Most of us with 401(k) plans watched in horror, as our retirement savings plummeted in the stock market crash of 2008. That year, the average 401(k) balance dropped by a third, forcing older Americans to delay retirement or cut back on spending. Since then, as the market rebounded, some of our savings have recovered in fits and starts.
With time running out for Congress to prevent a doubling of interest rates on federal student loans, the White House and Republican leaders exchanged accusations Thursday on who was to blame for the lack of an agreement.
The Senate, in the latest round of political maneuvering on a popular campaign issue, Thursday rejected competing Democratic and Republican proposals to prevent student loan rates from doubling to 6.8% in July.
For student borrowers, that pricey college education is going to cost a bit more next year.
Sharon Edwards of Salem, Oregon, may have to move to Mexico, where the cost of living is cheaper, so she can afford her retirement.
With federal student loan interest rates set to double July 1, the Senate failed Tuesday to get enough votes to take up a bill to extend low 3.4% rates for another year.
updated: Tue May 08 2012 12:48:00
CNN's Candy Crowley talks to House Speaker John Boehner about the threat of higher student loan interest rates.
updated: Thu May 03 2012 12:19:00
Ryan Bryski tells the story of his brother Christopher, whose student loans persisted after he tragically passed away.
The threat of increasing loan rates on future college students has become the newest political cudgel. It shouldn't be. Lowering interest rates on subsidized student loans does little to address the real problems of higher education: rising tuition costs and diminishing returns.
updated: Fri Apr 27 2012 14:56:00
President Obama targets the youth vote in calling for lower college costs.
The White House said Friday that President Barack Obama would veto a Republican measure passed by the House to extend lower interest rates on federal student loans because it takes money from a health care fund that benefits women.
For Republicans and certain presidential nominee Mitt Romney, the best defense appears to be a good offense on issues and themes being pushed by President Barack Obama and Democrats.
updated: Thu Apr 26 2012 19:42:00
CNN's Jessica Yellin reports on President Obama's efforts to secure the youth vote in November.
This week President Obama did a swing through some college campuses talking about student loan debt. The immediate issue is the 3.4% interest rate on federal student loans. It's set to double July 1 unless Congress acts. Keeping the rate low in this still weak economy is, as the president said, a no-brainer. Even his opponent Mitt Romney has endorsed it. But the larger problem -- mounting college costs and a cumulative $1 trillion in student loan debt ? remains untouched.
The House will vote Friday to extend current rates on federally funded college loans for one year, Speaker John Boehner announced on Wednesday in what is seen as an attempt to blunt President Barack Obama's momentum on an issue popular with young voters.
Margo Balboni is cramming college into three years to cut down on the cost of her student loans. As it is, the University of North Carolina sophomore expects to graduate in a few years with $20,000 in debt.
On July 1, the interest rates on student loans subsidized by Uncle Sam will double to 6.8%.
President Obama will use his bully pulpit to urge lawmakers to prevent a doubling of interest rates on federally subsidized student loans.
The Consumer Financial Protection Bureau on Wednesday released a new online tool it's testing to help families compare the costs of attending different colleges and universities.
The cost of college tuition will continue to rise as long as federal student aid programs continue to increase with little or no accountability.
With little more than three months until the interest rates on federally subsidized student loans double, students are pushing lawmakers to help them out.
Bank of America announced plans Thursday to freeze pension plans, effective in July, and increase its 401(k) contributions instead.
I thought I was clever. Earlier this year I had over half of my 401k assets in cash. I know that investors are terrible at timing the market and I'm way too young not to be fully invested, but I can't get over the fact that stocks look expensive right now.
General Motors has shifted its senior salaried workers away from a traditional pension plan to a 401(k) plan, said a company spokeswoman on Wednesday.
If you have a child headed off to college this fall, you've got an important item on your to-do list: the Free Application for Federal Student Aid (FAFSA), which you can submit as early as Jan. 1.
The Obama administration proposed new rules Thursday to help retirees make their savings last throughout their lifetime -- by investing in annuities.
Many people think they can plan on spending less later in retirement since they'll become less active as they age. But if their health declines, they may actually shift spending rather than reduce it. Do you think it's risky to plan as if one's expenses will go down later in retirement? --Tim, U.K.
President Barack Obama unveiled a new college affordability plan Friday, proposing to further expand student financial aid while providing more assistance to schools that hold tuition down and cutting aid to those that do not.
updated: Fri Jan 27 2012 13:39:00
President Obama announces changes to make college more affordable to prepare young Americans for the future.
