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At your
Thanksgiving table Thursday, you may have joined
millions of Americans giving thanks for the good health,
happiness and love in your family.
Polls
show that in the hard times of the last few years,
people have grown increasingly appreciative of these
elements in their lives as financial matters have become
shakier. In fact, in polls, people are stressing the
importance of keeping themselves healthy, and a Gallup
poll showed more exercising regularly last year than the
prior year. But beyond the essentials, here are eight
money matters that should make people thankful.
—You
have a job, affordable health insurance and have the
money to put food on your table. As basic as this
sounds, according to Gallup research, about 25 million
Americans are looking for jobs, 47 percent of people 30
to 49 years old are dissatisfied with how much they pay
for health care, and an increasing number of people
report there have been times in the past 12 months when
they didn’t have enough money for food.
—You
realize debt is not your friend and you have started to
take control, paying off more than the minimum each
month. This has been a painful process for many, with
millions losing homes to foreclosure during the past
four years. But those who realized how dangerous debt
can be, and have become serious about paying it off,
will have a good chance of making the most of their
lives in the years ahead. If you are among them, as you
pay off debt, increase savings too.
—You
had a stash of cash. There is a saying that “cash is
king,” and that’s been especially true lately.
Although people have been turned away from mortgages if
they didn’t come to the table with 30 percent down
payments, those with cash have picked up homes at
bargain-basement prices either for a primary residence,
rental property or second home.
—You
were smarter than your financial adviser about bonds.
For three years, advisers have been telling individuals
that they were crazy to keep so much money in bonds and
that bonds would crash and burn in a higher
interest-rate environment. Yet, as of Nov. 22, the
Vanguard Total Bond Market Index Investor fund had a
five-year annualized return of 6.27 percent, and the
Vanguard 500 Index Investor fund (stocks) had a
five-year annualized return of -1.29 percent. Don’t
push your luck, though. When interest rates rise
someday, your bond fund will suffer. So consider a
mixture of stocks and bonds, especially if you see signs
the economy is on the mend.
—You
have an old-style pension that is either giving you
guaranteed monthly income in retirement or will someday.
These dependable pensions are disappearing fast, so if
you have one, you are lucky. Just don’t be too sure
about this, because while your employer can’t change
what you’ve already earned in your pension, an
employer does have the right to change rules. So make
sure you are doing your bit too. Find out what to expect
in monthly payments from your pension, and then see how
much money you might need to accumulate in a 401(k) or
IRA to supplement pension income. Try this calculator:
Choosetosave.org.
—You
are retired and comfortable after leaving your job at
age 65. You might be the last generation to be allowed
to retire at such a young age while counting on the
government to deliver fully on promises for Social
Security and Medicare. Because of an onslaught of 77
million baby boomers into the system, people are going
to have to work longer, and those over 55 are likely to
face some cuts in Social Security and Medicare.
—You
graduated from college a few years ago, you have a job
and you got help from your parents. Now, with 1 in 4
homes underwater, many parents can’t tap home equity
to pay for college, the harsh stock market has hurt
college savings and the average student with loans
graduated recently with about $25,000 in student loans
— while facing a fierce job market.
—Your
employer offers you training on how to invest money in
your 401(k) and gives you matching money. Unfortunately,
most people who are offered help don’t take it. They
blunder through investing and end up cutting off their
potential nest egg by hundreds of thousands of dollars.
And about half of people in their 20s don’t put enough
money in a 401(k) to get free matching money from their
employer. That’s telling your employer you don’t
want free money, likely $200,000 or more over a lifetime
of work. No matter how thankful we are for all we have,
why say “no” to thousands of dollars in free money?
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