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Katie Brockman, The Motley Fool
Published 7:00 a.m. ET Nov. 4, 2019

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USA TODAY personal finance reporter, Janna Herron, explains how changes in the Federal Reserve’s interest rates affect your financial accounts.
USA TODAY

Social Security benefits can make the difference between barely scraping by in retirement and living a comfortable and enjoyable lifestyle. For many people, those monthly checks are also the main source of income in retirement. In fact, approximately half of baby boomers say they expect to rely primarily on Social Security benefits to get by in retirement, according to a survey from American Advisors Group.

If you’re expecting Social Security to help you make ends meet during your senior years, it’s important to maximize your benefits the best way you can. One way to do that is to delay claiming benefits past your full retirement age (FRA) – which is age 67 for those born in 1960 or later or either 66 or 66 and a few months for those born before 1960. By waiting to claim until after that age (up to age 70), you’ll receive extra money each month on top of your full amount – up to 24% extra if you have an FRA of 67 years old.

However, waiting to claim Social Security isn’t the only way to maximize your monthly checks. There are also a few other ways you can increase your benefits for the rest of your life.

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1. Work for more than 35 years

One factor that has a significant impact on how much you’ll receive in benefits is your income during your working years.

Your basic benefit amount (or the amount you’d receive by claiming benefits at your FRA) is based on the 35 highest-earning years of your career. If you work fewer than 35 years, you’ll have zeros added to your average to account for the years you weren’t working. As a result, that will lower your average and your basic benefit amount.

On the other hand, if you work more than 35 years, only your highest-earning years will be counted. Because you’re likely earning a higher salary now than you were when you started your career, working a few years longer can significantly increase your average – and your benefit amount.

2. Make sure you know all the benefits you’re entitled to

To truly maximize your checks, it’s important to understand exactly what types of benefits you’re eligible to receive.

For example, even if you haven’t worked long enough to be eligible to receive Social Security benefits, you may still be entitled to receive spousal benefits based on your husband’s or wife’s work record. Or if you can receive benefits based on your own record but your spouse is eligible to receive more, you might still be able to receive additional spousal benefits based on his or her record. Those who are divorced may also be able to receive divorced spousal benefits, even if your ex has remarried.

You may also be entitled to survivor benefits or divorced survivor benefits if your spouse or ex-spouse passes away. There are several qualifications you need to meet in order to be eligible to collect survivor benefits, but depending on how much your spouse was entitled to receive, that money could go a long way.

It’s crucial to do your research to determine which types of benefits you’re entitled to collect because the Social Security Administration won’t always inform you when you’re able to file for these benefits. So if you don’t know what you’re eligible for, you may miss out.

3. Apply for a do-over if you claim too early

In general, once you begin claiming your benefits, your decision is irreversible. However, you do get one do-over if you make a mistake. If you change your mind within 12 months of initially claiming benefits, you can reverse your decision – but you will need to pay back all the benefits you’ve already received.

This can sometimes be a smart move if you’ve claimed benefits early. For example, say you claimed at age 62 because you lost your job and needed the extra income to survive. In that case, your monthly checks would be reduced (sometimes significantly) if you claimed before your FRA but felt you had no choice. However, if you find a new job six months later and decide you’d rather hold off on Social Security until after your FRA to earn that boost in benefits, you can undo your decision – as long as you withdraw your application within 12 months of filing and can repay the money you’ve already received.

If 12 months have already passed or you can’t afford to pay back what you’ve already received, there’s another option: voluntarily suspend your benefits. Once you reach your FRA, you can ask the Social Security Administration to suspend your benefits until age 70. Then, once you turn 70 and start collecting benefits, you’ll receive extra money each month to make up for the time you weren’t receiving any benefits.

The advantage of suspending your benefits is that you’ll earn bigger checks and won’t have to pay back the benefits you’ve already received. But the downside is that the boost in benefits won’t be as significant as if you hadn’t yet started claiming at all.

Social Security benefits can help bridge the gap between the money you’ve saved and the money you’ll need to live comfortably in retirement. But to maximize the amount you receive, you’ll need to have a strategy. By learning as much as you can about how your benefits are determined and the type of benefits you’re eligible for, you can make the most of your monthly checks and stretch every dollar in retirement.

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High-rise homes present exciting opportunities

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High-rise living in Dallas offers a wide range of exciting options. Residences feature spectacular views and wonderful amenities that appeal to busy young professionals and baby boomers, according to Allie Beth Allman & Associates. Additionally, the buildings are close to some of the city’s top dining and entertainment options.

Most buildings put a premium on service and security for its residents, with a concierge and parking valet, making a high-rise residence a perfect place to call home when you travel, said a company spokesperson.

