Trending Finance Topics

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Trending Finance Topics: Retirement

Retirement age expectations versus reality, coping with unplanned retirement, and new meaning of retirement are some of the most popular financial topics/online conversations currently trending around retirement. The requested information about the topics is presented below.

Retirement Age Expectations versus Reality

  • A growing mismatch between the age at which many Americans expect to retire and the real age at which they actually retire is evident. According to recent statistics, many Americans are forced to retire earlier than their expected retirement ages for various reasons.
  • Many working Americans expect to retire at the age of at least 66 years, an increase from the projected age of 63 years in 2002.
  • Several financial planners think that 63 years is the ideal age for retirement. Their argument for late retirement age is based on the premise that retiring late increases the retirement savings considering the longer lifespans of Americans today.
  • However, in reality, majority of the American workers do not retire at 65 years or above. In one survey by the Employee Benefits Research Institute conducted in 2018, the median age of retirement was 62 years.
  • According to scientists and researchers, both positive and negative developments determine the actual age of retirement for most Americans.
  • On the positive side, some people are retiring younger because of having more wealth such that they have the means to support themselves after retirement.
  • However, for the majority of Americans, negative developments in terms of poor health and loss of jobs are the underlying reasons.

Coping with Unplanned Retirement

  • The reality of unplanned retirement in America is a trending topic in the US. According to financial and retirement analysts, coping with forced early retirement is a major concern for many Americans, especially those who had not planned for it.
  • Some analysts note that unexpected retirement could bring self-doubt and fear in the vision of the carefree golden years for most people.
  • As a result of the growing concerns, financial and retirement experts have provided many recommendations on how to cope with the predicament of unexpected early retirement.
  • Financial experts recommend reviewing one’s financial situation by figuring out one’s cash flow, monthly expenses, and retirement account statements. This will allow one to reevaluate their existing retirement plan based on their real financial situation.
  • Some experts recommend adjusting one’s financial lifestyle by avoiding unnecessary expenses such as travel, vacations, expensive restaurant dinners, and gold membership among others.

New Meaning of Retirement

  • Retirement in the American society is gaining a new meaning as observed by financial and retirement experts. Apparently, the nature and meaning of retirement has evolved significantly over time.
  • While retirement in the past meant time to relax from active involvement in work after reaching a particular age, especially 65 years, it is more about maintaining a busy and happy lifestyle today.
  • Owing to these changes, a universal definition of retirement seems nonexistent.
  • Many older workers are not retiring fully as was the case in the past. Rather, analysts have found that almost half of the retirees intend to work in their retirement.
  • Some of the types of work that the retirees consider during their retirement include pet sitting, small businesses, teaching, volunteering, consulting, or short-term jobs like working as drivers for ride sharing companies.
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Part
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Trending Finance Topics: Personal Finance

Lack of personal savings, growing personal debt, and COVID-19 stimulus check and personal finances are some of the most popular topics/online conversations currently trending around personal finance. The requested information about the topics is presented below.

Lack of Personal Savings

  • Many Americans do not have personal savings for short and long-term needs. With no personal savings for emergencies, many are taking personal loans to cater for such expenses.
  • The lack of personal savings is ultimately responsible for the rising personal debts. Similarly, the accumulation of personal debts is exacerbating the increasing problem of lack of personal savings.
  • A survey by Bankate found that 21% of Americans are not saving citing debts as the main reason. Economists in the country expect lack of personal savings to escalate.
  • According to a recent survey, only 40% of American consumers cannot pay an unexpected expense of $1,000 using their personal savings.
  • In another similar survey, four out of ten Americans reported that they could have problems raising $400 to cover emergency expenses like repairing a broken appliance or car repair.

Growing Personal Debt

COVID-19 Stimulus Check and Personal Finances

  • The ongoing COVID-19 pandemic is having a real impact on the personal finance statuses of many Americans. The pandemic and the resulting efforts to curb the spread have forced many Americans to unemployment.
  • With no employment or other sources of income, analysts note that many Americans are concerned about their abilities to pay their personal debts and meet their basic needs.
  • To help them in meeting their financial obligations at this difficult time, majority of Americans (61%) are looking into using the stimulus checks provided by the government to meet their financial obligations.
  • Personal finance experts advise Americans to use their stimulus checks properly to enhance their personal finance situations.
  • They are advising Americans to cover the basic essentials such as food and healthcare, pay down personal debts to reduce the debt burden, increase their personal emergency savings for unexpected emergencies, and make investments for the future as a long-term plan.
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Part
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Trending Finance Topics: Social Security

Declining dependency on Social Security benefits, taking Social Security benefits early, solvency of Social Security are some of the most popular topics/online conversations currently trending around Social Security in the US.

