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| Stat Of The Day |
| $757 |
| If you and your partner aren’t coordinating your retirement contributions, you might be leaving money on the table – specifically, $757 annually, on average. A new study from the Center for Retirement Research at Boston College found that 1 in 5 couples miss out on their full employer 401(k) match simply by not prioritizing contributions to the more generous one. |
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| This Week In Your Wallet |
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AI is hitting your wallet – hard. Experts say there are four categories of goods and services getting more expensive because of artificial intelligence, and your power bill could be one of them. In states where data centers are going up, like Maryland, the average monthly electric bill has jumped from $122 in 2022 to $181 today. The ripple effects go further: The University of Maryland recently announced it laid off nearly 100 people, citing financial challenges, in part caused by soaring energy costs.
Social Security’s runway is getting shorter. The newly released Social Security and Medicare Trustees' annual report projects that the fund that pays benefits to retirees and survivors of deceased workers could see its reserves run out by the end of 2032 – one quarter sooner than last year’s estimate. If Congress doesn’t act by then, the Old-Age and Survivors Insurance (OASI) Trust Fund would only be able to pay out roughly 80 cents on the dollar. As Yahoo Finance reports, a few fixes have been floated: raising payroll taxes, increasing the retirement age for younger workers, or lifting the earnings cap, which currently stands at $184,500 in 2026. "Congress has only two options to address the projected shortfall: Bring more money into Social Security, or cut benefits," says Nancy Altman, president of the advocacy group Social Security Works.
The real cost of becoming a parent after 40 isn’t just things like diapers and eventually, college tuition – it could be the ER visits. The Wall Street Journal took a look at the growing trend of later-in-life parenthood, and the upsides are real (more patience, more financial stability, more perspective), but so are the surprises – especially those of the financial sort. Take Ed Myrick, 58, who has an 8-year-old son. A very active dad, he’s already undergone two surgeries following a trampoline accident and suffered a torn bicep from building an electric toy car. "The medical bills have eaten into the savings he was counting on for retirement," reports the WSJ. |
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| Things That Save You Money |
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You could shell out $50 for this necklace at Anthropologie… or spend $50 on supplies to make one for yourself and four for your besties. HerMoney reader Sarah sent us a photo of her handiwork and honestly? We’re inspired. |
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Never underestimate a programmable thermostat. HerMoney reader Anie is a true believer. "Daughter home early and it's cold outside? I can turn the heat up an hour before she arrives," she shares. "Suddenly warmer today but I won't be home until 6? Turn it off instantly." Set it, forget it, save money. |
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Going sidewalk shopping? Here are the best cities in the U.S. for finding free furniture. Just be sure you know the dos and don’ts of buying secondhand. |
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| Your Financial Anxiety Is Lying To You |
Americans now expect to delay retirement by four years. Four in ten aren’t confident their savings will last. And a new study found people think they need 15% more for retirement than they did just a year ago.
Feeling your blood pressure rise? Take a breath. Because here’s what 300 years of American financial history has to say: we’ve been here before, and generation after generation has come out the other side.
That’s the argument Joseph S. Moore, PhD, makes in his new book, How to Get Rich in American History: 300 Years of Financial Advice That Worked (and Didn’t). Moore sat down with Jean on the HerMoney podcast to talk about what history actually teaches us about saving for retirement – and why the math might be more reassuring than you think.
At the heart of Moore’s book is a concept he calls "retirement stacking" – and it predates Social Security by generations.
"One of the myths I bust in the book is the idea that no one retired before Social Security," he said. "They absolutely retired before Social Security. One of the things people did was try to create legs on a stool, studs in a wall, or some kind of support system that would balance out over time. Sometimes it was land. Sometimes it was businesses. People were basically putting money away into plans that would help them survive their old age."
Still not feeling confident? Moore encourages people to take a hard look at the numbers. "If you just tried to retire on the median 401(k) balance, in every historical scenario you run, you’re out of money by the age of 71," he explains. "And yet, if you combine that with Social Security, which is also a meager thing to live on, the most common scenario is that the average retiree dies with more money than they started with." |
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History says you can reach your retirement goals. A good advisor says the same thing – and helps you put together a plan to actually get there.
Willow connects women with vetted fiduciary advisors who specialize in wealth-building, financial planning and making the numbers a lot less scary. Take this short quiz to meet your match. |
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| Ask Jean |
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| Q: |
Today’s question comes from Taylor. She writes: I ended up owing a lot of money in taxes this year. How do I know what my withholding should be…and how often should I be looking at it? |
| A: |
The goal is to get your withholding as close as possible to your actual tax liability. If you consistently get a large tax refund – or you typically owe a big chunk of money – your withholding is probably off. Too high and you’re giving the IRS an interest-free loan all year. Too low, and as you’ve experienced, you’re hit with a surprise bill come April.
The easiest way to recalibrate is by plugging your numbers into the Tax Withholding Estimator on the IRS website. As for how often to review your withholding, once a year is usually enough, but make it a priority after any major life change – for example, getting married, divorced, welcoming a new child into your family, etc. Your W-4 isn’t a "set it and forget it" situation. Make it a yearly habit – your future self (and especially your April self) will thank you. |
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| Submit your questions to Jean here. |
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