Week's Winners and Losers: Whole Foods Prices, Kroger Entices

June 26, 2015, 3:11 am

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Filed under: Apple, Apparel, Entertainment Industry, Food & Beverage, Investing

There were plenty of winners and losers this week, with a supermarket store operator delighting the market with a payout hike while another came under fire for potentially overcharging its customers.

Apple (AAPL) -- Winner

It could've been a challenging week for Apple. Taylor Swift had announced that she was pulling her wildly popular "1989" album from the upcoming Apple Music service. Swift argued -- just as many less famous artists have contested -- that Apple's policy not to pay royalties for subscribers during the generous three-month free trial is wrong: It puts the burden of Apple Music's acquisition costs on the artists when it should be on the consumer tech giant itself.

Apple agreed. It reversed its decision, agreeing to pay music royalties during the free trials. Swift then announced during the week that "1989" will be available on Apple Music when it launches later this month. Apple turned negative publicity into positive free advertising, and there are no royalties that need to be shelled out for that particular victory.

Lululemon Athletica (LULU) -- Loser

There's another recall at Lululemon, but this time it's not as embarrassing as the 2013 recall of black Luon yoga pants because they were see-through when some wearers engaged in certain yoga positions. The chain of high-end fitness apparel is recalling the elastic drawstrings of its hoodies after a few customers have complained of injuries or near injuries resulting from the hard tips snapping back.

It may not seem like much, but it could be a pretty serious issue if one of those hard tips swings back and hits an eye. At the end of the day, it's another recall for Lululemon, and that's not welcome news given the premium that shoppers pay to own the chain's luxury-priced athletic apparel.

Netflix (NFLX) -- Winner

Shares of Netflix hit another all-time high after it announced a 7-for-1 stock split. Stocks moving higher on a stock split may be silly, since it's a zero-sum game. However, the split does make the stock more accessible to folks with limited funds to establish a position in the leading premium streaming service.

A couple of analysts downgraded Netflix after the pop on valuation concerns, but one analyst made a bold forecast. FBR & Co. relied on usage data on Netflix and its 40 percent compound annual growth rate to forecast that Netflix will have a larger daily audience than all broadcast networks within a year. Netflix is a pretty big deal.

Whole Foods Market (WFM) -- Loser

Markups may not be natural at Whole Foods. The high-end grocer specializing in organics came under fire this week on accusations that it's overcharging its well-heeled clientele in New York City.

The Department of Consumer Affairs is alleging that the supermarket is overpricing customers on some of its pre-packaged foods, and was troubled to find that the New York City stores continued to overcharge even after being told that it was under investigation late last year.

This naturally doesn't help the previously golden reputation of Whole Foods. It also comes at a time shortly after Whole Foods announced that it will roll out a new concept called 365 next year, stocking lower-priced organic merchandise in an effort to reach jaded millennials.

Kroger (KR) -- Winner

We've covered a grocer and a stock split, so let's wrap things up with a story that combines the two. Kroger announced a stock split. The giant supermarket chain also hiked its dividend, and announced an ambitious buyback plan. Now that is how you stock the shelves in your favor.

Motley Fool contributor Rick Munarriz owns shares of Netflix. The Motley Fool recommends and owns shares of Apple, Lululemon Athletica, Netflix and Whole Foods Market. Try any of our Foolish newsletter services free for 30 days. Looking for a winner for your portfolio? Check out The Motley Fool's one great stock to buy for 2015 and beyond.

 

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Survey: Consumer Sentiment at Highest Level Since January

June 26, 2015, 3:48 am

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Filed under: Economic Indicators, GDP, Consumer Issues

By PAUL WISEMAN

WASHINGTON -- Consumer sentiment rose this month to the highest level since January, suggesting that spending will strengthen this year.

The University of Michigan says its consumer sentiment index rose to 96.1 this month from 90.7 in May. The June reading was the highest since January's 98.1. The index is up from 82.5 a year ago.

For the first six months of 2015, consumer optimism improved at the fastest pace since 2004, three years before the Great Recession, said Richard Curtin, chief economist for the Michigan survey.

Curtin says the readings are consistent with a 3 percent increase in consumer spending this year. That would be the fastest pace since 2006. The Commerce Department reported this week that consumer spending rose at an annual pace of 2.1 percent from January through March.

"An improving economy was the most important component," Curtin said.

Americans at all income levels registered improving optimism.

The optimism reflects a strong job market. Employers have been adding jobs -- nearly 3.1 million over the past year -- at a pace not seen since the boom years of the late 1990s. Unemployment stood at 5.5 percent in May, down from 6.3 percent a year earlier. Wages have been slower to improve.

 

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How the Same-Sex Marriage Ruling Affects Couples' Finances

June 26, 2015, 7:04 am

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Filed under: Family Money, Personal Finance, Scandals and Lawsuits, Estate Planning, Marriage

By Kelley Holland

In a landmark decision for gay rights, the Supreme Court on Friday ruled 5-4 that the Constitution gives same-sex couples the right to marry.

"In many ways we feel like it happened so fast, but the very first applications for marriage that I'm aware of were back in the 1970s, so it seems like it took a long time," said Stuart Armstrong, a certified financial planner with Centinel Financial Group who has served on the board of directors of PridePlanners, financial planners serving the LGBT community. "It's a sea change."

Justice Anthony Kennedy wrote the majority opinion. He joined the court's four more liberal members: Justices Stephen Breyer, Ruth Bader Ginsberg, Elena Kagan and Sonia Sotomayor. Chief Justice John Roberts dissented, along with Justices Samuel Alito, Antonin Scalia and Clarence Thomas.

In terms of planning strategies, in many ways it will make our jobs easier.

The ruling gives unprecedented recognition in America to same-sex couples. And on a practical level, same-sex couples will see their financial lives dramatically simplified. No married same-sex couples will need to file two sets of tax returns, a joint return to the federal government and two separate filings to their state. And all married same-sex couples will have clarity about Social Security benefits when one partner dies as well as state estate taxes.

"In terms of planning strategies, in many ways it will make our jobs easier," said Armstrong.

The road to Friday's ruling has been long and winding, partly because each state establishes its own marriage laws. States didno' explicitly allow or ban same-sex marriage until 1973, when Maryland added a line to its Family Law Code stating that "only a marriage between a man and a woman is valid in this State."

Others followed suit, and couples sporadically contested some of the rules for many years. Then in 1996, President Bill Clinton signed the Defense of Marriage Act, which prohibited federal recognition of same-sex marriages.

DOMA, as that law was known, had myriad implications for same-sex couples, but one of the more frustrating involved taxes. When one spouse died in an opposite-sex marriage, the other could inherit their assets tax-free, thanks to the marital deduction -- but same-sex couples didn't have that benefit. In addition, same-sex couples had to file their federal tax returns separately, which was more cumbersome and often meant they had to pay more in taxes and accountants' fees. They also had to remember to carry their marriage license and other documents with them when they crossed state lines.

DOMA remained on the books even as various states and communities passed laws allowing either civil unions or same-sex marriages. The first legally recognized same-sex marriage took place 11 years ago, and the Supreme Court struck down DOMA exactly two years ago, on June 26, 2013, with a decision that stated, in part, that DOMA led to "deprivation of the equal liberty of persons that is protected by the Fifth Amendment."

That ruling allowed same-sex couples to file joint federal tax returns, but left them having to file separately in states that didn't recognize their marriage.

It also left important uncertainties about same-sex marriage, notably whether states that didn't recognize those unions were required to recognize marriages that took place in other states, and whether states themselves have the right to ban same-sex marriage.

The case before the Court, Obergefell v. Hodges, was consolidated with several others. In the original Obergefell suit, James Obergefell, an Ohio resident, married his longtime partner John Arthur when Arthur was dying from ALS. Because Ohio doesn't recognize same-sex marriage, they flew to Maryland and were married on an airport tarmac. Obergefell sued after Arthur died and Ohio would not list him on the death certificate.

Tim Bresnahan, head of Northern Trust's national LGBT and nontraditional families practice, said the ruling will have very different implications for same-sex couples depending on their circumstances. Those already married in states that were recognizing same-sex marriage may not feel much difference, he said. Married couples in states that weren't recognizing same-sex marriage will see important benefits when it comes to estate taxes and the like. Even long term couples that do not plan to marry may see changes, he said.

It will be extremely important for couples to obtain advice from financial advisors, accountants, or lawyers, Bresnahan said, since each state has different tax and inheritance laws. For example, in Texas, which did not recognize same-sex marriage, the homestead law holds that when one spouse dies, the surviving spouse automatically has the right to remain in the home. That wouldn't have applied to a same-sex couple before Friday's ruling.

"Same-sex marriage at the state level have only been valid for 11 years, so this area of law is still new," he said.

Friday's ruling may be a landmark one, but even so, same-sex couples may face hurdles, Armstrong said. Localities may still challenge some of the provisions.