My 401(k) is managed by a brokerage firm that was busted by the SEC for fraudulent practices (although those practices weren't related to my 401(k) plan). Still, I don't want to invest my money with, or pay fees to, to a firm I consider unethical. For now, I've switched all of my money into the bond account figuring it's the safest place to invest until I can figure out what to do. But I'd really like to get into another 401(k) plan. Can I do that? -- Michael S.
Attention college students: The interest rate on federal student loans is scheduled to double this summer unless Congress acts soon.
I'm 57 and hoping to retire at 68, but I'm behind on my retirement savings. Should I invest as if I were younger and shift more into stocks to help increase my 401(k)? -- Jeff Branstrator, Greensboro, N.C.
If, when you watch or read the financial news, you say to yourself, "This is crazy!" you'd often be right, says David Laibson, a Harvard economics professor.
How much should I have in a 401(k) or other retirement accounts at various ages relative to my salary so I know I'll eventually enough money to maintain my standard of living throughout retirement? -- K.T., Olathe, Kansas
My fiancé and I are in our late 20s and we contribute to our 401(k) plans. But we'd like to supplement our retirement savings by making additional small contributions (maybe $100 a month) over time. We wouldn't touch this money except in an absolute emergency. Any suggestions? -- M. Barber
Thousands of college students may soon feel a financial pinch and another 100,000 may not be able to complete degrees after Congress pushed ahead with changes to federal student aid, education experts said.
I have a substantial amount of cash I want to move into stock and bond mutual funds I already own. I'm aware of the concept of dollar-cost averaging, but I'm afraid that as soon as I move the money it will decline in value and take years to recover. My question is not about what to invest in, but how to make those investments timing wise. -- Robert P.
I'm 31 and dissatisfied with the funds I now own in my 401(k). So I want to shift my money to different funds within the plan. When making this decision, which do you think I should focus on more: the funds' expenses or the returns the funds have earned? - C.H.
The investment company that manages my 401(k) funds recommends I roll my money into mutual funds managed by a subsidiary of theirs when I retire next year. But I'm wondering whether I would be better off moving my assets to the funds of a different firm. What are your thoughts? -- J. Thomas
Americans put more of their hard-earned dough into savings in October and increased their spending only very little.
Let's face it: 2011 was pretty abysmal when it came to savings rates, and 2012 won't be much brighter.
I'm thinking of retiring this summer. Ideally, I'd like to withdraw a higher percentage of my savings the first 10 years or so of retirement and then step it down as my wife and I become less active. Are there any rules of thumb or planning tools that could help me out? -- Craig R.
I'm 23 years old and working full-time. I'm on track to set aside about $10,000 this year. I'm typically very cautious, which makes me unlikely to invest in stocks or anything that is not guaranteed. So my question is: how should I invest my money? -- Laura Hochman, Lawrence, Kan.
As other banks recoil from the customer wrath they faced after attempting to introduce debit card fees, TD Bank is rolling out a brand new fee and hiking others.
My company doesn't offer a 401(k). I invest the max in a Roth IRA, but I know that won't provide enough for retirement. I'd like to invest another $5,000 a year into some sort of retirement plan. What options do I have? -- Daniel J., St. Paul, Minn.
Although more Americans are getting help from scholarships and tax breaks, the net cost of college is eating up a higher share of the typical family's income in 2011, according to a report released Wednesday.
updated: Wed Oct 26 2011 16:42:00
U.S. Education Secretary Arne Duncan explains President Obama's plan to ease the student loan burden for graduates.
Figuring out how much college is going to cost you is about to get much easier.
The White House announced on Tuesday two new measures the Department of Education will start offering in January to help college graduates climb out of their student loan debt hole.
I contribute to my company 401(k) plan. Problem is, the investment choices are overwhelming. Where should I put my money? -- Blake, Opelousas, La.
You'll be able to contribute more tax-free money to your 401(k) next year, the IRS announced Thursday.
I'm terrified of the stock market these days. I plan to retire in April, but I'm afraid I'll lose everything before then. I want to put my money in a safer place, but I don't know where. Should I sell stocks now or wait to see if they go up in value? What do you think? -- Gerry
I'm more than a little disappointed with calculators. I began saving regularly for retirement in the late 1970s and according to the calculator I was supposed to be pretty well off by now. What actually happened, though, was that I did OK until about 2000 but not very well since then. I'm glad I saved, but the calculator was wrong. --David R., Phoenix, Arizona
My IRA rollover account is already diversified across a wide range of low-expense investments (including some Money 70 funds), but I'm considering diversifying even more, perhaps global bonds, mid-caps, REITs and commodities. How far should I split the atom in terms of diversification? -- K.S.
