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Stat Of The Day
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497,000
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Friday is National 401(k) Day. Yeah, it’s a thing – and a growing number of people have reason to celebrate. New data from Fidelity shows roughly 497,000 of 401(k) accounts boast balances of $1 million or more, a new record.
Not everyone is poppin’ the champs, though, as many people are playing catch-up with their retirement savings. If you’re one of them, check out our special FinanceFixx class JUST for pre-retirees, kicking off on 9/10. Don’t forget to use code LDW24 at checkout to take advantage of our extended Labor Day Sale and a steep discount!
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How To Be Single, Secure And Thriving
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Spoiler alert: aging is challenging. For those who are single, the process can be even more difficult, and more expensive. Dr. Bella DePaulo knows this firsthand. A social scientist and leading expert on single life, she is what she calls, "single at heart." Or in other words, someone who thrives "because they are single, not in spite of being single."
In part, this means acknowledging that financial security can be one of the biggest hurdles. The financial inequalities of being single not only can put a strain on day-to-day budgeting, but also on saving for retirement. In the latest study from the Alliance for Lifetime Income, 67% of single women in the Peak 65® Zone said they have less than $100,000 in assets.
While in many cases the deck is stacked against them, DePaulo says there are things singles can do to ease financial stress, starting with being uber-careful when it comes to spending. "I made a deal with myself that I would be careful…so I would no longer be so free to say, travel for reasons that are just for fun, rather than business-related travel that somebody else might pay for," notes DePaulo. (She tries to tack fun weekends onto those trips.)
For more of DePaulo’s advice on how singles can thrive through the years, click here.
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This Week In Your Wallet
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Having a bully boss can be more than just soul-crushing. It can take a financial toll, too. "Many people resign — sometimes without another job — because they can no longer tolerate a bullying boss," writes Michelle Singletary for The Washington Post. "Others retire sooner than planned, giving up a measure of financial security to preserve their mental health." It can cost employers too, as it’s estimated U.S. businesses take a $1 trillion hit annually thanks to high turnover. What can be done? According to a recent report, 42% of employees leaving their jobs say they could have been persuaded to stick around, had their employers treated them with respect and shown concern for things like well-being and employee happiness,
reports The Post.
There aren’t enough hours in the day. That’s especially true for an increasing number of people who are holding down two jobs, as The Wall Street Journal reports. "One story is that people are short of cash, and they need extra hours and the only way to pick up extra hours is by picking up a short-term job," says Christopher Taber, chairman of the economics department at the University of Wisconsin, Madison. "Another story is that it’s easier to work two jobs now than it was before." According to government data, those who moonlight are more likely to be widowed or divorced. That’s the case for Chanda Corkrean, 41 and divorced, who has a WFH job with a medical supply company and a side gig at Pizza Hut. "She used to have no savings but has now been able to put away about $2,000 and is working to eliminate her
debt," reports the WSJ.
Give up shopping? Not a chance. Shop a little less? For most, that’s much more doable and can be done with advice from people who love (we mean like really love) to click "add to cart." One tip–run your potential purchase by a "trusted third party" before you buy. "I encourage people to find a few close friends who know what your goals are, know your personal style and are willing to gently hold you accountable when you really want something," Marielle Elizabeth Terhart, a plus-size fashion consultant tells The Cut. "I have one friend who’s great at this. I’ll text her a link and she’ll be like, ‘You already own that’ or ‘Where on earth are you going to wear it?’ And she’s always right."
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Ask Jean
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Today’s question comes from Andrea. She writes: I was unexpectedly victim of a mass layoff last week. Is it better to leave the money in the 401(k) that is with my previous employer until I find a new job? Or should I roll it into my personal Roth IRA now?
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First off, I’m sorry to hear you lost your job. When it comes to your 401(k), know that you don’t need to make any decisions immediately. There are some important things to consider before you take action, the most important being the tax hit you will take if you decide to move forward with the rollover to your Roth IRA, as you mentioned.
Because you’ve yet to pay taxes on the funds in your 401(k), when you roll it over into a Roth IRA, it will trigger a "tax event," as Roth IRAs are funded with income that has already been taxed. You won’t pay taxes on the money when you start withdrawing it in retirement, but as mentioned, you’ll be forced to pay taxes on any 401(k) funds you roll over, which could hit your budget extra hard, especially since you’re unemployed.
If you do go this route, there are ways to mitigate the tax hit, and those are best talked through with a tax professional. Using this tool from the IRS could be a good way to ID a tax pro with the credentials you’re looking for.
If the taxes sound onerous, one alternative would be to open a traditional IRA and roll it into that instead. There won’t be taxes owed since the tax treatment on that account is the same as a traditional 401(k). Or, as you mentioned, you could leave the money right where it is, then, when you find work, roll it over into your new employer’s plan. One thing you will most definitely want to avoid doing is cashing out. With a traditional 401(k) plan, you’ll suffer not only the tax hit, but also a 10% fee for early withdrawals if you’re younger than 59 and a half.
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Submit your questions to Jean here.
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Things That Save You Money
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Power Of The Purse: How Department Stores Paved The Financial Way For Women
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From Bonwit Teller to Lord & Taylor, decades ago, department stores were not only places where women shopped but also where women had power — power they did not have elsewhere at the time.
In her new book: "When Women Ran Fifth Avenue: Glamour and Power at the Dawn of American Fashion," Julie Satow, who recently joined Jean Chatzky on the HerMoney Podcast*, takes a deep dive into the department stores of yesteryear and the incredible women who were behind their success, including three who rose to the top of their respective department stores and paved the way for other women.
"Women really weren't even supposed to be walking on the sidewalks without a male chaperone and suddenly these stores provided an opportunity for women to congregate in public, to go shopping, to do this new pastime of window shopping, and they had the money," Satow says.
Listen in to hear the surprising stories behind the powerful women who sat at the helm of our most beloved department stores, and how they blazed trails for today’s working women, here.
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| The HerMoney Podcast is made possible by Edelman Financial Engines.
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More For You To ♥
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📣 Pre-retirees! Do you have your spending plan ready? A new chapter calls for a new budget. We can help. Our next budgeting and financial coaching program starts on Tuesday, September 10th. It’s called FinanceFixx, it’s virtual, and the average participant finds $1,500 worth of savings over the 8-week program. We extended our Labor Day sale for you: use code LDW24 at checkout. (Psst...this works for the October session, too!)
💛 Thank you to Gainbridge® for supporting the HerMoney podcast. Gainbridge® created ParityFlex™, a multi-year guaranteed annuity¹, to offer women security and flexibility at a time when they need it the most—retirement. Learn more about ParityFlex™ 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.
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*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. AM3625086.
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.
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**This is a sponsored post
¹ Withdrawals are taxed as ordinary income and, if taken prior to age 59 1/2, there may be a 10% federal tax penalty. Withdrawals may result in a surrender charge or a market value adjustment (MVA) and excess withdrawals may result in a reduction of future payments under the guaranteed lifetime withdrawal benefit. Guaranteed Lifetime Withdrawal Benefit provided so long as your account value hasn’t gone to $0 due to excess withdrawals. Annual Percentage Yield (APY) rates are subject to change at any time, and the rate mentioned may no longer be current. Please visit Gainbridge.io for current rates, full product disclosures and disclaimer. ParityFlexTM, a multi-year guaranteed annuity, is issued by Gainbridge Life Insurance Company in Zionsville, Indiana.
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