"There are still things people are going to have to do," Armstrong said. "You still have to carry travel documents -- your marriage certificate, your durable power of attorney, your health-care proxy. Frankly, I would do this even with marriage equality. Couples may still face resistance.

"My husband and I have been together for a number of years and have been together for a number of years before we got married, and then the Supreme Court ruled on [the DOMA case] and it really made a difference for us," said Armstrong. "Many states don't have job discrimination laws and housing protection, but to know we don't have to be thinking about all these workaround strategies and worrying about what state do we move to -- it's hugely important, hugely symbolic."

-CNBC's Tom Anderson contributed to this report.

 

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Market Wrap: S&P 500 Ends Down Week With Flat Session

June 26, 2015, 9:35 am

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Filed under: Technology, Earnings, Market News, European Union, World Markets

By Ryan Vlastelica

NEW YORK -- The S&P 500 closed flat Friday but ended lower for the week, with investors cautious ahead of a meeting in Europe that could decide whether Greece will default on critical loans.

The Dow closed higher, boosted by strong results from component Nike, while the Nasdaq ended solidly lower on disappointing results from Micron Technology, which weighed on chipmakers like Intel.

In Europe, Greece rejected a five-month extension of bailouts Friday, a day before eurozone finance ministers will meet to decide the country's fate. Greece needs fresh funds to avoid defaulting on a $1.8 billion debt repayment to the International Monetary Fund on Tuesday. If it defaults, it may have to leave the euro or the European Union, potentially shaking the region's economic foundations.

"If this issue gets resolved, then we're set up for a fairly decent market, but it could be that everything falls apart on the 30th," said James Meyer, chief investment officer at Tower Bridge Advisers in West Conshohocken, Pennsylvania. "Market valuation is high in an absolute sense."

Nike (NKE) rose 4.3 percent to $109.71 and was the biggest boost to the Dow after reporting a better-than-expected quarterly profit, lifted as it sold more high-margin shoes and apparel at higher prices.

Micron Technology (MU) sank 18 percent to $19.66 a day after forecasting a further decline in prices of chips used in personal computers. It also gave a revenue outlook for the current quarter that was well below market estimates. The PHLX Semiconductor index fell 2.4 percent. Intel (INTC) fell 3 percent to $31.02.

Consumer Sentiment Heats Up

In the latest economic data, University of Michigan's final reading on the overall index on consumer sentiment for June was 96.1, higher than the preliminary reading of 94.6.

Investors have been keeping a keen eye on data to see if the U.S. economy has recovered from a slow start at the beginning of the year. The Federal Reserve has said it remains data dependent and expects to raise rates when it sees a sustained rebound in the economy.

The Dow Jones industrial average (^DJI) rose 56.72 points, or 0.3 percent, to 17,947.08, the Standard & Poor's 500 index (^GSPC) lost 0.71 points, or less than 0.1 percent, to 2,101.6 and the Nasdaq composite (^IXIC) dropped 31.69 points, or 0.6 percent, to 5,080.51.

For the week, both the Dow and S&P 500 fell 0.4 percent while the Nasdaq fell 0.7 percent. Declining issues outnumbered advancing ones on the NYSE by 1,752 to 1,334, for a 1.31-to-1 ratio on the downside; on the Nasdaq, 1,647 issues fell and 1,152 advanced for a 1.43-to-1 ratio favoring decliners.

The benchmark S&P 500 index was posting 16 new 52-week highs and 21 new lows; the Nasdaq composite was recording 137 new highs and 62 new lows. About 6.17 billion shares traded on all U.S. platforms, according to BATS exchange data, compared with the month-to-date average of 6.09 billion.

Friday's volume was impacted as the FTSE Russell rebalanced its indexes. As companies move from one index to another, managers of index-following funds are forced to buy or sell shares to mimic the performance of the index.

What to watch Monday:

• The National Association of Realtors releases its pending home sales index for May at 10 a.m.
• The Federal Reserve Bank of Dallas releases its survey of manufacturing conditions in Texas for June at 10:30 a.m.
• Apollo Education Group (APOL) releases quarterly financial results after U.S. stock markets close.

 

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Same-Sex Marriage's Big Benefit is Social Security

June 26, 2015, 9:59 am

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Filed under: Family Money, Estate Planning, Marriage, Retirement Plans, Social Security

By Mark Miller

CHICAGO -- Friday's U.S. Supreme Court ruling on same-sex marriage will give a huge boost to the retirement security of LGBT Americans. That will be especially true in the realm of Social Security -- where it pays to be married.

The ruling will affect everything from access to spousal pension and retirement accounts, health benefits and more. But Social Security really is the headliner. Recognition of same-sex marriage in all 50 states will guarantee access to Social Security's spousal and survivor benefits, which are the most valuable features of the program.

Just how valuable? Financial Engines, a large financial advisory firm, ran numbers recently for a hypothetical same-sex couple and found that marriage could be worth $343,000 in additional lifetime benefits.

Spouses usually don't have the same lifetime earnings history, and hence their Social Security benefits differ. That is why many married couples take advantage of rules that permit a spouse to receive up to half of a living spouse's benefit if it is larger than his or her own. And the survivor rules permit widows or widowers to receive up to 100 percent of a deceased spouse's benefit or his/her own benefit, whichever is greater.

The big payoff comes when couples coordinate the timing of their Social Security benefit claims. You can claim as early as age 62, but that would reduce the lifetime value of your benefit by 25 percent. Or, you could wait until after the full retirement age (currently 66) to claim -- that gives you a whopping delayed retirement credit of 8 percent for each 12-month period of delay -- up until age 70.

Filing later means higher annual income for life, which can be a great hedge against the risk of running out of money in old age. The downside is that it can mean fewer total lifetime years of benefits, depending on your longevity. That is where a lesser-known, more complex strategy called file-and-suspend enters the picture.

In this scenario, the higher-earning spouse files for benefits at full retirement age, then immediately files a notice to suspend payment of those benefits. That permits the lower-earning spouse to file for a spousal benefit, which is equal to half of the spouse's benefit.

That gets some benefit flowing to the household while the higher earner continues to accrue higher benefits through delaying, perhaps until age 70; at that point, the lower-earning spouse converts to his or her own full benefit. (Note: The spouse can convert to a full benefit only by waiting until full retirement age to file for a spousal benefit.)

Financial Engines illustrated the value of these rules with a hypothetical same-sex couple named Henry and Logan. Henry is 64, Logan is 62; analysis assumes that Henry will live to 84, Logan to 90. Henry is the higher earner -- his benefit at his full retirement age is $2,500 per month, compared with $1,100 for Logan.

The analysis found that if Henry and Logan file separately now, they would receive lifetime combined benefits of $797,000. With recognition as a married couple, they would get $938,000 -- with the difference coming through spousal and survivor benefits for Logan. And, if they execute a file-and-suspend, they would receive $1.14 million lifetime -- just under $343,000 in additional benefits. (In that scenario, Henry files and suspends at 68, and Logan, age 66, starts receiving a spousal benefit.)

The Social Security Administration should be able to issue new rules quickly to its field offices, according to Webster Phillips, a senior policy analyst for the National Committee to Preserve Social Security and Medicare.

NCPSSM has been holding Social Security education meetings for same-sex couples around the country.

(The writer is a Reuters columnist. The opinions expressed are his own.)

 

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Optimize Your Portfolio With the Right Rebalancing Strategy

June 26, 2015, 10:00 pm

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Filed under: Financial Services, Financial Advisors, Mutual Funds, Retirement Plans, Investing

By Donna Fuscaldo

Portfolio rebalancing is a topic investors come across often. The advice may vary depending on whom you ask, but most financial advisers tend to touch on two main issues: how often to rebalance and when.

Equally important is when and why not to rebalance. Rebalancing is a strategy to maintain one's asset allocation in line, should significant market swings or dividend payments affect it. It shouldn't be a knee-jerk or emotional reaction to every market move, and it should most definitely not be done in the pursuit of the next hot investment opportunity.

"Rebalancing won't increase the rate of return," says Michael Brady, founder and president of Generosity Wealth Management in Boulder, Colorado. "The purpose of rebalancing is to stick with the plan."

Not only might overly frequent rebalancing increase investment costs, but it also risks cutting off a cycle before it runs its course, Brady explains. "Whether the cycle is multiple quarters or multiple years, you'll never catch the upward cycle if you are always shifting away from the downside," he says. Not to mention that rebalancing could create a tax situation if it causes short-term realized gains.

Is Rebalancing Necessary?

When it comes to rebalancing, there are two schools of thought. Some investors avoid rebalancing entirely. "I don't think there is any great data out there that says investors need to do it at a particular interval," says Jeff Tjornehoj, a senior research analyst at Lipper. "Both [stock and bond] markets tend to perform well over time, with stocks moving up and bonds producing income," he explains. "Non-balancing is a hands-off approach."

Others argue that rebalancing forces you to pay attention to and understand your portfolio. "If you don't rebalance, you end up having a lopsided portfolio," says John Piershale, wealth adviser at Piershale Financial Group.