Other amenities may include an exercise room, pool, party and media rooms and dog-walking area. Often overlooked is the community within the building. There are holiday parties, weekend get-togethers and other resident events that help create lasting friendships.

Here are three homes in high-rise buildings that the Allman firm recommends.

Kyle Crews is offering the four-bedroom custom-designed home at 2555 N. Pearl St., unit 202 at The Residences at the Ritz Carlton. Features include two large master suites, two living and dining rooms and wood flooring throughout the 4,256-square-foot interior. A guest suite can be private or part of the main residence.

Two kitchens feature Wolf gas stoves, Sub-Zero refrigerator/freezers, Asko dishwashers, wine refrigerators and ice makers. The second kitchen is designed for catering parties. The master baths have spa-like finishes, Jacuzzi soaking tubs, dual vanities and seamless-glass showers. The terrace offers tree-top views of the pool and courtyard. This home has four assigned parking spaces and two climate-controlled storage units.

Ani Nosnik is marketing a two-bedroom condominium on the 19th floor of The Mayfair. Located at 3401 Lee Pkwy., unit 1903, this residence features a large kitchen and a separate den. The master suite includes a spacious bath with a large tub and dual California closets. The Mayfair offers 24-hour, seven-day valet and concierge services and a fitness center, pool and sky club.

Listed by Alex Perry, the two-bedroom corner residence at 2900 McKinnon St., unit 1004 in the Azure has more than 1,400 square feet of living space and has been updated. The home features an open floor plan and a kitchen with Sub-Zero and Miele appliances, a built-in espresso maker, wine refrigerator and gas cooktop. This 10th-floor residence also has a balcony that overlooks Uptown and a two-car garage. Azure amenities include a concierge, gym, infinity-edge pool and media room.

For details, visit www.alliebeth.com.

Baby Boomer – Survival Tips For the Sandwich Generation

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With people living longer and delaying starting families, the Baby Boomer generation, also termed as the Sandwich Generation or Generation S, are finding themselves caught in a unique intergenerational mix in the family. While parenting children of their own who could be in various stages of growth – from young kids to adolescents, to boomerang children, to grown up children living with their parents – they also have to take care of their aged parents. When this is compounded with a spouse's needs, along with the individual's own spiritual and emotional needs, it can be a volatile mix indeed.

The Stress Factors of the Sandwiched

The following are a few of the stress factors that affect the sandwich generation :

  • How to split time amongst children or family and elderly parent (s)
  • How much time should be given to each role of care giving
  • How to find time for one's marriage
  • How to find time for personal needs
  • How to keep peace between the children and the aged parent
  • How to find the needed resources to take care of oneself, the children, and the elderly parent
  • How to deal with a sense of isolation
  • How to deal with the guilt of not having the time to do everything

Here are a few tips with which some of these stress factors can be counteracted:

Holding a Meeting with the Family:

At the meeting, talk about the various tasks of care giving that have to be carried out in a day or a week. Make a list of tasks that have to be done by the members of the family each day or week. Set mutually accepted expectations of how these tasks should be completed. Although providing care for the elderly is usually done by a single person, but it doesn't have to be that way if the rest of the family gives a helping hand. The meeting will also allow the rest of the family getting to know how they will be sharing and participating in the important act of providing care, which can be a rewarding experience.

Communicating with Each Other:

Encourage elders and children to connect with each other by communicating their feelings and thoughts. Ensure that during the meeting each person has the chance to express themselves. This leads to greater understanding between the generations, which results in better harmony in the household.

Dealing with Children:

Explain to your college going children about the necessity of being realistic about the kind of tuition fees you can afford. If there are boomerang children at home, share your expectations with them. Call upon them to behave responsibly, as adults, although they may be living with you.

Seeking Assistance:

If you experience a sense of isolation creeping in, pick up the phone and seek assistance from resources like a medical social worker, a local aging agency, the church, or a doctor. The Internet can also be a wonderful tool for finding resources. Never hesitate to seek assistance when you feel you require it; it could surprise you to find out just what kind of assistance there is out there providing help.

Making Time for Yourself:

Often caregivers fall sick or are exhausted because they do not take the time to look after themselves. Although it may be true that nobody else can provide the kind of care that you do, but it is equally important to take care of yourself in order to continue taking care of your loved ones. Take up an exercise regimen, and do it regularly. Eat nutritious meals. Take time off each day to do the kind of things you like such as listening to your favorite music, reading, painting, and so on. These activities can be self-rejuvenating. Do not think you are being selfish by looking after yourself. By being healthy and in a positive mood, you will be able to give even better care.