I switched employers recently and I want to move my old 401(k) balance into my new plan. But I'm afraid that if I do, I might miss out on gains if the market moves into more bullish territory while the transfer is taking place. Should I make the move now or wait until the market settles down a bit? -- Mike S.
Drawing up a will may not be the most pleasant task, but it seems straightforward: You leave behind a legal document that specifies how you want your property doled out when your time on this earth is up. What you may not realize, though, is that much of your net worth can be passed along outside of that will. Without some planning, you could unwittingly disinherit intended beneficiaries, including your children, from significant portions of your estate.
One savings account at a time, "Sweet" Alice Harris is trying to save youths from the temptations of crime and violence in Los Angeles' notoriously troubled neighborhood of Watts.
How can I go about calculating the expenses I should expect in retirement? -- Bozena Thrower, Portland, Conn.
Some students will start owing more on their loans while they're in school under a last-minute debt ceiling deal to keep the country out of default and reduce deficits by at least $2.1 trillion over a decade.
College students heading back to school in the next few weeks could get caught in financial limbo if Congress doesn't make a deal to keep United States from defaulting on its debt.
I'm just starting out in my career and I'm trying to decide how to divide my contributions between my company's regular 401(k) plan and its Roth 401(k). I've heard that I'm better off putting money into the Roth because I'm probably in the lowest tax bracket I'll ever be in. If I contribute 10% of my pay, should I just put 5% in each? Or should I put it all in the Roth 401(k) and switch to a regular 401(k) later in my career as my tax burden rises? -- Derek, Kansas City, Mo.
I resigned from my job last year. I still have $35,000 in my company's retirement plan, but I don't really understand the investments or fees. I'm thinking of transferring this money to an IRA and investing it in a target-date fund. My husband already has two target-date funds, one in his IRA and another in his 401(k). Does this strategy make sense? -- Sherrie H., Jacksonville, Fla.
While the economic recovery remains sluggish, retirement funds are looking the healthiest they have in years.
Don Poffenroth spent more than 20 years watching his 401(k) eke out returns of 3% to 5%. Until, in 2007, he decided to take a bold step: He emptied out his 401(k) into a self-directed IRA and funneled all of his savings -- $300,000 -- into a vodka distillery.
Worried that you're not saving enough to achieve the post-work life of your dreams? Let a retirement calculator give you a reality check.
As far as raising teenagers goes, Wade and Julie Scheckla can't complain. The California couple's oldest daughter, Paige, 19, is an honors student heading into her junior year at the University of California at Los Angeles, while 17-year-old Brett and 14-year-old Kennedy are straight-A students and standout athletes.
Campus protests against rising tuition fees are considered a ritual at South Korean universities.
With a combined income of $225,000 and a nest egg of $330,000, Rick and Amy Mendez, 41 and 43, seem like they are in good financial shape. But a closer look reveals that they're lacking something crucial: emergency savings.
What do you get when college costs skyrocket but incomes barely budge? Yet another blow to the middle class.
I've split my stock portfolio among three different funds characterized as "growth," "tech" and "index." How can I tell whether my stock holdings are truly diversified? -- Matthew B., St. Louis, Missouri
Sen. Tom Harkin criticized the business goals of for-profit schools at a hearing on the student loan industry Tuesday.
Congress wants to make it tougher for workers to tap their 401(k) retirement funds -- and to make it easier for them to repay those loans when they do.
Amid all the rancor in Washington over how to rein in the federal deficit, one thing seems inevitable: If you're a six-figure earner, your tax bill has nowhere to go but up. The good news? A quirk in the tax code gives you a new backdoor opportunity to build your savings and shelter more of your income from the threat of higher taxes.
Q: My husband is retired, and I work part-time. Can we contribute to a Roth IRA for him this year? -- Martha Chamberlain, Lanesville, Ind.
I've always used the rule of thumb of 100 minus my age to decide what percentage of my 401(k) to invest in stocks. But now that I'm getting close to retirement I'm wondering whether that's too conservative? Do you think it is? --Martin, Middleton, Wisconsin
Looking to improve your portfolio's performance? Still licking the wounds from tax day? Then it's time to kill two birds with one stone by making sure your investments are as minimally exposed to taxes as possible.
