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| Middle Class, Major Moves: How Savvy Savers Are Winning The Retirement Game |
We get it. Saving for retirement is hard. There’s one demographic though that’s doing an extra good job of sticking to their money habits…and it’s paying off.
In a new survey from Principal Financial Group®, middle-income households are generally applying strong retirement savings habits and behaviors, even as they balance competing financial priorities.
According to the survey, Principal® Real Life Retirement Journeys, 77% of middle-income households are saving for retirement at an average rate of 7.8% of their income before receiving additional contributions from their employers. Additionally, 40% of the middle-income households surveyed anticipate their retirement will be better than the one they first envisioned.
"Americans should be encouraged to know the priority they have placed on saving for retirement is meaningful and beneficial to their futures," said Teresa Hassara, senior vice president of workplace savings and retirement solutions at Principal. "Many are within range of a recommended minimum savings rate of 15%¹ when you include the typical employer match of 4-6%, which helps put them on the right path for a secure retirement."
More than half of those surveyed said their retirement aspirations were first influenced by family members (65%) and/or friends or peers (52%). However, the survey found employers, financial professionals, and retirement plan service providers to be increasingly more helpful sources of information once they started on their saving journey. |
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| This Week In Your Wallet |
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Does your financial life = an episode of Hoarders? There are easy ways to clear the clutter, starting with taking stock of all your accounts, and then, seeing how you can simplify. "Having too many accounts is difficult to keep track of, especially with old 401(k)s from past employers, those might be worth rolling over into an IRA," writes Julie Fox for HerMoney. "Did you open up a credit card to score some extra travel reward points? Those cards might be worth closing, especially if you’re paying annual fees." The next step? Set up a "life binder" (which can be digital, or IRL) that organizes all your financial docs in one place. "Even if you end up keeping all of these accounts open, just being able to easily access and locate information is an important step towards clearing clutter and obstacles from your finances."
Everything old is…a better deal again. That’s true with used vehicles, which have seen prices drop 6.2% in the first three quarters of 2024. "Buyers could save a record $20,000, on average, by choosing used over new, according to Edmunds’s analysis of third-quarter sales," reports The Wall Street Journal. "The gap was closer to $15,000 a few years ago." That said, owning a fresh set of wheels (whether new or used) hasn’t gotten any less pricy. "Insurance, maintenance and repairs have all grown more expensive," notes the WSJ.
Love it or hate it, the GOP has officially secured a clean sweep of the 2024 election. What could it mean for the stock market? "Over about a century, the S&P 500 and its predecessors had roughly double the returns during periods of unified GOP control, compared to periods with a Republican president and Democrats leading at least one house of Congress," reports Ben Berkowitz for Axios. If you’re getting your hopes up, not so fast. "As any savvy investor will tell you, past performance is no guarantee of future results," adds Berkowitz.
Psst…the election’s impact on your portfolio is just one of the topics we’re diving into in InvestingFixx, HerMoney’s investing club for women. For example? How big a deal is it that Oracle’s Larry Ellison is tight with the President-elect? Is the Musk bromance good or bad for Uber shares? Whether you’re a stock market newbie or a Warren Buffet in training, this club is for you. Join us here. Your first month is FREE! |
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| Things That Save You Money |
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Sip, sip, hooray! Starbucks has lifted its surcharge for adding non-dairy milk to orders. In other Starbys news, the chain is also bringing back self-serve cream and sugar stations. How sweet. |
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Your move, Temu. Amazon has launched a new online discount store, where all items are less than $20. |
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It’s a money-saving hack that airlines hate and travelers love. We’re talking about "skiplagging," which involves buying an airline ticket with a layover that’s actually your final destination. The New York Times sat down with the father of skiplagging, Aktarer Zaman, who dishes on what you need to know before you give it a go. |
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| Ask Jean |
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| Q: |
Today’s question comes from Krista. She writes: My 60-year-old mom is concerned about online safety and specifically the safety of her financial accounts. Where’s the best place for guidance on how seniors can stay safe online? |
| A: |
Thanks for your question, Krista – and you’re smart to be cautious, as an increasing number of older Americans are falling victim to financial scams. According to the FBI, "Scams targeting individuals aged 60 and older caused over $3.4 billion in losses in 2023—an increase of approximately 11% from the year prior." Oof.
So, what’s an older person (or a daughter looking out for her mom), to do? Make sure her credit (and yours, btw) is frozen. Then, get familiar with the different types of scams and best practices for online safety. Here are a few resources to get you started: |
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| For some seniors, in-person learning is best. I’d recommend looking into programs or seminars in your community that help arm seniors with the knowledge they need to stay safe online. Your local library, or senior center, if you have one, would be good places to start. |
| Submit your questions to Jean here. |
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| We maintain a strict editorial policy and a judgment-free zone for our community. We strive to remain transparent in everything we do. Website posts and newsletters may contain advertisements, links and mentions of products from our partners. Learn more about how we make money. |
*The HerMoney podcast is proudly sponsored by Edelman Financial Engines. Unlock your wealth potential with our sophisticated wealth planning. Continue your journey at EdelmanFinancialEngines.com. Sponsored by Edelman Financial Engines – Modern wealth planning. All advisory services offered through Financial Engines Advisors L.L.C. (FEA), a federally registered investment advisor. Results are not guaranteed. AM3807168.
HerMoney is not a client, agent, representative or affiliate of EFE.Edelman Financial Engines ("EFE") is a sponsor of the "HerMoney with Jean Chatzky Podcast," created by HerMoney Media. Inc. ("HerMoney") and provides cash compensation to HerMoney Media. HerMoney receives a sponsorship fee from Edelman Financial Engines depending on the number of podcast downloads, as measured by the end of the calendar year. The sponsorship fee is paid on a quarterly basis each year. In turn, HerMoney also provides promotional deliverables regarding EFE on the HerMoney podcast, newsletter, and social media channels. Due to this sponsorship arrangement, HerMoney has an incentive to endorse EFE and its services. |
**This is a sponsored post
¹ Based on analysis conducted by the Principal Financial Group®, October 2024. The estimate assumes a 40-year span of accumulating savings and the following facts: retirement at age 65; 15% individual rate including employer contributions; Social Security providing 40% replacement of income: 4.5% withdrawal of retirement savings; 6% annual market returns; 2% annual inflation; and 3% annual wage growth over 40 years in the workforce. This estimate is based on a goal of replacing about 80% of salary. The assumed rate of return for the analysis is hypothetical and does not guarantee any future returns nor represent the return of any particular investment. Contributions do not take into account the impact of taxes on pre-tax distributions. Individual results will vary. Participants should regularly review their savings progress and post-retirement needs as savings depends on many factors, including lifestyle, Social Security replacement, and retirement age. |
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