Rebalancing Strategies

1. Calendar rebalancing. This is the most common rebalancing strategy among everyday investors. With calendar rebalancing, an investor picks a time interval to review their portfolio and make adjustments, if needed, to get investments back in line with their original allocation. Calendar rebalancing can happen quarterly, yearly, or once every few years. For average investors, Brady says rebalancing on an annual basis is sufficient to prevent the portfolio from deviating too far from the original plan.

2. Asset class rebalancing. In a properly diversified portfolio, the investor's assets are spread among several asset classes. An appropriate time to rebalance is when one or more of those asset classes' share of the portfolio deviates by a wide enough range.

For example, say your ideal stock-bond allocation is roughly two-thirds in stocks and a third in bonds. But in a year, the stock market rises 20 percent and bonds fall 20 percent. This would bring your allocation to 75 percent stock and 25 percent bonds: a much riskier portfolio than where you started. Rebalancing will take care of the deviations from your ideal portfolio by buying when prices are low and selling when prices are high, says Aaron Gubin, director of research and wealth management at investment firm SigFig.

3. Tactical rebalancing. This strategy's goal is to avoid substantial downturns by acting on movements in the markets instead of adopting a stay-the-course mindset. "During normal market conditions, we continually identify, rank and invest only in the most favorable areas," says Piershale. "If market conditions deteriorate substantially, then we have a well-defined exit strategy that our clients understand." This strategy attempts to take advantage of what's happening in the markets at that particular time, depending on the conditions.

4. Glide path rebalancing. Glide path rebalancing is essentially the strategy of target-date funds. The portfolio's asset allocation is determined with a specific retirement date in mind, and becomes more conservative as this date approaches.

With many people living thirty years or longer in retirement, glide path rebalancing can also play a role in making sure the investment portfolio is generating decent returns, while protecting their savings. For instance, Brady says an investor might have 40 percent of their portfolio in equities in the first ten years of retirement, then pare their equity position down to 30 percent in the second ten years, and 5 percent for the remainder of their lifetime.

Rebalance For the Right Reasons

At the end of the day, rebalancing should be about keeping your investments in line with your investment goals and strategy. Whether you do it based on a predetermined time or age, the key is to make sure it keeps you on track with your plan.

Be Tax- and Cost-Efficient

One of the strongest arguments against frequent rebalancing is that, much like with market timing, the investor is likely to incur trading costs, and possibly trigger short-term capital gains if they sell assets held less than a year.

One way to rebalance with taxes and costs in mind is to utilize cash dividends and fresh cash deposits to do "sale-free" rebalancing, says Gubin. "We spend fresh cash on the most under-weight security to bring it back up to its target weight, without having to sell assets that are overweight," he explains. "This is tax- and trading cost-efficient because we don't have to sell anything, or execute unnecessary trades. We can buy assets with the new cash to keep client portfolios on track."

Donna Fuscaldo is a contributing writer at SigFig. Nearly a million people use SigFig to track, improve and manage over $300 billion in investments.

 

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4 Ways to Save Money at Universal Orlando This Summer

June 26, 2015, 10:00 pm

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Filed under: Family Money, Travel, How to Save Money, Music & Entertainment, Vacation Planning

Orlando's theme parks have been pretty crowded this summer, once again positioning the country's top tourist destination for another season of record attendance. A generation ago, a trip to Central Florida basically meant a trip to Disney (DIS), but these days it's hard to ignore what Universal Orlando is up to just a few exits northeast on Interstate 4.

Between the magnetic Harry Potter attractions at both Universal Orlando parks and parent company Comcast (CMCSK) continuing to expand with new hotels and attractions, a trip to Orlando now doesn't seem complete without checking out Universal's fast-growing resort.

Universal attracted 16.4 million guests to its Universal Studios Florida and Islands of Adventure theme parks combined last year, according to industry tracker Themed Entertainment Association. That's a sliver of the 51.5 million turnstile clicks that rival Disney generated across its four Disney World theme parks, but momentum is the key here. Disney World's attendance rose 3 percent last year, according to Themed Entertainment Association. Universal Orlando experienced a more robust 8 percent spike.

A day at any of the major Central Florida theme parks doesn't come cheap. We covered ways to save money at Disney World a couple of weeks ago. Now let's go over a few of the ways to make Universal Orlando more bearable on your pocketbook.

1. Know your ticket discounts. Universal Orlando's latest rate increase kicked in back in March. A one-day ticket to either park will set you back $108.63 (that's with tax included), and if you want to experience the Hogwarts Express -- the richly themed train experience that connects the two parks -- you will have to pay $156.56 for a one-day ticket that includes access to both parks.

Aggressive discounts were easy to find several years ago when Universal Orlando was desperate. Steep markdowns were offered at area supermarkets, warehouse clubs, and fast-food chains. That's obviously not the case now. There are still some deals to be had, but they won't shave more than a few bucks off your entrance fee.

If you belong to the AAA driving club, you can get a discount at the gate or by buying your tickets in advance. Military discounts are offered for those buying in advance. Florida residents can get a discount, but only on multiday or annual passes.

2. Find an annual pass holder. If you have friends in Central Florida, you may want to ask them if they have an annual pass to Universal Orlando. If they do, you may want to tag along. Annual pass holders can get guests in at a 10 percent discount. Depending on the type of annual pass -- they vary in price from $239 to $479 before tax -- other perks may include free parking and discounts on food and merchandise.

It may be tempting to get an annual pass yourself if you plan to visit the park for more than a couple of days. Annual visitors may even want to consider buying a pass, and timing the trips so they take place within that 12-month span. However, at the very least, hitting the park with a pass holder has its benefits.

3. Load up on souvenirs before you arrive. If you're traveling with young children, know going in that the parks are loaded with stores. Some rides even exit through gift shops, something that Universal and other park operators have learned from the theme park mavens at Disney.

The easiest advice is to resist the temptation. No one needs a souvenir. However, if you feel that resistance will be futile, it may make sense to stock up on discounted character merchandise ahead of time. Universal Orlando is full of licensed properties: Marvel, Harry Potter, and Jurassic Park have entire sections of the parks devoted to the popular franchises, and odds are that you can load up on related merchandise at a discount if you shop around before you arrive.

4. Stay at a non-Universal resort -- unless it makes financial sense. Universal now has four lavish hotels at its resort. It's building a fifth. They're not cheap, but perks include complimentary transportation to the parks (saving guests on parking fees) and early entry. Three of the four hotels even allow guests to bypass the lines at most of the rides, something that day guests have to pay at least $35 extra per person to buy.

Work the math and staying at a Universal Orlando hotel may not be outrageous, at least for the days in your vacation when you plan to check out the parks.

However, with hundreds of lodging options in the area offering more than 90,000 hotel rooms, it certainly doesn't hurt to shop around. If the math favors an off-site property, make the most of it and take advantage of the cheaper restaurants available outside of the resort.

Motley Fool contributor Rick Munarriz owns shares of Walt Disney. He's also spending the summer in Celebration, Florida, covering the industry at mouse level. The Motley Fool recommends and owns shares of Walt Disney. Try any of our Foolish newsletter services free for 30 days. And check out The Motley Fool's one great stock to buy for 2015 and beyond.

 

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What Retirement Without Savings Looks Like

June 26, 2015, 10:00 pm

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Filed under: Personal Finance, Retirement Living, Social Security, How to Save Money

By Paul Sisolak

In a perfect world, the perfect retirement is where life begins. But for people like Debra Leigh Scott, there's the very bleak possibility that retirement is where life might end.

"Suicide is my retirement plan," Scott, a 60-year-old adjunct professor, said in an interview with Vitae. "Unless you have a spouse or partner, you're looking at dire poverty in old age. In addition to poverty, you're looking at getting no additional work because of your age, or you're looking at dropping dead in the classroom."

Scott, a divorced mother of two grown children, has been teaching for over a quarter century but never received the tenured position she hoped for. After years of financial struggles -- including the loss of a home -- she has no money saved for retirement.

Fewer Americans than ever before are adequately prepared financially to retire. In a survey this year by the Employee Benefit Research Institute and Greenwald & Associates, 28 percent said they have less than $1,000 in savings and investments poised for retirement. A 2014 Federal Reserve survey paints a more discouraging picture: 31 percent of non-retired respondents have zero retirement savings -- 19 percent of them ages 55 to 64.

Scott's story is a real-life reminder that paints a painful portrait most people would rather avoid. With their golden years well ahead of them, many people assume there will be enough money stored up to retire without a hitch. And they don't even want to think about considering the alternative. But for many adults behind on retirement savings, they might be unaware of the realities of retiring without enough money in the bank.

Is Retiring With No Savings an Option?

Opinions vary on how much money people need in retirement to sustain their current lifestyle, but 70 percent to 80 percent of pre-retirement income is often recommended. If your household is at the national median of $54,000 a year, for example, you'll need to save up enough during your working years to have $37,100 to $42,400 annually at your disposal during retirement.

