Twila VanLeer

Feds Raise Interest Rates, Promise More

June 19, 2018 By Twila VanLeer

The Federal Reserve raised the prime interest rate recently by just a small percentage, but enough to raise expectations that Americans will face higher borrowing costs for homes and other big-ticket items., including credit card costs.

The benchmark rate now stands at 1.75 to 2 percent. It’s the first time the rate has reached that level since 2008, when the economy tanked while the feds were hoping to get rates down to zero.

The recent action indicates the Fed has confidence in the current economy and that it has enough strength to accommodate a slight increase in borrowing costs. The increase is evidence that recovery from the 2008 recession is strong.

The current increase is the second this year and the seventh since the recession.

While announcing the increase, the federal agency also indicated that two other jumps in the prime rate are likely this year.

Working Until 70

June 11, 2018 By Twila VanLeer

Used to be that 65 was the age workers expected to retire. Social Security and Medicare kicked in then and there wasn’t much reason to work beyond that benchmark.

Things have changed. Many employers have stopped offering retirement pensions and tacking on more working years may significantly improve a worker’s income from Social Security. People are living longer and many workers actually want to continue being actively engaged beyond 65.

People who research such things have concluded that working beyond 65 is a good idea for many people.

There are things you need to know when looking at the issue for yourself. One is the RMD – the Required Minimum Distribution that the IRS requires you to draw from a 401(k) or IRA. After the reach 70.5 years of age, the RMD becomes effective. The money you have access to is dubbed “Spend Safely in Retirement Strategy.” While it doesn’t make up for the savings you have failed to accumulate, it helps your overall income picture.

As many as half of all pending retirees benefit from this method of creating a steady income stream.

American workers typically retire at 63 and begin collecting Social Security between ages 62 and 64. For typical retirees, SS payments represent about two-thirds of their retirement income. If they wait until they are 70 to start drawing the federal money, it can represent up to 85 percent of their income.

If working fulltime until 70 isn’t an appealing thought, some people opt for working “just enough” to get them by while postponing their SS payments until they are 70, when SS benefits peak.

Given all these factors, 70 has become the new 65, personal finance experts agree. People today expect more than a subsistence situation when they retire and they can considerably enrich their retirement by waiting.

Statistics show that the number of over-65 workers is increasing. Those working or looking for work represented 10,8 percent of the workforce in 1985. As of March this year, the figure was 19.5 percent. And surveys among workers indicate that the figure will continue to rise.

More New Jobs Than Skilled Workers

June 8, 2018 By Twila VanLeer

With 223,000 new jobs reported in the United States in May, the unemployment rate dived to a new 18-year low of 3.8 percent., the lowest since 1969. But the flip side is a shortage of skilled workers to fill that record number of available jobs.

The number of hires reported for the month was in excess of 200,000, which left some 20,000 jobs unfilled. The good news in the job market shows that the country’s economy is exhibiting plenty of vigor. In many industries, the addition of jobs has been accompanied by rising salaries.

The plentitude of jobs was attributed in large part to the retail marketing industry, which added 31,000 jobs to the total. Health care hirers accounted for 29,000, construction firms added 25,000 workers and manufacturers took on 18,000.

Economists were surprised by the healthy increases in construction and manufacturing, two areas of the economy that have complained most about worker shortages.

Although some job sectors saw improved worker pay, the big raises that were anticipated have not materialized. But wages are rising gradually. Hourly pay rose by 8 cents, to $28.92 an hour, in May, making the 12-month increase 2.7 percent.

The current economic expansion could become the longest ever if the indicators continue to show improvement for another year.

Some companies have offered higher pay and benefits, are providing training and established partnerships with vocational schools to widen the potential employee pool. In some instances, restrictions on felons have been relaxed.

If pay isn’t increasing as much as workers would like, they at least can rejoice in a slow inflation rate. The Fed has not been prone to increase the prime interest rate, which means people wanting to buy a new home or car are not affected by rising commercial interest rates. It is expected now that the Fed will only bump up the rate a small amount this year, unless there is a dramatic upturn in inflation.

The rosy May report is not expected to nosedive when the June figures come out, the gurus are guessing.

Financial Mistakes You Make In Your 20s

June 4, 2018 By Twila VanLeer

Financial Mistakes Made in Your 20s — Trim your expenditures to match the income, being sure to pay yourself with a little savings each pay period

Humans don’t learn all there is to know about personal finances in a day. It’s commonplace for people to learn by their mistakes early in life.

Among the most common financial errors people make in their 20s are:

Ignoring your financial flow.

A first job sometimes is the shocker. You find out after a few paychecks just how much of what you have earned goes into taxes and deductions such as health insurance. If you don’t pay attention, your expectations compared to your realities may get out of sync. Learn from the experts who say, “It’s not what you make, it’s what you keep that counts.” And develop a realistic budget. Trim your expenditures to match the income, being sure to pay yourself with a little savings each pay period.