Making Time for your Marriage:

Also make time for your partner. Share relaxed moments with him / her. Go out together to see a movie or to a restaurant. Remember to have fun together, share a joke with each other, and don't forget to laugh at the comical things about life.

OK Boomer

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Why are they called baby boomers? Because when they take even the tiniest assault on their ego, they go boom and become babies.

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A Shockingly Low Number of Retirees Rely on Savings in Retirement

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Your golden years can be incredibly expensive, and depending on what type of lifestyle you live and how many years you spend in retirement, it’s not unheard of to spend more than $1 million over the rest of your life.

Yet new research shows that the vast majority of retirees don’t rely on their savings to get through retirement. There’s a reason for that, but before you quit saving, keep in mind that this type of strategy won’t work for everyone.

A hand places a coin into a full glass jar labeled retirement. Next to the jar are an alarm clock and successively taller stacks of coins.

Image source: Getty Images

How do older Americans pay for retirement?

For most people, retirement income comes from multiple sources. You’ll have Social Security benefits and possibly a pension, and you could still be working part-time. In general, though, any additional income in retirement will need to come from your savings.

However, only 5% of retirees say their primary source of retirement income is their personal savings from a 401(k) or IRA, according to a recent survey from Wells Fargo. The bulk of retirees (64%) say they rely on Social Security benefits to get by, and 22% depend primarily on a pension plan.

That may sound like good news, particularly if you’re nearing retirement age and your savings are sparse. But it’s not as promising as it may seem.

First, fewer of today’s workers have access to pensions — just 19% of baby boomers and 14% of Generation X workers expect to rely on a pension as a primary income source in retirement, according to Wells Fargo. If you won’t receive any money from a pension in retirement, that may mean your income sources include just Social Security and your personal savings.

But depending too much on Social Security isn’t an ideal retirement plan, either. For one, the average benefit amount is just $1,471 per month, which may not be enough for some households to survive on. Also, the Social Security program is currently on shaky ground. The good news is that contrary to popular belief, the program is not on the verge of collapse — as long as workers continue paying taxes, there will always be at least some money that can be paid out as benefits. The bad news, though, is that the program is facing a cash shortage, so in the next few decades, the Social Security Administration may need to reduce benefits.

So although current retirees may be able to survive on pension plans and Social Security benefits, future retirees may not have the same advantages. Fortunately, there are a few ways you can better prepare yourself for retirement.

Creating a retirement strategy that stands the test of time

To be able to retire comfortably, you’ll need a strategy. Part of that strategy involves beefing up your retirement fund, but it’s also important to maximize all the resources you have.

For example, although you may not be able to survive primarily on Social Security benefits, that doesn’t mean you can’t make the most of them. You’ll receive your full benefit amount by waiting to claim until your full retirement age (FRA), which is either age 66, 67, or somewhere in between. But if you wait until after your FRA to claim (up until age 70), you’ll receive more money each month for the rest of your life. This can be a useful strategy if your savings are slim and you expect to spend several decades in retirement, and it can also provide some protection in the event that benefits are cut in the future.

Another retirement strategy involves withdrawing your money carefully so that it lasts as long as possible. It can be tempting to overspend during your first few years of retirement, traveling and checking off as many bucket-list activities as you can. But if you break the bank in the early years of retirement, you risk running out of money later down the road. That’s why it’s important to pace yourself, setting a spending limit each year so that you can stretch every dollar.

Finally, boosting your savings as much as possible before you retire can help you prepare for any financial obstacles you encounter (like Social Security cuts). You may need to make some adjustments in your budget to save more, and remember that if you’re not willing to make sacrifices now, you’ll likely need to make sacrifices in retirement if your savings aren’t up to par. It may be tough to increase your savings, but it can result in a far more comfortable retirement.

Although many current retirees can get by on a pension or Social Security alone, that’s not the case for everyone. Retirement is more costly than you may think, and you’ll need a strong nest egg to ensure you’re as prepared for it as possible.

Baby Boomers = Volunteer Force

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The baby boomers are working hard to rename the golden years the "service" years. As baby boomers age they are reaching out to their communities and volunteering in schools, relief centers, and helping various civic organizations. Baby boomers understand the concept of giving back. While baby boomers join the ranks of the elderly they want to make the communities around them better places.

The doctors who are part of the Chicago south west suburbs physicians know how important baby boomers are to their communities. Doctors see the vital part that baby boomers are playing in society and want to assist this amazing generation with excellent medical care.