"That might be enough if you've paid off your mortgage and are in excellent health when you kiss the office goodbye," CNNMoney wrote. "But if you plan to build your dream house, trot around the globe, or get that Ph.D. in philosophy you've always wanted, you may need 100 percent of your annual income -- or more."

If that money isn't there by the time you retire, that ideal retirement -- world travel, time spent with family, and a life of leisure, relaxation and hobbies -- will have to come with some major downgrades to compensate for your lack of savings.

1. You'll need to live off your Social Security benefits. The average Social Security check for retirees is $1,287. "Social Security can help boomers make ends meet during their golden years, but for many, it won't be enough," wrote Donna Fuscaldo of Fox Business. If you're single and qualify for Supplemental Security Income, you might be able to barely live off Social Security and SSI, but if you have any extenuating expenses, like a mortgage or supporting adult children returning to the nest, you can't.

2. You might have to get a roommate. Steve Vernon of CBS MoneyWatch offered the example of a single, 65-year-old woman with a $50,000 annual salary -- and no savings or assets to invest -- looking to retire. "To help cover her living expenses, one option she may want to consider is the 'Golden Girls' solution of sharing living quarters with other people in her situation," he wrote. "If she owns her house, she may want to consider renting a room to bring in more income."

If personal space and quiet are important to you, new retirees with no savings might not have the patience or inclination to go the roommate route -- though Vernon noted that this arrangement could reduce feelings of loneliness common in elderly people. Rooming with adult children can be a more comfortable alternative and can bring family closer together.

3. You'll have to alter your lifestyle and spending. If Vernon's hypothetical retiree wants to retire full time at age 70, "she'll need to focus on buying 'just enough' to meet her needs and be happy. Most likely this will be a struggle, unless she has paid off the mortgage on her house, which will make things a little easier," he wrote.

4. You might have to continue working. You could delay retirement until 70, which is completely realistic for a healthy senior. "Others, who can't live off of Social Security alone, will need to find ways to supplement their incomes with part-time work," according to Mike Dang of The Billfold. A good idea in theory, but will you earn enough money in those few years to actually retire on?

"Eventually she'll need to reduce her living expenses, though, because chances are good she won't be able to work much past 80," Vernon wrote. "Many people might groan at the idea of working into their 70s, but our hypothetical retiree really doesn't have much of a choice unless she's able to dramatically reduce her standard of living."

5. You'll need to consider downsizing. Selling your big house or car and downgrading to smaller, more affordable living arrangements and transportation can save money. If every decade of your working life has been to dream bigger and bigger, however, scaling down smaller and smaller in retirement might seem a bit anticlimactic.

6. You could end up homeless. In all honesty, ending up homeless isn't far from reality for people with zero savings or assets to their name. But in some corners of the world, it's a way of life for a number of baby boomers. A 2014 Harper's article brought this sad fact to light as "a growing trend of older Americans for whom the reality of unaffordable housing and scarcity of work has driven them from their homes and onto the road in search of seasonal and temporary employment across the country," Lynn Stuart Parramore wrote of AlterNet. These displaced seniors have no choice but to keep working as RV-roaming nomads in whatever farm, factory or amusement park that will have the "workampers."

Start Saving for Retirement Now

It's never too late to begin a retirement savings plan, no matter what stage of life you're in. Here are retirement savings tips for different age groups:

• In your 20s: You've got 40-plus years to build a nest egg, but don't procrastinate. A recent LearnVest study found that a saver who begins putting away $600 a year in a retirement fund at age 25 will have $72,000 by age 65.
• In your 30s: With your career hopefully in full swing, this is the decade to take advantage of investments and high interest rates to strengthen your retirement nest egg. This is the period when you should be considering savings vehicles like index funds and contributing heavily to your IRA or 401(k). Start building a financial relationship with a broker to guide you down your savings path.
• In your 40s and 50s: With the retirement savings ball rolling, middle age is the time to keep honing and managing your finances to save up some extra cash. Stay on top of your budget, build an emergency fund, take steps to minimize spending and lower high-interest debt, and find extra income through insurance. By this point, you should be homing in on the dollar figure you'll need if you intend to retire between 65 to 70.

Trying to retire without any savings in the bank can be difficult, and that difficulty is compounded by other factors senior citizens need to keep in mind as they age, like health issues and mobility. If saving money is not possible for you, retirement doesn't have to pass you by. There are plenty of government-assisted and nonprofit programs that can help you, such as the Commodity Supplemental Food Program, Medicare, senior housing help from Housing and Urban Development and other resources.

This story originally appeared on GOBankingRates.com.

 

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The Right Ways to Split the Bill at a Restaurant

June 26, 2015, 10:00 pm

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Filed under: Personal Finance, Food & Beverage, Restaurants, Consumer Issues, Spending

By Miriam Cross

Dining out should be an opportunity to relax with friends, impress a client or bond with someone special, not fret over the protocol for paying and tipping. Here's how to handle three awkward situations.

When I try to pay the check, I get an argument. If you have formally invited someone to join you for a meal (for example, "I want to take you out to celebrate"), you're the host -- be prepared to pay. But if your guest insists on splitting the tab, accept the offer rather than argue.

When you're determined to treat someone for a special occasion, do some advance planning: Choose a restaurant you know well, arrive early and slip the waiter your credit card with instructions to charge the meal and gratuity to the card.

As the invitee, it doesn't hurt to offer (sincerely) to share the bill; most hosts appreciate the gesture, even if they plan to pay. If you get no for an answer, simply thank your host and say the meal is on you next time. Don't spoil a pleasant occasion by bickering over the bill.

For occasions such as a large birthday dinner at a restaurant that you're not planning to host, let guests know ahead of time that you're putting together a pay-your-own-way type of event, says Daniel Post Senning, spokesman for the Emily Post Institute. Keep your tone casual when spreading the word.

The group wants to split the bill evenly, but my meal costs less. Light eaters or sparing drinkers may resent having to subsidize their tablemates' lobster entrees or bottles of wine. If you're out with a regular group of friends and suspect you'll end up feeling stiffed, request a separate check from your server -- but do so when he or she is taking your order, says etiquette expert Diane Gottsman. (Volunteer an explanation to your friends if you like, such as "I'm just having a salad tonight" or "I'm sticking with water this time.") Once everyone is throwing their credit cards down for the waiter to charge equally, you've missed the chance to bow out gracefully.

In other situations -- especially business contexts -- avoid the nickel-and-diming. "You run the risk of looking cheap," says Gottsman. Instead, be prepared to fork over your equal share and enjoy the group experience.

I noticed my host left a terrible tip. Much as you might like to add to the tip yourself, "that's making a comment on the generosity of your host," says Post Senning. He advises dropping the issue altogether. If your conscience won't let you shortchange the waiter by proxy, however, walk out with your host and say good-bye, then discreetly return to make up the difference, advises Gottsman.

 

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6 Sneaky Summer Expenses to Avoid

June 26, 2015, 10:00 pm

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Filed under: Personal Finance, Travel, Shopping, Music & Entertainment, Vacation Planning

By Sabah Karimi

Summer is the time kick back, relax and just take things easy for a few months. While this means you may be feeling a little lax with your budget, you don't have to waste those hard-earned dollars on frivolous purchases and expenses that can easily be avoided. Even if you aren't tracking your spending on a daily basis, there are some things you can do to be more mindful about your spending habits and make better money decisions all season long.

Whether you're enjoying some vacation time this summer or just working your way through those hot summer days, here are six sneaky summer expenses you can avoid.

1. Excessive toll charges. You may be relying on your GPS to provide you with the shortest route and turn-by-turn directions to your final destination, but make sure you aren't required to pay a lot of toll fees along the way. Consider taking an alternative route -- even if the trip takes slightly longer -- so you don't end up paying extra money in toll charges on a single trip. Factor in the extra cost of gas on the alternate route if needed so you really are saving money on the total cost of that drive.

2. Car rental insurance. If you're planning a road trip but don't want to put miles on your own car or you end up needing a rental car when you're on vacation, don't add more to the cost of your trip by purchasing rental car insurance. Almost all major credit card companies offer car rental insurance coverage as a benefit to cardholders -- regardless of their balance. Check with your credit card provider to find out if it offers car rental insurance and also check with your insurance company to see if car rentals are included in your coverage. In many cases, your car insurance will provide primary coverage and the credit card will take care of secondary coverage, such as towing charges and other fees.

3. Cost of personal items on vacation. Don't let running out of sunscreen, bottled water or other everyday essentials put a dent in your vacation budget this season. Buying these items at a hotel, resort or retail store at a vacation hotspot can leave you paying a premium, so make sure to stock up on the essentials before you head out. Make a checklist of must-haves for the beach and beyond so you don't spend extra money on the basics.

4. Beach umbrella and chair rentals. Many resorts and hotels by the ocean offer beach umbrella and chair rentals for an additional fee. If you can bring your own, you could end up saving upward of $15 a day on these amenities. Call ahead to confirm that you are allowed to bring your own beach items -- some larger resorts may not allow you to use anything but their own -- so you can save some extra money on that overnight stay.