Letting friends create your financial agenda.

It may be a tough decision, but learn to say no when your friends suggest ways to spend money that you really can’t afford, such as eating out or stopping at the local watering hole for a day’s end refresher. Use public transportation if possible, and brown-bag lunch now and again.

Not realizing that time will cure some financial stresses.

It is likely you will make more in the future, but don’t wait for the future to start serious saving. If your company has a 401(k) option, hop on it. If you can’t take full advantage of the plan to begin with, keep upgrading your contribution as raises come along. It’s the beginning of a trend you should maintain throughout your working career. If you save $200 per month beginning at age 23, with a 6 percent rate of return, you will have $425,000 when you retire at 65. If you wait until you’re 33 to begin, the same savings will only total half that amount.

Work on getting student loans repaid.

Some 2.6 million student loan borrowers in the first quarter of this year opted to pause their monthly payments through forebearance, a government allowance that stops payments, but allows interest to accrue. Make such a move a very last option if you possibly can. Ask your loan servicer first for deferment, but if that can’t be managed, opt for an income-driven repayment plan. If you never get to the point where your payments can be raised, the debt may be forgiven after 20 to 25 years.

Consider more debt for grad school.

Though a higher degree is likely to provide more financial flexibility in the future, additional education should be a carefully planned option. More Americans are getting advanced degrees – about 12 percent of those 25 and older. But it is wise to plan. Go to school part time and take advantage of any tuition assistance your work may provide. Before you sign up for classes, use a student loan calculator to see what debt you will have accumulated in exchange for enhanced earning ability. It may shock you and encourage you to take baby steps toward an advanced degree rather than incur more student debt.

Be Mindful Of Your Tweets

June 1, 2018 By Twila VanLeer

Popular comedienne Roseanne Barr found out the hard way. When she tweeted a message with a definite racial slur recently she ended up out of a job. Her tweet casting aspersions on Valerie Jarrett, a black woman who is a former adviser in the Obama Whitehouse, didn’t set well with Barr’s bosses at ABC Television. Several of them, along with some of her fellow cast members, reacted strongly.

Eleven hours after Barr’s May 29 tweet, Channing Dungey, president of ABC entertainment and a black woman, blasted the tweet as “abhorrent, repugnant and inconsistent with our values and we have decided to cancel her show.”

So what promised to be a highly successful reboot of the long-running “Roseanne” series crashed to a halt. The actress’ talent agency, ICM Partners, also dropped her.

The moral to the story is clear: You tweet, you become a public figure. Your life could blow up in the same way if you are not discreet with the messages you post for public consumption. An egregious comment about another individual, true or not, could put you on the hot seat.

Some media gurus welcomed the quick and decisive response to Barr’s firing. Aram Sinnreich, professor of communications at the American University in Washington, D.C., said the firing is a testament to diversity in the C-suit and the speed with which news travels on social media.

Roseanne has been chided before for racist tweets. What caused the quick and certain reaction this time? The political climate has put people on high alert regarding their employees’ words and behaviors, Sinnreich says. If an individual, especially a well-known individual, becomes in essence the face of a corporation, the corporation should be accountable for the actions of that individual.

Sinnreich noted that some people have become frustrated with the fact that President Trump gets away with racially-tainted and outrageous tweets (he has targeted Mexicans, Haitians and Nigerians in widely reported tweets) without any consequences. Sinnreich is of the opinion that until Trump is held accountable for what amounts to hate speech, others will think they can also go unscathed if they use tweeting as a way of dissing others. The ability to broadcast your ideas to a huge audience is irresistible, he said.

Many of today’s employers are complaining that as much as five hours a day of a worker’s time is spent sharing tweets and other social media.

The number of cases of employees making negative racial statements that raised the ire of their employers has risen. The results, always widely reported in the general media, sometimes rise to the level of the offender being fired. That should be fair warning for careless tweeters.

Tweeters who go beyond the bounds of decency are showing up more frequently in the news. Anthony Weiner, former New York congressman, is now serving a prison sentence for sexting with a minor. He first blamed a hacker for the mess, but later admitted that “These destructive impulses brought great devastation to family and friends and destroyed my life’s dream of public service.”

People are getting fired for posting inappropriate photos or retweeting someone else’s tweets. Immediacy and informality of the social media sites sometimes makes people vulnerable to impulses they might otherwise control. Remember, there’s no going back once you hit “send.”

On the other end of the scale, some employers now encourage their workers to maintain social media activity. Job applications now may ask how many “followers” the prospective employee has on Twitter. But that becomes a double-edged sword when it appears the opinions of the employee, disbursed among many friends, counter the company’s viewpoint.

Concerns about free speech pop up when social media fans defend their right to freely make sexist, homophobic or racist remarks, but Sinnreich is of the opinion that controls on media content are not censorship. “It’s about affiliation and the media role as amplifiers for political ideology.”