This Week In Your Wallet: The Greatest Challenge for Retirees

This Week In Your Wallet:
The Greatest Challenge for Retirees

In the days since the collapse of Silicon Valley Bank and Signature Bank, there’s been news of other financial institutions on the brink, namely Credit Suisse, which was bought out yesterday by UBS, and First Republic, which continues to teeter as we speak.

Maybe you opened a new account to diversify your institutions or shifted some money to one of the 8 SIBs in the country (Systemically Important Banks). These are banks that are considered “too big to fail” and are subject to greater scrutiny and regulation to ensure their structure is sound. (JPMorgan Chase, Citigroup, Morgan Stanley, etc.) Perhaps you also checked the balances of your accounts to see where you stand regarding the maximum $250,000 insured by the Federal Deposit Insurance Corporation (FDIC).

The Wall Street Journal’s Imani Moise dove into the details on that last one, and offers an example on how savers can boost that $250,000 limit. “A married couple,” she writes, “is eligible for $500,000 protection on a joint bank account and $250,000 for each of their individual accounts, for a total of $1 million in coverage at a single bank.” She also lays out a few ways to protect liquid assets of more than $250,000. Those include adding custodial accounts for children, investing in bonds, opening credit union accounts and something for those with high net worths known as deposit swapping.

With deposit swapping, Moise writes, “networks such as IntraFi Network LLC work with multiple banks to separate large deposits into amounts below the federal insurance limit and can protect balances up to $150 million. Using a network allows customers to get the insurance benefit of having multiple banks while dealing with only one bank.” The FDIC also has a handy calculator available to help estimate your total coverage. It’s worth a look.

Gen Z’s Inflation Cohabitation Conundrum

Squeezed by soaring rent prices and the rising cost of just about everything, members of Gen Z (those born between 1997 and 2012) have been moving in together at record rates, per new Census Bureau data. Bloomberg reporters Augusta Saraiva and Paulina Cachero write that more than 11% of American 18- to 24-year olds — some 3.2 million young people — “lived with a romantic partner who’s not a spouse last year, the highest share ever.”

Galena Rhoades, a psychologist at the University of Denver, told Bloomberg “When there’s a stressful event, especially one like a pandemic that also requires social isolation, we see people making more moves in relationships. The pandemic in some ways made it easier to move in together and harder to break up.” Unfortunately, rushing a relationship to the next level doesn’t always end well. A Realtor.com survey of Gen Z couples found that 42% of respondents who moved in with a romantic partner ultimately regretted the decision. And 48% of those surveyed later broke up. The lesson? Moving back in with your parents or another relative may not be exciting, but it could certainly be easier on your finances and your love life than moving in with a partner prematurely.

Harvard Study Uncovers Retirement Challenge

Back in 1938, some 724 male teenagers from various countries were selected for what became an 85-year study on happiness. Every two years since its launch, the Harvard Study of Adult Development has checked in with participants (and their family members) to gather insights as they age. Questions about retirement eventually became part of the survey, “The No. 1 challenge people faced in retirement was not being able to replace the social connections that had sustained them for so long at work,” noted the authors in an interview on CNBC.

Enter Henry Keane, who threw himself into volunteering and hobbies once his factory job ended. At 65, he told the researchers he needed a job so he could be around other people. “Keane’s realization,” writes Schulz and Waldinger, “teaches us an important lesson not only about retirement, but about work itself: We are often shrouded in financial concerns and the pressure of deadlines, so we don’t notice how significant our work relationships are until they’re gone.” Want to feel fulfillment later in life? Cultivate friendships that extend beyond the office, and remember you don’t have to drop out of the workforce when you hit your late 60s. Part-time positions can offer a sense of purpose and allow you to be around others on a regular basis.

The Era of Buying Bucket-List Tickets

When’s the last time you bought tickets to a special event? Was there a $20-per-ticket “convenience” fee tacked on to the price? (HerMoney’s Editor-in-Chief just made a special trip to the box office of Phantom of the Opera, which is closing after 35 years on Broadway, to avoid paying a whopping $80 in fees to buy online. With one $2.75 subway fare, she walked away successful.)

Concert tickets have been in the news a lot lately, with President Joe Biden calling on Congress to end these fees charged to see shows at venues across the U.S. Ann Carrns, a reporter for The New York Times, says her experience securing seats for a Bruce Springsteen concert, where she watched prices climb and then later drop, changed how she will approach paying for shows in the future.

“If you want tickets to a big, highly promoted arena show, whether it’s Bruce or Beyoncé, set a budget and register for the sale,” she writes. “If there are tickets you can afford, buy them. If not, log off and bide your time. Decent seats may well be available at better prices when the concert date nears.” Why? As she explains, demand is often highest when tickets first go on sale. Those who register will typically be notified if additional tickets become available. Or, you can go old school and do one of two things: Make a note on your calendar to check availability as the show date approaches, and if the venue has a box office, pop by and see if there’s a way to buy tickets in-person to avoid fees. Or, in the case of Broadway, there may be an opportunity to snag rush or lottery tickets.

Have a great week,

Jean

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