning, leaving those who are ill-prepared in precarious situations. In order to avoid this, here are a few steps to secure your home and assets:

1) Know the particulars of your insurance policy: Go through your policy and find out the specific disasters that it does and does not cover. Typically, home insurance does not cover flood damages. Visit FloodSmart.gov to learn more about flood insurance.

2) Create a home inventory: In order to file an insurance claim following a disaster, you will need to provide a list of what has been lost or destroyed. Visit knowyourstuff.org to download a free software program that organizes valuables and documents digitally. Try to keep important records such as birth certificates and Social Security cards in a safety deposit box outside of the home.

3) Know your benefits and who to call when disaster strikes: It is important to know what emergency and employee-sponsored benefits you and your family may qualify for in the case of an emergency. You may be eligible for temporary housing, funds and food assistance through both FEMA and the USDA. The IRS also offers tax relief and other benefits for disaster victims. Call the IRS helpline at 1-877-829-5500 to find out what you may qualify for.

4) Regain financial health: In order to diminish the uncovered costs of disasters, you can turn to various institutions for assistance. The Pensions Benefits Guaranty Corporation is a federal corporation that pays out benefits under certain pensions and can be contacted at 1-800-400-7242. Some 401 (k) plans also have allowances for early withdrawals during emergencies. Contact your sponsor to find out these details.

Generation Debt: Financial Planning for the X and Y Set

2008-09-03T16:42:00.003-04:00

They call them generations X and Y.

Their shared history has been told and retold through various VH1 specials. They're different, of course: different time periods, different unfortunate childhood fashions, different classic sitcoms. But even though these two generations differ dramatically in age, they have a few similarities. They witnessed and embraced the rise of technology. They said yes to cynicism (they made "Reality Bites" and Daria popular) and no to clear Pepsi. And in the process of shifting from adolescence to adulthood, they accumulated a lot of debt. So much debt that when you combine the two, X and Y may as well be renamed: Generation Debt.

According to a recent article from Investment News magazine, "three quarters (of Americans under 35) owe as much or more than last year." The article refers to a new study by Qvisory which surveyed Americans under 35 on their financial status. The survey found that those under 35 were struggling with a myriad of financial issues including debt, medical costs and an inability to pay beyond the monthly minimum payments. Because of their financial concerns in other areas, only "33% said they have a retirement plan."

Generation Debt is in need of a plan. Greg Salsbury, executive president at Jackson National Life Distributors LLC of Denver, says "(Generation X and Generation Y) will need to save more money than other generations did." Unlike previous generations, Generation Debt most likely will not receive the extensive Social Security coverage their grandparents generation enjoyed. In a different Investment News article, Lisa Shidler says that "67% of (young workers) said that they had less than $20,000 in retirement savings." With present debt mounting and no retirement plan in site, what are Gen-Xers and Gen-Yers supposed to do?

Investment News recommends that young adults seek assistance from a financial planner. If you are a part of Generation Debt, or you’re just looking for some assistance with your finances, WISER has some tips to help you choose a financial planner:

Read the financial section of the newspaper, look over the ads and call three local investment firms and ask them to send you materials. After reviewing the materials, set-up interviews with financial planners at a few investment firms.
Interview two or three different financial advisers. Make a list of questions about whatever you are interested in or do not understand in preparation for your meetings. Ask as many questions as you need.
Beware of someone who promises too much. Find an advisor who will help you develop realistic measurements of success, and who will explain what he or she is recommending and why.
Look for a financial planner who talks with you about risks, and what you are or are not comfortable with. You want to find someone who listens to you and understands you.
Ask the advisor how the services he or she provides are paid for and how fees are calculated.
Find an advisor who will design a realistic and well-diversified investment program for you

References: "Americans Under 35 Piling Up Debts" from InvestmentNews.com, "Younger Americans Not Saving Enough for Retirement" from InvestmentNews.com.

Bridging the Confidence Gap

2008-09-02T11:24:00.000-04:00

"And if Prince Charming does come along, he may have his own financial challenges. Heck, his horse is likely to be leased." -Michelle Singletary, Washington Post

A new study by The Hartford Financial Services Group and MIT AgeLab called "Why Women Worry" found that women are more worried about inflation, health and outliving money than men. Considering that, in comparison to men, women make less money, live longer, and are more likely to take on caregiving roles, it is not surprising that women worry more about their financial futures, especially given today's economy. A poll by the National Women's Law Center that was mentioned in "The Color of Money," a recent Washington Post article, draws a similar conclusion: women are more likely than men to feel that they are falling behind economically. The article also brings up an interesting point based on a recent Prudential Financial study- that women lack confidence when it comes to handling finances. We spend a lot of time talking about the wage gap, but what steps do we take to close what Prudential Financial calls "the confidence gap"?