Assisted living in Illinois is a growing business because of aging baby boomers. But it is more then just a business. These living complexes are vibrant areas of ideas and stories and full of people looking to serve those around them. Baby boomers can choose the freedom of living in senior living centers that are truly independent and yet connected with health care facilities to nursing care centers that help their residents with their basic needs. In the various types of senior centers the residents have many ways to fulfill their need to give back to the community.

Communities should recognize that the baby boomer generation is giving back to them. Communities can do this by helping their hospitals. If hospitals in IL receive help from their communities, they will then have the ability to help the amazing volunteer force in the baby boomer generation. Hospitals are connected with the senior living centers that are offering the baby boomers the freedom they need to volunteer in their communities. Hospitals become the conduit to making the baby boomer power work within society. The payback to the community will be priceless.

How Baby Boomers Can Have Enough to Retire

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Having enough money to retire comfortably has become an all consuming issue for baby boomers in the last few years. The all too common down turns in the economy have made saving for retirement very difficult. Investing possibilities like the stock market were always complicated, but with an increasing volatility in the investment markets, those over 50 are scared. It seems that businesses are trending towards fewer benefits because of an unstable economy and globalization. The safety net that was supposed to be there for retirees, Social Security and Medicare, are looking like they may not be there to help, or will be far less than adequate. So what is the baby boomer to do to feel comfortable about his or her golden years in this ever changing economic environment?

An all Consuming Issue for many Baby Boomers

As I talk to people over 50, for many of them retirement and how they are going to afford it is an almost continuous worry for them. They may have not planned well in the past. They may be concerned about their jobs or the company 401K. In the worst cases they may even be concerned about social securities viability, but many of them think that retirement will be a constant struggle to survive.

The economy can make saving for retirement difficult. It seems we are always going through some economic downturn these days. If it isn’t the dot-com bubble bursting then it’s the housing bubble blowing up in our faces. What do we do? Should we put the money into improving our house? Bury it in the back yard or hide it in the mattress? Or should we just go out and have a good time because no matter what we do we aren’t going to have enough.

Is the Stock Market the Option?

The stock market and other investment options and interest rates are making amassing any significant retirement fund difficult. There appears to be money to be made, but how can anyone but the professional figure out how to do it. And if you are going to trust a professional, which one should you choose? We have all heard horror stories about a friend being taken for tens of thousands of dollars by an unscrupulous broker. Besides that, to invest in the market, you still need money to invest. Where would you come up with that in a slow economy?

Businesses are Trending towards Fewer Benefits

As the economy slows globalization increases competition for businesses with cheap labor forces in other parts of the world, our benefits seem to be getting less and less. Have you noticed your health insurance covers less? Many have seen a smaller contribution for their employers to their 401K, and raises seem fewer and farther between. Add to that the constant concern of outsourcing, and saving for retirement is very difficult.

Is Social Security and Medicare the Answer?

Many baby boomers have doubts about social security and Medicare. We have all heard that social security will be bankrupt by as early as 2017 but by most estimates at least by 2041. What is it going to do between now and then, and what will the government fixes do for the income we may be dependent on. It’s already barely a subsistence level income. And if I have major medical expenses will Medicare take care of that? It appears to be in trouble as well.

So how do we deal with all this bad news? Is there an answer? Yes, and it is one that many have already discovered and become successful at, and one that many financial self-help authors have been recommending for years. With changes in how business is being done over the internet it is a reachable goal for almost anyone as well.

An Internet Home-based Business

Internet home-based businesses are a great way to leverage time and increase household income. It can be started on a part time basis while you are still working and the initial investment can be small, so there is little risk. It requires skills that most of us already posses, skills that we learned before we graduated form high school and most of us used all of our lives. It does not require exceptional computer skills and there is easily affordable help for this is you come up a little short there.

The income can easily reach and surpass the full time level. You will have much more time flexibility with an internet based business. You can work from home or anywhere else that you can find an internet connection (almost anywhere in this day and age). The business can become a part time effort for a full time income in a matter of a few years or even months as the internet is shortening this time.

An internet home business [http://hubpages.com/hub/A-Recession-Proof-Income-Even-in-Trying-Times] also allows someone of retirement age to continue working well into retirement if they wish. This is a huge advantage as it slows the draws on their retirement account, making a much smaller account adequate for comfortable retirement years.

So we are back to that question, what is the baby boomer to do to feel comfortable about his or her golden years in this ever changing economic environment? It does not look good with our supposed safety net of Social Security and Medicare developing holes large enough for a bus to pass through. And, whether from greed or the need to survive, the businesses we are working for are doing less and less to take care of us and our retirement. We probably should have some presence in some investment income opportunity like the stock market, but for most of us we need more than just that income with the volatility in the markets, and the all too common downturns in the recent past. That internet home business can really make the golden years a golden experience for you.

