It’s Time To Dig Into The Odds & Ends File Again
It’s time to dig deep into the odds and ends file for today’s blog.
Did you have a baby on Oct. 20? Do you know someone who did? That little tyke might have been in this world only a day or so, but can be $500 richer for it, thanks to Voya Financial.
Voya kicked off National Save for Retirement Week by announcing that it would offer a $500 mutual fund investment to every baby born in the U.S. on Oct. 20, 2014, as a head start on their future retirement savings. The campaign, Voya Born to Save, will help support the next generation on its path to retirement readiness. An estimated 10,000 babies are born in the U.S. every day.
That baby will need to hold on to that mutual fund investment and nurture its growth if he or she expects to be able to afford retirement in another 60 years or so. And the little one will have to supplement that nest egg with regular contributions over the years so he doesn’t end up like seniors in nearly all of the 50 states, according to a recent survey.
A new study by Interest.com showed that retirees in every state except Nevada and the District of Columbia have not saved enough to maintain their preretirement lifestyle. In fact, nationwide, residents age 65 and older are living on a median income of $37,847, for a wage replacement ratio of 59.63 percent, according to the study. The bulk of that income is from Social Security, rather than savings. Experts recommend that workers save enough money to have a retirement income of at least 70 percent of their working-days salary.
Baby girls will have to be more diligent about retirement savings than baby boys if they want to wind up equal in the retirement race. Women are more disciplined savers and more likely to put a bigger chunk of their paycheck into savings. But when it comes to the final savings tally, women are falling far behind.
A Vanguard analysis of more than 1 million 401(k) plan participants showed that women are 10 percent more likely than men to enroll in their workplace savings plan and save a bigger chunk of their paychecks. But women have an average balance of $78,000 — far below the male average balance of $121,000.
The wage gap between men and women is partly to blame, according to Vanguard researchers, who noted that the men surveyed earned an average of 40 percent more than the women. Another factor entering into play is that women spend an average of 12 fewer years than men in the workplace. Women are more likely than men to drop out of the workforce to care for children, an ill spouse or aging parents.
And finally, a new twist on the phrase “use it or lose it.”
President Barack Obama said on Friday that his credit card was rejected at a New York restaurant. “It turned out I don’t use it enough so they thought there was some fraud going on,” Obama said at a White House news conference. “Fortunately Michelle had hers.”
The comments followed the signature of an executive order to enhance federal security by adding microchips and PIN numbers to government credit cards and debit cards starting in January.