Remember the song "If I had a Million Dollars?" Well, if I could rewrite the song, I might change the lyrics to "If I had a million dollars, I would buy you long-term health care insurance, pay for your education, open an IRA, maybe even hire a financial planner." Yes, I would like an exotic pet (like a llama or an emu) and a tree fort with a refrigerator. But like most women, I'd rather be financially secure and worry free.

Healthier and Wiser: You and Your Family

2008-08-27T12:08:00.005-04:00

Healthier and Wiser

1. What are your rights to health care coverage through your husband’s job if you and your husband separate or divorce? If your husband dies? What are your children’s or step-children’s rights in these cases?

In general, a divorce or the death of the spouse with the plan qualifies you under COBRA to remain covered under the plan for up to 36 months, but your own circumstances could lengthen or shorten this period. Children covered under the plan may be able to retain coverage even longer in the event of a divorce. If you are getting a divorce or need to enforce child support, you should also ask your attorney about filing a qualified medical support order (QMSO). A QMSO can be used to require employer-sponsored group health plans to extend health care coverage to the children of a parent/employee who is divorced, separated, or never married when ordered to do so by state authorities.

2. Can you or your family qualify for health care coverage through the military if one of you served and was honorably discharged even though s/he did not serve a full 20-year career?

Depending on your family’s income, you and your family may be eligible for health care coverage through the military, even if the one who served did not serve a full career. You should contact your local Veteran’s Affairs office if you think you might qualify; their phone number and address is in your telephone directory in the federal government section, or go to US Department of Veterans Affairs website to find the office nearest you.

In Memoriam: Stephanie Tubbs Jones

2008-08-26T12:01:00.009-04:00

WISER mourns the recent passing of our dear friend and colleague, Congresswoman Stephanie Tubbs Jones. Jones' was the first African American woman to represent Ohio in Congress. She made a name for herself as an outspoken, passionate politician who frequently advocated for lower and middle income women during her five terms in Congress. This past February, Jones' joined forces with WISER during the release of WISER's publication "The Female Factor 2008: Why Women Are at Greater Financial Risk in Retirement and How Annuities Can Help." Stephanie Tubbs Jones joined fellow congressmen and women as well as WISER president Cindy Hounsell, both pictured left, in calling for public action to mitigate the real risk of poverty that American women face in retirement. She is remembered not only for her political accomplishments, but for her incredible warmth and sense of humor. She will be greatly missed.

Perfumes, Pedicures, Pricey Dinners: Are They in Your Budget?

2008-08-21T09:15:00.000-04:00

“If women put the average amount of money they spent on monthly manicure-pedicures ($50) into an interest-bearing retirement account every year for 10 years, they would have almost $10,000 saved.”

Flipping through any women’s magazine, you are sure to find countless advertisements for make-up, hair products, and expensive perfume that will make him fall for you before you say hello. A glance at the tabloids, a night in front of the television, even an innocent trip to the grocery store can encourage you to indulge in all those little luxuries that make you feel beautiful, whether it’s a manicure, an eyelash curler, new make-up, or that $30 bottle of lotion that promises to make your skin look young forever. The truth is that those advertisements and commercials fail to highlight one very important thing about these products: they cost money, and when you are buying these products that are supposed to make you feel better, look younger, and snag the guy of your dreams, you are spending your hard-earned money that could be used for better purposes, such as….you guessed it, saving for retirement.

According to a YWCA report mentioned in a Los Angeles Times article, Americans spend around $7 billion a year at cosmetics, beauty supply, and perfume stores. Moreover, one of the factoids in the report noted that women on average spend $50 a month on manicures and pedicures. If they put this money into an interest-bearing retirement account every year for 10 years, they would be able to accumulate approximately $10,000. To put this number in perspective, that would almost pay for one year of college at a state university, or one semester at a private university.

This is not to say that you should never get a pedicure again, or that you should stop buying make-up, perfume, soap (if nothing else, please leave soap on your shopping list!). However, budget your money, and keep track of where it goes. Is it typical for you to spend your entire monthly paycheck? Can you save money by eating out less, or forgoing a new pair of shoes? Can you cut expenses by dealing with the mediocre office coffee instead of picking up an extra-large non-fat French vanilla latte? To learn more about budgeting your money and how to save, visit the Saving and Investing portion of WISER’s website. Also, remember two things: you need your money in retirement more than your favorite make-up company needs it now. And the guy of your dreams? He probably can’t tell the difference between an $80 bottle of perfume and a $10 bottle of body spray.