5. Premium gas prices in tourist towns. If you're heading to a major tourist city, make sure to fill up in the suburbs or anywhere outside of the main tourist zones to avoid the high price of gas. Many gas stations around tourist hubs charge a premium because they know visitors have limited options in the area. Be smart about where you fill up so you aren't paying several cents more per gallon every time you run out of gas.

6. Movie rental late fees. If you're planning a movie marathon for a group or just binge-watching a few days during that summer vacation away, make sure you don't get stuck with late charges and extra fees on those rentals. Only rent what you can watch that same night so you don't fall into the trap of holding on to the movie for a few extra nights -- and paying late fees. Redbox, for example, only charges $1.50 plus tax a night for most DVD rentals but will charge you the same price for every night you hold onto it. If you're bad about returning movies on time, consider low-cost and free alternatives, such as rentals from the library or borrowing a DVD from a friend to offset some of the costs of movie night.

Sabah Karimi is a columnist for the blog Wise Bread, where you can find consumer tips like how to select the best balance transfer credit cards.

 

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Pending Home Sales Climb to 9-Year High

June 29, 2015, 3:05 am

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Filed under: Mortgages, Real Estate, Housing Market, Home Buying, Economy

By JOSH BOAK

WASHINGTON -- More Americans signed contracts to purchase homes in May, as pending sales climbed to their highest level in more than nine years.

The National Association of Realtors said Monday that its seasonally adjusted pending home sales index rose 0.9 percent to 112.6 last month. The index has increased 10.4 percent over the past 12 months, putting it just below the April 2006 level -- which was more than a year before the housing bust triggered the Great Recession.

The steady job growth coupled with low but rising mortgage rates has created greater urgency to buy homes. The gains reflect both a stronger economy but also the pressures to purchase a home before both prices and the cost of borrowing become potentially unaffordable.

Completed sales of existing homes jumped 5.1 percent last month to a seasonally adjusted annual rate of 5.35 million, the Realtors said last week. Median home prices climbed 7.9 percent over the past 12 months to $228,700, about $1,700 shy of the July 2006 peak.

The recent gains aren't evenly spread.

Pending sales increased in the higher-priced Northeast and West markets last month, while dropping in the Midwest and South.

Pending sales are a barometer of future purchases. A one- to two-month lag usually exists between a contract and a completed sale.

 

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5 Ways Airlines Are Actually Making Flying Better

June 29, 2015, 3:44 am

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Filed under: Travel, Travel Industry, Airfare, Vacation Planning

By SCOTT MAYEROWITZ

NEW YORK -- Packed planes. Less legroom. Fewer frequent flier miles.

Is that all summer travelers can look forward to?

Thankfully, no. Amid the unpleasantness, there are a few bright spots where airlines inject a bit of humanity back into our journey. And with a record 222 million passengers expected to fly on U.S. airlines this summer, we could use any little bit of sympathy.

Here are five things to actually like about flying today:

Baggage guarantees. The $25 fee to check bags is a fact of life on most airlines. But until recently, only Alaska Airlines (ALK) thought the extra money should guarantee passengers something in return. Since 2010, the airline has promised that suitcases will be on the carousel within 20 minutes of the plane arriving at the gate. If not, passengers get a $25 voucher for a future flight or 2,500 bonus frequent flier miles. Delta Air Lines (DAL) copied that policy this year, offering 2,500 bonus miles to existing members of its frequent flier program -- but no voucher. Act quickly: Alaska requires you to reach out within two hours of arrival; Delta within three days. And ultimately it's your stopwatch against the airlines' -- they are the final arbiter of tardiness.

Suitcase delivery. Speaking of luggage, you can skip the baggage carousel and have your bags delivered straight to your home, office, hotel or any other location within 40 miles of the airport. Yes, the airlines do charge an extra $30 for one bag, $40 for two or $50 for up to eight suitcases. But for some travelers it is worth that extra price. And the bags are supposed to show up within four to six hours. Alaska, American (AAL), Delta, JetBlue (JBLU), Southwest (LUV) and United (UAL) offer this service through an outside vendor, Bags VIP.

Streaming video. Airlines are providing more ways for passengers to be entertained -- or at least distracted from the cramped space. The latest innovation: the ability to stream movies and TV shows directly to our tablets and smartphones. Yes, some content does cost money, but there are plenty of free offerings. Alaska, American, Delta, JetBlue, Southwest and United all offer such a service on some -- but not all -- of their planes. Your best bet to be entertained is on Delta, which offers the service on all but its 50-seat domestic regional jets and on more than half of its international fleet, and on Southwest, which has it on 80 percent of its jets -- basically the newest ones. American only offers streaming on jets without individual TVs; United has the service on just 30 percent of its flights. Passengers may also encounter a lack of electrical plugs to charge all these extra devices. Airlines are working to get each passenger their own plug or USB port but they aren't moving fast enough.

Food and drinks on demand. Airlines have traditionally controlled when we can eat or drink. Passengers sit waiting for flight attendants to roll the cart down the aisle and then order a beverage or buy a snack knowing that they are unlikely to see the cart for the duration of the trip. Virgin America has a different system. Throughout the flight, passengers can order cookies, chicken sandwiches, margaritas and more on touchscreens in front of them. The airline sells more items and passengers don't have to wait long for a refill. Perfect for today's impatient traveler.

Coat check. So this isn't going to help with summer vacations but gets points for creativity. JetBlue now offers a coat check at New York's JFK. Yes, leave your jackets in chilly New York while you jet off to Florida or the Caribbean. The only catch: you need to fly back into JFK, it has to be a domestic flight and it costs $2 a day. Still, this service keeps the overhead bins less crowded and prevents passengers from forgetting jackets in their tropical hotel room closets.

 

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VA Aims to Help Homeless, At-Risk Veterans Find Stable Jobs

June 29, 2015, 4:06 am

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Filed under: Careers, Job Market, Unemployment, U.S. Government, Economy

By Lisa Cornwall

CINCINNATI -- David Bowles is excitedly making plans to move from a homeless shelter to an apartment of his own in a few weeks, thanks to a new Department of Veterans Affairs program helping homeless veterans find long-term employment.

"They saved me," said the 56-year-old former Marine, who got VA assistance in landing a job with a suburban Cincinnati company.

Job-ready veterans exiting homelessness like Bowles and others on the brink of homelessness can now turn to the VA's Homeless Veterans Community Employment Services for individualized assistance in finding the types of stable jobs needed to sustain housing.

The program officially launched this month uses 154 community employment coordinators at VA locations nationwide to help identify job-ready veterans and establish relationships with local employers. They also connect veterans with resources to help them succeed after finding work.

I never expected to end up in a shelter, but one hiccup in life can put you flat on your back.

Homelessness is a serious problem among veterans: nearly 50,000 were homeless on a single night in January 2014, according to a count developed through a partnership between the VA and the Department of Housing and Urban Development.

For Bowles, a job layoff and a failed marriage left him without money for rent or a motel when he returned to his home state of Ohio from South Carolina to hunt for a work.

"I never expected to end up in a shelter, but one hiccup in life can put you flat on your back," said Bowles who applied for his current job on his own, but had no way to get back and forth.

The Cincinnati VA's coordinator helped by connecting Bowles to a donated fund the VA uses to provide bus passes for homeless veterans and by reassuring the prospective employer.

"I could promise he would be able to get back and forth until he got his first paycheck," said Elizabeth Appelman.

Bowles now works at Advanced Testing Laboratory doing quality control measurements of components for a major medical device manufacturer. The company's human resources manager said Bowles' skills and "can-do" attitude fit their needs and the transportation guarantee helped everything fall into place.

"It's worked out perfectly for us," said Shelley Cooper.

Getting to and from jobs is a major hurdle for homeless veterans, especially in rural areas with limited public transportation. Coordinator Paul Schuerenberg at the VA in Poplar Bluff, Missouri, says he is talking with various groups there to see if expanded bus service or some other solution is possible.

Veterans trying to move from homelessness shouldn't be burdened with trying to figure out where to find transportation assistance or clothes for job interviews or employers willing to hire them, said Carma Heitzmann, national director of the new homeless employment program.

'More Streamlined'

"The idea is to try to put all those resources together so it's more streamlined and efficient for the veteran," Heitzmann said.

The Cleveland VA's coordinator says that while efforts are made to match veterans' skills with employers' needs, veterans' preferences are also considered.

"We want them to have jobs they have a passion for and want to continue long-term," said Daniel Abraham.

Dwight Washington, of the Cleveland suburb of Richmond Heights, was able to get such a job with Abraham's help. The 61-year-old Army veteran was on the brink of homelessness after a temporary job through the VA ended. But Abraham connected Washington, who has years of experience with mechanical and electrical maintenance, with a company providing maintenance services for the Horseshoe Casino in Cleveland.

Washington now works there and loves it.