Declining Dependency on Social Security Benefits

  • Findings from recent surveys by analysts and policymakers show that while social security benefits help millions of Americans during their retirement or physical disabilities, younger generations are not expecting so much from the program.
  • Only 38% of Generation Z and 42% of millennials hope to depend on Social Security benefits compared to 64% and 83% of Generation X and baby boomers, respectively.
  • Amid the limited funding expectations, many millennials do not think that Social Security will be in existence when they attain the retirement age. The waning reliability of Social Security benefits is a matter of concern for many Americans, particularly the younger generations.
  • On the one hand, younger generations expect to live longer than their parents do. Thus, they will have more years to depend on some kind of social protection.
  • On the other hand, they do not intend to rely on Social Security benefits. This has left many with concerns about catering for their financial needs for the extended years.
  • To address this problem, experts recommend legislative and non-legislative measures to make Social Security more appealing to the younger generations.
  • For example, employers should incentivize the younger employees to invest more in their social security through providing annual statements indicating how much they (employers) have paid into the employees’ social security yearly.

Taking Social Security Benefits Early

  • Taking social security benefits early is a major trending topic in the US among analysts. Americans can decide to start taking their social security benefits as early as when they reach 62 years of age. However, they can also decide to do so after they attain the full retirement age of 65 years.
  • Taking social security benefits early is necessary because of uncertainties regarding how long one is going to live or whether he or she will be able to claim the benefits if they wait until the retirement age.
  • Moreover, taking social security benefits early ensures that the beneficiary receives more than if they wait until they retire. This is based on the average life expectancy principle whereby collecting more checks, although smaller, makes more sense than collecting fewer bigger checks.
  • Other experts note that the early option considers the time value of money. Thus, waiting until later to start taking Social Security benefits is likely to have less value than doing so early.

Solvency of Social Security

  • The solvency of the Social Security is a major topical issue in the US. According to retirement planning experts, there are growing concerns about the future of Social Security with many Americans, especially the younger people, doubting whether the program will survive for long.
  • Based on the 2019 report by the trustees of Social Security, the fund reserves for Social Security will be exhausted by 2035 if policymakers take no action.
  • For the first time in almost 38 years, the program’s annual cost is also expected to exceed its cumulative income this year. This will continue yearly for the next 75 years.
  • Social security experts observe that such statistics and projections are causing growing concerns among Americans who depend on Social Security benefits for their financial survival during retirement or when plagued with disability.
  • Unless the Congress and other policymakers step in with appropriate measures to cushion the fund, the future of Social Security in America remains uncertain.



Part
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Part
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Trending Finance Topics: US Coronavirus Stimulus Package

Eligibility, the expected amount of payment, and delays or failure to receive the stimulus payment are trending topics around the US coronavirus stimulus package. The requested information about the topics is presented below.

Eligibility

  • Eligibility is a trending topic around US Coronavirus stimulus package. According to many online articles, many Americans are keen to understand if they are eligible to receive the stimulus package considering that many have been rendered jobless by the current pandemic. As a result, many writers have written about the eligibility criteria.
  • According to Clifford Colby, an Associate Managing Editor at CNET, those eligible for the stimulus payment include single US residents with less than $99,000 adjusted gross income for 2018-2019, those who file as household heads with earnings under $146,500, and those who file jointly without children with less than $198,000 earnings.
  • Another reporter for the Guardian newspaper notes that those eligible for the stimulus payment vary in terms of whether they will receive the full amount. Only individuals with $75,000 or less according to the latest filed tax return as well as couples with $150,000 or less are eligible for full amount.
  • For individuals making over $75,000, the amount received will be reduced at the rate of $5 for every increase of $100 in earnings.
  • Some reporters also note that dependents under the age of 16 years are also eligible to receive $500 from the stimulus package while dependents between 17 and 24 years are exempted.

How Much Payment to Expect

  • The amount to receive from the stimulus package is also a major topic in many articles. Some writers have provided detailed explanations of the amount of payment different groups of eligible beneficiaries are bound to receive.
  • For example, Clifford Colby breaks down the expected amounts for single US residents ($1,200), heads of household ($1,200), couples with joint filings ($2,400), and children under 16 ($500).
  • Other websites have provided Americans with online calculators to estimate their expected stimulus payments. For example, in an article by the editorial team of TaxSlayer, readers can click on a link provided to calculate their expected stimulus payment directly.
  • Besides the online calculator, the editors have explained how the government decides on the amount of payment each individual receives. For instance, the article notes that the amount is based on one’s AGI (adjusted gross income) and tax filing status for 2018-2019.

Delays or Failure to Receive the Stimulus Payment

  • Delays or failure to receive of the COVID-19 stimulus package is also a major trending topic with many articles providing potential reasons.
  • One potential reason provided is having a high adjusted gross income (AGI). Apparently, individuals with very high AGIs for the 2018 and 2019 returns period are likely to be exempted from receiving the payment fully.
  • Another potential reason is filing paper returns for the relevant return period.
  • According to an article by CNN, the Internal Revenue Service (IRS) suspended the processing of paper returns after the closure of its centers amid the COVID-19 pandemic. Thus, those who filed paper returns may be experiencing delays in receiving their payments.
Sources
Sources