Current Affairs

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Retirement Age Rising

Legendary singer Tony Bennett, who at age 91 still tours and performs for live audiences, has quipped, “It’s too late to retire.” More and more, Americans seem to share Bennett’s sentiment; they are postponing retirement and spending their golden years on the job. Recent studies show the average retirement age rising.

Retirement Age Rising

For men, it is just shy of 65 years, up from 62 in 1985. For women, since 1985, average retirement age has increased from about 60 years to 62. Today, about 20 percent of people 65 or older work at least part-time – the highest rate in 55 years. Among 70- to 74-year-olds, 19 percent work – that’s an 11 percent gain since 1994. The Bureau of Labor Statistics predicts if current trends continue, by 2024 about 36 percent of 65- to 69-year-old American workers will still be in the labor force.

While some older workers who delay retirement do so because they need the money, others continue working because they remain healthy, highly-skilled and happy at their jobs. A recent study by Transamerica found that 44 percent of later-retirees continue to work by choice. In other words, many people are working longer not because they have to, but because they want to.

“By the time you’re in your 60s and 70s, you’ve probably worked yourself into something you enjoy doing,” explains Jacquelyn James, an expert on aging at Boston College.

In addition to improved health and longevity, factors contributing to later retirement include:

  • changes to social security have improved incentives to keep working;
  • fewer workers are covered by traditional pensions;
  • people with more education tend to work longer; and
  • many jobs today are less physically demanding than in the past.

Older workers also tend to thrive in knowledge-based jobs – such as finance, law or business – according to Stanford psychologist Laura Carstensen.

By |October 23rd, 2017|Current Affairs, Retirement|

Bank Account Boosts Financial Literacy

Does your child need a bank account? In a word, yes. Learning to manage money may just give her a global competitive advantage over her peers when she becomes a young adult. A recent study suggests that having a bank account boosts financial literacy in teens. This brief video provides interesting details.

 

 

Video Transcript

Does your child need a bank account? In a word, yes. Learning to manage money may just give her a global competitive advantage over her peers when she becomes a young adult. A recent study suggests that having a bank account boosts financial literacy in teens.

According to results from the Program for International Student Assessment (PISA), one in five U.S. high school students (22 percent) lack basic financial literacy skills. The study evaluates the financial literacy of teens from 15 countries. China ranked number one overall, followed by Belgium and Canada. Chile, Brazil and Peru ranked as the bottom three.

American teenagers have made no appreciable gains in financial literacy in the three years since the previous PISA in 2012, when the U.S. ranked ninth among the countries studied. The Russian Federation and Italy showed measurable gains in average scores over that time, while Poland, the Slovak Republic, Australia and Spain showed measurable declines.

One data point of the study offers a potential bright spot for American parents. Among U.S. students, 53 percent reported that they have a bank account; and students with a bank account scored on average 42 points higher than students without a bank account. This suggests a simple and practical step parents can take to help boost financial literacy in their children, according to Ted Beck, CEO of the National Endowment for Financial Education.

“Get your child involved with a bank or credit union by having an account and learning to manage it during their teenage years,” he suggests. “We shouldn’t assume kids receive this education in schools. We need to step up and involve our children in regular, meaningful interactions with money.”

If you’d like help setting up an account for your child, talk with your personal financial planner or give us a call at Perspective Financial Services.

By |October 9th, 2017|Current Affairs, Video Blog|

Managing Expectations

This month, the U.S. stock market hit an all-time record-high of over 22,000 in the Dow Jones Industrial Average. This rise represents a 20 percent return since November 2016 and a more than 300 percent return since a low of about 6,600 in March 2009. Managing expectations, as an investor during such a strong bull market can be difficult.

Stock market investors have enjoyed a string of steady positive returns for the better part of two years now without any meaningful correction. A meaningful correction would be a pullback in the 8 percent to 10 percent range, which from the current levels would constitute a fall of about 2,000 Dow points. As shocking as that sounds, a correction or pull back of any level would be a natural occurrence in the financial markets.

The reality is financial markets do not usually march straight upward without some type of bump or hiccup that would cause it to drop and pull back for a rest. It’s normal to experience some kind of volatility or downward movement in the course of investing. Likewise, the recent stretch of market appreciation, while welcome, is not typical.

When the inevitable and natural occurrence of a market decline takes place, remember the following things to help you manage expectations through the downturn:

  • Stay diversified. Even if it doesn’t feel right, history shows that this strategy works.
  • Avoid jumping in and out of the market. It is virtually impossible to time the market.
  • Invest regularly. The potential to buy investments at discount prices can only happen if you are involved when things look bleak.
  • Market corrections, no matter how painful, are a natural part of an economic cycle.

Finally, stay in communication with your advisor as changes take place in your life or even if you just want some perspective on market movement. An important role we play in our clients’ lives is managing expectations, or being an “emotional surge protector,” when these unavoidable declines take place.

By |August 28th, 2017|Advisors, Current Affairs, Investing|

Privacy Requires Extra Effort

In this digital age, privacy requires extra effort for each of us.

Hackers use a number of ways to get into electronic devices (laptops, smart phones, tablets). The most common type of cyber crime is the phishing scam, which can arrive in the form of an email or text and contains a link. These messages are often realistic-looking, use fraudulent websites and appear to be sent from a friend or trusted sender (such as a bank or social network), so you’ll feel safe to click on the link. Yet, clicking on these links loads software onto your device, which gives hackers access to install any number of other programs that allow them to spy on you and steal your data.

Installing security software on all your electronic devices is a critical first step in beating cyber crime. In addition, it’s important to understand how phishing scams work and what they look like when they land in your inbox.

Some of the sites spoofed most regularly include PayPal, eBay, Yahoo! and MSN, as well as financial institutions. Any legitimate site can be spoofed; and hackers also create fake websites, emails and text for cartoon gaming, celebrities and other popular children’s sites as a way to get private information. So be sure to educate the children in your life about the risks, as well.

Norton, a leader in antivirus and security software, offers the following information and recommendations:

  • Be wary of emails or texts asking for confidential information – especially information of a financial nature. Legitimate organizations will never request sensitive information via email, and most banks will tell you that they won’t ask for your information unless you’re the one contacting them.
  • Don’t get pressured into providing sensitive information. Phishers like to use scare tactics, and may threaten to disable an account or delay services until you update certain information.
  • Never submit confidential information via forms embedded within email messages. Senders are often able to track all information entered.

The best advice is to always call the vendor or financial institution directly, using a phone number that you have verified, before disclosing any information. You are your best defense against cyber crime.

By |July 17th, 2017|Current Affairs|