"It's good to feel normal and be self-sufficient again," he said.

 

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GE to Sell Global Fleet Assets to Element and Arval

June 29, 2015, 4:30 am

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Filed under: Company News, General Electric, Mergers & Acquisitions, Industrial, Transportation & Logistics

By Euan Rocha

TORONTO -- General Electric said Monday it agreed to sell its fleet management arm in the United States, Mexico, Australia and New Zealand to Canada's Element Financial for $6.9 billion, moving it a step further in its plan to shed financial assets.

Separately, GE signed a memorandum of understanding to sell its European fleet segment to Arval, a subsidiary of BNP Paribas . GE didn't disclose the sale price for this part, but a source close to the matter said GE is set to receive some $3.3 billion for this business.

The sale is part of a plan unveiled in April to divest about $200 billion in GE Capital assets as it moves away from finance and focuses on manufacturing industrial equipment.

We are on track to execute sales of $100 billion by the end of 2015 and expect to be substantially done by the end of 2016.

"We are on track to execute sales of $100 billion by the end of 2015 and expect to be substantially done by the end of 2016," said GE Capital Chief Executive Officer Keith Sherin.

GE's deal with Element will transform the Canadian company into North America's largest fleet provider. The business finances and manages vehicles of companies that own vast fleets for sales staff, technicians and others on the move. GE sold its Canadian fleet unit to Element in 2013.

On closing of the deal, Element's combined fleet management assets will include over a million vehicles under contract and net earning fleet assets of over C$13 billion ($10.5 billion). Its total assets will exceed C$21 billion.

BTIG analyst Mark Palmer said he sees the acquisition giving Element's stock a "significant boost."

Element and its advisors, BMO, Barclays, INFOR Financial and CIBC, also helped facilitate the side transaction with Arval for the GE's European fleet assets. The unit's final sale price was not been disclosed since a deal is subject to consultations with the companies' work councils.

Element said the related transaction expands the Element-Arval Global Alliance in Europe, giving it the capability to manage customer fleets in over 40 countries.

GE (GE), advised by JPMorgan (JPM), said both deals together represent a total of $8.6 billion in assets. Excluded from the deals is GE's fleet business in Japan.

Element expects the U.S. and Mexico deal to close in the third quarter of 2015, and the Australia and New Zealand deal in the fourth quarter. The Arval deal is also expected to close in the fourth quarter.

-Supriya Kurane contributed reporting from Bangalore.

 

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How to Clean Your Sneakers -- Savings Experiment

June 29, 2015, 5:30 am

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Filed under: Savings Experiment, Home & Garden, Did You Know

Did you know you can clean your dirty sneakers the same way that you clean your teeth? Here's how.

To get your trainers sparkling again, all you need is an old toothbrush and some toothpaste with baking soda and peroxide. Just put some toothpaste on a toothbrush, dip it in water, and start scrubbing your sneaks, especially the sides of the soles.

The toothpaste will work as an abrasive, and you'll see the dirt start to disappear. Once it's gone, simply wipe off the toothpaste with a paper towel. Voila! Your old sneakers will look just like new.

So, if you've got a pair of sneakers that are looking worn out, shine them back up with this simple solution. They'll be good as new without breaking the bank.

View Poll

 

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NBC to Donald Trump: You're Fired

June 29, 2015, 7:49 am

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Filed under: Company News, Media, Entertainment Industry, Celebrities, CEOs

By DAVID BAUDER

NEW YORK --NBC said Monday that it is ending its business relationship with mogul and GOP presidential candidate Donald Trump because of comments he made about Mexican immigrants during the announcement of his campaign.

The network said it would no longer air the annual Miss USA and Miss Universe pageants, which had been a joint venture between the company and Trump. Miss USA has aired on NBC since 2003, and this year's edition was set for July 12.

At NBC, respect and dignity for all people are cornerstones of our values.

"At NBC, respect and dignity for all people are cornerstones of our values," NBC said in a statement.

Trump's reply: a "weak" NBC should prepare to meet him in court.

NBC's action comes less than a week after Univision similarly decided to ditch Trump and the pageants. Trump has also been a fixture on NBC as host of "The Apprentice" and its celebrity offshoot, and an agreement that he would no longer be on the show predated the current controversy. The network said Monday that it and producer Mark Burnett are exploring ways to continue "Celebrity Apprentice" sans Trump.

Trump said he anticipated losing the business relationship and that he's not apologizing for his statements because they "were correct."

"Whatever they want to do is OK with me," Trump told reporters in Chicago after a campaign speech to civic leaders.

But in a statement issued by his company in New York, Trump said "NBC is weak, and like everybody else is trying to be politically correct. That is why our country is in serious trouble."

He said he'd consider suing, as he plans to do with Univision. He also took a shot at NBC's decision to demote, but not fire, news anchor Brian Williams for telling false stories about some of the reporting he was involved in.

"They will stand behind lying Brian Williams, but won't stand behind people that tell it like it is, as unpleasant as that may be," he said.

During his presidential kickoff speech, Trump said Mexican immigrants are "bringing drugs, they're bringing crime, they're rapists and some, I assume, are good people." He called for building a wall along the southern border of the United States. Trump later said that his remarks were directed at U.S. policymakers, not the Mexican government or its people.

The National Hispanic Leadership Agenda, a group of 39 Latino advocacy organizations, had called on NBC to get out of business with Trump. Similarly, a petition urging the same thing on the Change.org website had gathered more than 218,000 signatures.

Dozens of protesters -- from immigrant and Latino rights groups -- waited outside of a downtown Chicago restaurant where Trump spoke. Their chats included "No more hate!"

Maritza Vaca, with the Chicago-based Accion Hispano, said immigrants have rights and was upset by Trump's comments.

"It is racism," she said. "For him to be running for president is ridiculous."

NBC said it is still determining what it will air in place of the pageant next month.

-Associated Press writer Sophia Tareen in Chicago and television writer Frazier Moore in New York contributed to this report.

 

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Market Wrap: Stocks Tumble as Greek Debt Crisis Woes Worsen

June 29, 2015, 9:55 am

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Filed under: Market News, European Union, Banks, Insurance Industry, World Markets

By Sinead Carew

NEW YORK -- U.S. stocks fell sharply Monday in heavy trading, and the S&P 500 and the Dow had their worst day since October after a collapse in Greek bailout talks intensified fears that the country could be the first to exit the eurozone.

The European Central Bank froze funding to Greek banks, forcing Athens to shut banks for a week to keep them from collapsing.

And Greece appeared to confirm it was heading for a default after a government official said the country wouldn't pay a 1.6 billon euro loan installment due Tuesday to the International Monetary Fund.

U.S. investors also worried about Puerto Rico's debt problems and a bear market in China the day before quarter-end and ahead of Thursday's U.S. jobs report and the long weekend for U.S. Independence Day.

"None of that bodes well for people stepping in and buying the dips as has been the mentality most of the year," Michael James, managing director of equity trading at Wedbush Securities in Los Angeles who said U.S. shares could fall again Tuesday.

"Could that reverse itself tomorrow? It's going to take a lot of good news from Greece," he said noting that portfolio managers wouldn't want to show risky equities on their books at the end of the second quarter.

The Standard & Poor's 500 index (^GSPC) and Dow Jones industrial average (^DJI) had their worst days since Oct. 9 and both turned slightly negative for the year to date. The last annual decline for both indexes was 2008. The Nasdaq had its biggest one-day percentage decline Monday since March 25.

Volatility rose sharply and all 10 S&P sectors retreated while the Global X FTSE Greece exchange-traded fund, which tracks the Athens stock market, fell 20 percent. In Europe, the blue-chip Euro Stoxx 50 index had suffered its biggest one-day fall since 2011.

There is no mechanism to be ejected from the European Union. This has never happened before.

"There is no mechanism to be ejected from the European Union. This has never happened before," said Brian Battle, director of trading at Performance Trust Capital Partners in Chicago. "When you don't know what could happen you sell. You get on the sidelines."

While the Greek economy is small and most U.S. corporations have limited direct exposure, investors are concerned about the fallout across Europe if Greece exits the eurozone.

A snap Reuters poll of economists and traders found a median 45 percent probability that Greece would leave the eurozone.

Chinese stocks had closed sharply lower after a volatile day of trading despite surprise monetary easing by the central bank.

On top of this, U.S. territory Puerto Rico faces a restructuring of its $73 billion debt burden.

The Dow Jones industrial average fell 350.33 points, or 1.95 percent, to 17,596.35, the S&P 500 lost 43.85 points, or 2.09 percent, to 2,057.64 and the Nasdaq composite (^IXIC) dropped 122.04 points, or 2.4 percent, to 4,958.47.

The CBOE Volatility index, a measure of the premium traders are willing to pay for protection against a drop in the S&P 500, jumped 34.5 percent to 18.86, its highest level in almost five months

S&P 500 Index (Closing) - 1 Year | FindTheData

Financials was the worst S&P sector with a 2.44 percent decline. U.S. banks have an exposure to $12.7 billion of Greek debt.