My wife and I are 62 years old, have about $1.6 million in retirement savings and $250,000 in discretionary funds. We have no mortgage or debt payments. I get $12,500 a year from a pension and we both work part-time.
I'm 39, single and earn a good salary. I save about $2,000 a month in a retirement account and another $2,000 in a regular mutual fund. I cut coupons and buy on sale, but I also take trips with friends and family and treat myself to a little luxury every year for my birthday. I'd like to retire with $2 million at age 65, then travel and teach some college courses. Am I on track? What else should I be doing? -- Beverly W.
Last August something spooked me in the markets, so I shifted my 401(k) and Roth IRA accounts out of stock funds and into bond funds. What a mistake! It's pretty much been a steady climb upward since then.
Q: My company stopped its 401(k) match during the downturn. Should I put money into a Roth IRA instead? I'm 41. -- D.R. Westlake, Ohio
Late last year you caught a break. Congress reached a deal that extended the Bush-era tax cuts for two years and renewed perks like the sales tax deduction and the tuition write-off for non-itemizers.
The strategy: Shift your portfolio to cheaper, more tax-efficient mutual funds and ETFs.
It takes a lot of guts to go up to Capitol Hill in the current budget-cutting climate and ask for more money, yet that's what Education Secretary Arne Duncan did at his appearance at the Senate Budget Committee on Tuesday.
How do I know if my financial planner is making me the most money possible? -- Jorge, Billerica, Mass.
The average 401(k) balance hit a 10-year high at the end of last year as the recession waned and more Americans bulked up their retirement savings.
My wife and I are 61 and wondering when to retire. Some say keep working, but I'd like to enjoy life. What's your take? -- David Watkins, Aurora, Colo.
I may write about retirement for a living, but that doesn't mean I like seeing my 401(k) crater any more than you do. Given what's been happening in the market, I sometimes catch myself thinking how great it would be if my financial future weren't tied to something as volatile as Wall Street's mood.
How can the average employee get a better handle on the expenses in company 401(k) plans to be able to make more informed choices? -- Chad Tuttle, Hudsonville, Mich.
It's like Night of the Living Dead: Every time the feds kill off a set of fees, they come back to life -- just in slightly different forms.
Question: I turn 70½ in February and must begin taking required minimum distributions from my 401(k). Do I have to take a second RMD when I turn 71 later this year? If so, how can I minimize taxes? -- Allen Metz, Sun Lakes, Ariz.
I've read a lot about the benefits of rebalancing your portfolio annually, but I've never seen the answer to these questions: How do I decide which stocks to sell? And when should I "wait it out," assuming that a good stock will rise back to its pre-crash price, as opposed to pulling the trigger and accept a loss? -- Chris, Long Beach, Calif.
There's a reason why diet and money books get moved to the front of the bookstore come January first. We are full of good intentions with the promise of a new year.
Question: Are minimum distributions from IRA accounts required in 2010? And, if so, what balance do I use to calculate the amount that I have to withdraw? -- M. Strange, Falls Church, Virginia
Question: I'm 27 and contribute enough to my 401(k) to get the maximum match. I also invest a significant amount to a Roth IRA account for which I pay a 5.75% sales charge. My question: Would I be better off putting more in my 401(k) since it has no sales charge or continue with the Roth and eat the 5.75%? -- N.F., Minneapolis, MN
Question: My wife and I are in our early 30s, earn a combined $150,000 a year and contribute an overall 13% of our salary to our 401(k)s, plus our employers match another 4%. We also have an emergency fund equal to 12 months' worth of expenses.
Question: I'm 50 years old and contribute 20% of salary to my 401(k), of which my employer matches 6%. The choices in my 401(k) plan are limited, however, so I want to branch out. I already max out a Roth IRA, so I can't invest more there.
For the past two years, target-date funds have been under fire.
Question: I'm increasingly concerned about the larger role the government has taken in our day-to-day lives in areas such as health care and banking and wondering whether this trend might eventually extend to 401(k) plans.
For more than a year, Kim Champney, 40, and Pat Minick, 41, have been kicking in an extra $650 to their $1,048 monthly mortgage payments. "We don't like carrying a lot of debt," says Minick, who stays home with their three kids, ages 7, 8 and 10.
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