JPMorgan Chase (JPM), down 2.5 percent, was the biggest drag on the S&P financial sector followed by Wells Fargo (WFC), down 2.4 percent. Goldman Sachs (GS) weighed the most on the Dow with a 2.6 percent decline.

Assured Guaranty (AGO) fell 13.3 percent and MBIA (MBI) fell more than 23.4 percent after BTIG downgraded the insurers on concerns over Puerto Rico's debts.

Declining issues outnumbered advancing ones on the NYSE by 2,874 to 282, for a 10.19-to-1 ratio on the downside; on the Nasdaq, 2,469 issues fell and 367 advanced for a 6.73-to-1 ratio favoring decliners.

The benchmark S&P 500 index was posting 2 new 52-week highs and 25 new lows; the Nasdaq composite was recording 48 new highs and 126 new lows.

About 7.3 billion shares changed hands on U.S. exchanges, compared with the 6.3 billion average for the month-to-date, according to data from BATS Global Markets.

-Saqib Ahmed contributed reporting from New York.

What to watch Tuesday:

• ConAgra Foods (CAG) reports quarterly financial results before U.S. stock markets open.
• Standard and Poor's releases the S&P Case-Shiller home price index for April at 9 a.m. Eastern time.
• The Institute For Supply Management-Chicago releases its survey of purchasing managers for June at 9:45 a.m.
• The Conference Board releases its Consumer Confidence survey at 10 a.m.

 

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The Pros and Cons of Sharing Your Money Goals

June 29, 2015, 10:00 pm

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Filed under: Identity Theft, Technology, Personal Finance, Ripoffs & Scams, Internet Fraud

By Kimberly Palmer

After Matthew Robinson heard about Linkagoal, a social networking site for people who want to share their goals, he decided to join. He posted that he wanted to start a clothing brand, and soon afterward, heard from a friend on the site who said he could help him with that. He began sharing more goals, from taking his dad to a San Francisco Giants game to getting an A on a final exam, and felt motivated by the encouragement from others on the platform.

"I feel like it helps create more ambitious people by giving them something to write their goals down on," says the 23-year-old San Jose, California-based​ college student. Writing down goals also helps him stay focused on them, he adds, and he'll often log into the platform to review what he's written down.

If you can team up with others who are facing similar challenges, next steps or financial goals, they can be the biggest help.

Robinson's results reflect findings by academics on goal-setting and achieving. "Research has consistently shown that making public statements about your goals is an excellent 'commitment strategy,'" says Christine Whelan,​ a consumer science faculty member and director of the Money, Relationship and Equality initiative at the University of Wisconsin-Madison School of Human Ecology. In other words, she says, people are more likely to follow through on something if they tell others about their intentions.

Social media platforms can help people reach like-minded users and share progress toward goals. "If you can team up with others who are facing similar challenges, next steps or financial goals, they can be the biggest help," Whelan says. To find a group that offers support, she suggests starting a private Facebook group with a few friends. You could invite your larger network through a public post like "Who wants to join me in paying off $1,000 worth of credit card debt in the next three months?" she says.

Financial goals, such as saving $1 million​ or paying off credit card debt, are popular on Linkagoal. Users can also add smaller steps below each goal to help them break down what they need to do. ​"Our mission is to improve people's lives across the globe by having them achieve their goals," says founder and CEO Mohsin Shafique​. Since launching last year, Linkagoal has accumulated 875,000 users and recently became available in app form. Like Twitter, you can follow others using the app or Web-based platform, and they can follow you.​ Shafique's Linkagoal profile is filled with 44​ goals ranging from learning code to meeting up with school friends, and he says the support of other users has helped him achieve many of those goals, including quitting smoking.

"Most of us try to go solo and don't know where to start," Shafique says. Social networking can help people form supportive connections around topics of mutual interest and figure out the next steps they need to take to meet their goals, he adds. A Linkagoal survey of 1,171 U.S. adults earlier this year found that 3 in 4 people who set goals in the previous year failed to meet them. One reason was they didn't know where to start; a bigger reason was a lack of motivation.

Paula Pant,​ contributor to the U.S. News Frugal Shopper blog and founder of AffordAnything.com, says she often shares her money goals online through her blog or social media accounts. "When I publicly commit to a goal, I know that I'll face the embarrassment that comes from not sticking to what I stated -- and that knowledge forces me to stick to my original goal," she says.

A few years ago, after Pant and her partner decided to live on one income and invest the other, she wrote about their plans on her blog and followed up with frequent updates. After a few people left comments suggesting there was no way she could reach her goal, she felt extra motivated to follow through with it. "It felt great to prove them wrong," she says.

Still, social media and goal-setting experts urge people to show some measure of restraint when sharing personal ambitions with strangers online. "Use a 'gut check,' " Pant suggests. "If you feel queasy about your best friend or neighbor knowing some fact about you, then don't reveal it online. I have no problem detailing my investment returns or revealing how much my home and car cost, but I'm never going to admit my weight."

Pant is also careful to avoid revealing her home address, mother's maiden name and last four digits of her Social Security number online. She suggests that anyone concerned about identity theft should remove their date of birth from their Facebook profile as well.

Shafique has built in some privacy measures to the Linkagoal platform by offering the option to keep goals private or shared only among a small group of friends. "The platform understands that there are some personal things you don't want to share, but you still want to write it down," he says.

For users who share their goals publicly using their full names, their Linkagoal accounts can come up for anyone who runs a Web search on their name -- something hiring managers are likely to do. When Robinson graduates and starts job hunting, his future boss might learn about his ambition for saving money and getting good grades. As long as he's posting professional goals that aren't embarrassing, his public profile probably doesn't pose much of a risk. If he changes his mind, though, he can always opt for greater degree of privacy.

Whelan suggests that before anyone sets a goal, they ask themselves why they want to achieve it. "Beginning with your larger purpose helps keep you on track for success and makes accomplishing the goal more meaningful," she says. "For a financial goal, what does it mean to you to pay off your debts? ... Those bigger purpose-based questions are what will keep you going as you work toward your goal."

Kimberly Palmer is a senior editor for U.S. News Money. She is the author of the new book, "The Economy of You." You can follow her on Twitter @alphaconsumer, circle her on Google Plus or email her at kpalmer@usnews.com.

 

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5 Best and Worst Things to Buy Generic

June 29, 2015, 10:00 pm

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Filed under: Retail, Shopping, Consumer Goods, How to Save Money, Products

By Caroline Hailey

Whether you're single or married, have a large or small family, finding ways to save money is always a challenge. And with so many generic options out there, it's often tempting to just buy cheaper products and save your money for something else.

But cheaper doesn't always mean better.

So, how can you know what brand names are worth the higher price tags and which ones just aren't? Follow these tips so that the next time you go shopping, you'll known when to go for quality and when to focus on your bottom line.

5 Best Things to Buy Generic

1. Cereal. Eating a bowl of cereal each morning is a quick and cheap way to make sure you and the kids get breakfast before dashing out the door. For every brand name of cereal out there -- Cheerios, Raisin Bran, Corn Flakes, Apple Jacks and so on -- there seems to always be a generic version right next to it on the shelf with an almost identical name. And it's not just the name that's nearly identical; the product itself normally is, too. So why bother spending more just to get the name brand?

Take Corn Flakes, for example. The brand name version is Kellogg's Corn Flakes cereal and it will run you $2.98 for an 18-ounce box at Walmart. Go for Great Value's Corn Flakes cereal instead, and you'll only spend $1.98 for the same-sized box. There isn't much difference in taste, and some people even prefer the generic brand. Depending on how much cereal your household goes through in a month, this small change could add up to serious savings.

2. Spices and Seasonings. Skipping dinners out and cooking at home is a great way to save money. You don't have to pay tax and tip, and the food itself isn't only cheaper, but probably healthier as well.

To try to make your meals taste as good as the food you get at a restaurant, you'll want to take advantage of a variety of spices to use on chickens and other meals. But just because spices can make a big difference in the kitchen when it comes to taste, that doesn't mean you should be spending more than you need to on them.

If your recipe calls for basil, you could be paying $2.96 for the McCormick brand name bottle at Walmart. Instead, grab Great Value's generic brand, and you'll only have to pay $2.24. It might not seem like a huge difference, but those 72 cents can add up over time.

3. Diapers. When it comes to babies, all parents want what's best. It certainly makes sense to buy the brand name of baby food and other baby products, but not everything we buy for our babies is worth the brand-name price. Because babies go through so many diapers each day -- not to mention each month -- the generic brand will do just fine and save you a pretty penny.

If you buy the 88 pack of Huggies Little Snugglers, you'll be shelling out $24.99. Choose the Target generic brand instead, called up & up, and you can get 144 diapers for $28.99. When you break down the price by individual diaper, that's about 28 cents a diaper versus about 20 cents a diaper. You'd save almost a dime each time you change your baby's diaper.

4. Medications. Many of us take medications, and many of us spend much more money on those medications than we should. As Business Insider points out, brand-name and generic drugs are both well-formulated, effective and have to go through the same rigorous tests for approval. But the difference in pricing is often staggering.

Take aspirin and ibuprofen, for example. At Walgreens, you can buy a bottle of Advil with 100 tablets (200 milligrams) for $9.99. Its store brand bottle of 100 tablets (also 200 milligrams), however, only costs $7.29. That's a savings of $2.70.

5. Gas. For commuters who drive to work every day, gas can be a major monthly expense. It can also be an opportunity to save when you choose the generic brand at certain places, like Costco.

Fill up your car at a Chevron located in California, and you might pay $4.79 a gallon for regular gas in some parts of the state. Opt instead for the Costco brand, and you'd only spend around $2.85 a gallon, saving you $1.94 a gallon. If your car holds 15 gallons of gas, that would equal a savings of $29.10 each time you fill up.

5 Worst Things to Buy Generic

1. Trash Bags. While it might be okay to buy the generic brand of some cleaning and kitchen products, skimming when buying trash bags can end up costing you.

A box of Glad Tall Kitchen Quick-Tie Trash Bags costs $11.99 for 106 bags at Target, slightly more than the up & up brand, which goes for $10.79 for 110 trash bags. You'll save more than $1 on each package by buying up & up, but you don't want to sacrifice quality when you're talking about keeping smelly trash contained. The Glad trash bags have gripping drawstrings and are more heavy duty; the up & up bags are flexible, but they have less-reliable flap ties.

2. Toilet Paper. Just like with trash bags, don't be too cheap when buying toilet paper. Brand name toilet paper is much better quality, won't break apart and is less likely to cause irritation when using it. As an added bonus, you can often find brand name toilet paper at a great price.

If you go with the up & up generic brand at Target, you would pay $6.79 for 24 regular rolls of toilet paper. Go for the brand name Quilted Northern Ultra Plush version, and you will only have to pay 20 cents more. Trust us, your you-know-what will thank you.

3. Major Electronics. While you can save some serious bucks when choosing the cheap version over the brand name for big electronics, you won't be getting the bang you want. The extra money spent on brand-name TVs and other electronics is worth it, considering these items typically come with much better customer service and support than the cheaper options.

So, although a 40-inch Insignia TV at Best Buy would be nearly $190 cheaper than the Samsung one ($279.99 vs. $469), you'll be regretting your money-saving decision when you have to deal with the less-reliable customer service as soon as something goes wrong.

4. Batteries. Much like major electronics, cheaper batteries can cost you in the long run. Yes, you can save a lot when it comes to buying the generic brand. It costs only $3 for eight DG Home AA batteries at Dollar General compared to $6.37 for Duracell at Walmart. But when you're powering items like speakers, generic batteries might not have enough juice to make them work properly. And with other products, the brand-name batteries will typically last you much longer.

5. Cheese. While good cheese can definitely be a bit pricey, it's one food product that is worth the extra money. For cheese lovers, the generic taste just won't cut it though, and as many of us know, there aren't too many things worse than bad cheese.

An 8 oz. package of Great Value Sharp Cheddar Sliced Cheese can cost $2.47 at some Walmart stores. Meanwhile, Sargento's 8 oz. package of Natural Deli Style Sharp Cheddar Cheese slices can cost $2.50. It's only 3 cents more -- go with the Sargento cheese. Your taste buds will thank you later.

This story originally appeared on GOBankingRates.com.

 

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How Does Your 401(k) Stack Up?

June 29, 2015, 10:00 pm

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Filed under: Careers, Personal Finance, Retirement Plans, 401K

By Emily Brandon

A good 401(k) plan can help propel you to a secure retirement. Your 401(k) plan often gives you a tax break, employer contributions and investment growth, all at the same time. But some 401(k) plans have such high costs and poor investment options that much of the tax break is canceled out. Here's how to tell if your 401(k) plan is worthwhile.

The 401(k) match. Most Vanguard 401(k) plans (94 percent) provide employer contributions, according to a Vanguard analysis of 1,900 401(k) plans with 3.6 million participants. The most common 401(k) match is 3 percent of pay, which 37 percent of companies offer to savers who meet the requirements. The analysis found a match of 4 percent of pay (18 percent) and 2 percent (14 percent) are also common. A few firms (14 percent) provide employer matches worth 6 or more percent of pay.

Savings needed to get the match. In order to get a 401(k) match, you often need to meet specific savings goals. The most popular savings requirement for Vanguard 401(k)s is 6 percent of pay (44 percent of plans), but 4 percent (15 percent) and 5 percent (19 percent) are also common requirements to get the entire 401(k) match on offer. Some plans even ask employees to save 10 percent or more in order to get the maximum possible 401(k) match. "The most import thing is making certain you meet your match," says Carolyn McClanahan, a certified financial planner for Life Planning Partners in Jacksonville, Florida. "A lot of people who don't put anything in their 401(k) plan are missing out on free money."

The plan's match formula also plays a role in how easy it is to get the 401(k) match. Vanguard administered 401(k) plans with 225 different match formulas in 2014. The most common 401(k) match is 50 cents for each dollar saved up to 6 percent of pay, and 25 percent of plans have this match. Using this formula, a worker earning $60,000 per year would need to save $3,600 to get the maximum possible 401(k) match of $1,800. If that worker is only able to save 2 percent of pay, or $1,200, he will only get a 401(k) match of $600, and will be forfeiting the additional $1,200 he could have gotten if he were able to save more. New workers are frequently automatically enrolled in 401(k) plans at a default savings rate that is typically lower than what you would need to save to get the entire match. "If you are being automatically enrolled into a plan, something to be aware of is that default is likely going to be significantly lower than what you could set it at to get the maximum match," says Barbara Butrica, a labor economist and senior fellow at the Urban Institute.

When eligibility begins. Just over half (58 percent) of 401(k) plans allow employees to contribute to the plan with their first paycheck. But some employers make workers wait between two and six months (21 percent) or even a year (15 percent) before they are eligible to contribute any money to their 401(k) plan, Vanguard found. The waiting periods are even longer to get a 401(k) match. Just under half (47 percent) of employers immediately begin paying a 401(k) match to new hires, but over a quarter (27 percent) of plans require a year of service before providing any employer matching contributions. "Often there is a waiting period to get a match, and sometimes there is a waiting period to be eligible to participate in the plan," Butrica says.

How soon you can keep your match. Watching employer contributions accumulate in your account does not necessarily mean you will get to keep them if you quit or are laid off from your job. Company contributions don't belong to you until you are vested in the 401(k) plan. Just under half (47 percent) of 401(k) plans offer immediate vesting of employer contributions, Vanguard found. Some 401(k) plans don't allow you to keep any of the 401(k) match until you have a specific number of years of job tenure, such as three years (10 percent). Other employers allow you to keep a gradually increasing percentage of the company contributions based on your years of service, but you typically don't get to keep all of it unless you stay with that employer for five (18 percent) or six (14 percent) years. "You can always get back your own contributions, but the different vesting periods will determine how long you have to wait before you can get back the employer match," Butrica says.

Additional employer contributions. In a minority of 401(k) plans there are other types of employer contributions, such as profit-sharing or company stock. These contributions might be made regardless of whether the employee saves in the plan. The median non-matching contribution was 4.4 percent of pay, but 16 percent of employers contributed 10 or more percent of pay. Half of plans provided these contributions based on a percentage of pay, while others varied the contributions based on age or job tenure. Just over a third (37 percent) of Vanguard 401(k) plans provide both matching and non-matching contributions.

The Roth option. Slightly more than half (56 percent) of Vanguard 401(k) plans now offer an after-tax Roth 401(k) option, up from 42 percent in 2010. While you can't deduct Roth 401(k) contributions from current income, withdrawals from these accounts in retirement can be tax-free. "The people that are most likely to use it are younger people and people with shorter job tenure," says Jean Young, a senior research analyst for the Vanguard Center for Retirement Research.

Low-cost investment options. Selecting low-cost investment options will help your money grow faster. "Individual participants can now learn more easily what all the fund expenses are," says Joel Kelley, a certified financial planner for Woodstone Financial in Asheville, North Carolina. Index funds are growing in popularity as 401(k) participants aim to keep their investment costs low. About half (52 percent) of Vanguard 401(k) plans provide at least four low-cost index funds as investment options, up from 28 percent in 2005.

Vanguard plans offered an average of 27 investment options in 2014, up from 19 in 2005, largely due to the increased use of target-date funds. But the average number of funds actually used by participants has declined to 2.9 last year from 3.5 in 2005. "Participants are using fewer funds. At the median it is two, and sometime this year we expect it to go to one," Young says. "They are using a single target-date fund or a single balanced fund."

Emily Brandon is the senior editor for Retirement at U.S. News. You can contact her on Twitter @aiming2retire, circle her on Google Plus or email her at ebrandon@usnews.com.

 

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