Healthcare ETFs Are The Top Performers for October

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While the healthcare ETFs like the iShares Nasdaq Biotechnology ETF (IBB B+) are pulling back slightly this morning, mainly due to Amgen declining today, despite beating its earnings estimates and raising its full-year guidance, the overall healthcare sector is a top performer for October.

AMGN reported third-quarter 2019 earnings of $3.66 per share, which beat the Zacks Consensus Estimate of $3.51. Earnings fell 1% year over year due to declining revenues and operating profits.

Total revenues of $5.74 billion in the quarter bested the Zacks Consensus Estimate of $5.63 billion. However, total revenues declined 3% year over year.

IBB, which holds AMGN, has a middle of the road expense ratio of 0.47%, but is up over 7.88% month to date and over 11% YTD and has been one of the top performing healthcare ETFs. It seeks to track the investment results of the NASDAQ Biotechnology Index, which contains securities of companies listed on NASDAQ that are classified according to the Industry Classification Benchmark as either biotechnology or pharmaceuticals and that also meet other eligibility criteria determined by Nasdaq, Inc. The fund generally invests at least 90% of its assets in securities of the index and in depository receipts representing securities of the index. It may invest the remainder of its assets in certain futures, options and swap contracts, cash and cash equivalents. It is non-diversified.

Also a top performer this month is the iShares U.S. Healthcare Providers ETF (IHF B+), which seeks to track the investment results of an index composed of U.S. equities in the healthcare providers sector. The healthcare ETF offers exposure to U.S. companies that provide health insurance, diagnostics, and specialized treatment, as well as targeted access to domestic healthcare services stocks, for a 0.43% expense ratio, and is up 9.39% this month and 7.32% YTD.

Healthcare could remain a key player running up to election time, as it is a hotly debated topic due to aging Baby Boomers and cost-cutting efforts by Congress.

According to Investopedia, “The healthcare sector is one of the largest and most complex in the U.S. economy, accounting for close to a fifth of overall gross domestic product (GDP). The U.S. healthcare sector benefits from a strong system of medical research and development, in cooperation with the higher education system and the technology industry. The aging U.S. population and the advancing senescence of the Baby Boomer generation are driving ongoing strong demand in the healthcare sector.”

This article originally appeared on ETFTrends.com

Average payment affected by major, job

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Ever wonder how your monthly student loan payments might stack up next to someone who graduated with a completely different major?

The range can be significant — starting at $406 a month in the retail industry all the way up to $685 a month for those working at private hospitals and other companies in the social assistance industry.

The averages are based on data released by Fidelity Investments and give a glimpse how some fields can leave employees burdened with more student loan debt than others.

The figures — which are higher than other studies — are based on information from nearly 30,000 users of Fidelity’s Student Debt Tool. Those individuals may be more likely to take the time using the tool exactly because they’re overburdened by college debt. 

The tool is widely available at major companies where Fidelity is a record keeper for the 401(k) plan. The tool is available online to the general public, too. See: www.fidelity.com/studentdebt

The Fidelity data includes those with graduate degrees, as well as undergraduate degrees. 

“Here’s a snapshot of people looking for help,” said Asha Srikantiah, head of the student debt program for Fidelity Investments. 

We’re moving into the time of the year when many new graduates from the Class of 2019 will start making payments on their student loans as their six-month grace period ends. 

College grads had an average of $29,200 in college loans — a record in the United States — based on data for the Class of 2018 for those with bachelor’s degrees, according to the latest report by the Institute for College Access & Success. That’s up 2% from the 2017 average of $28,650. 

Graduating with $35,000 in college debt could amount to a $371 a month payment under a standard 10-year repayment plan, assuming a 5% interest rate. That’s just a tad lower than the average car payment for a used car.  

Many times, college grads focus on trying to make those monthly payments as low as possible by signing up for various repayment plans. The trade off, though, is that extending your payments often means you’re delaying paying off the loans as interest keeps building. 

It’s not unusual for many people to see student loan debt build over time the longer they’re out of college because they’ve been paying too little on the debt. 

What should you know about student loans?

You’re not alone, for example, if you’re looking at $400 or $500 a month for student loan payments, according to the Fidelity data. 

The Fidelity report showed:  

  • Average monthly student loan payments below $500 are being paid by those working in transportation ($413); real estate ($434); business management ($446); and manufacturing ($465).
  • The monthly payment jumps all the way to $487 a month for those in information services.
  • Fields that show average monthly student loan payments above $500 include professional scientific and technical services ($543) and higher education, such as those working at colleges and universities at ($563). 

To be sure, the average monthly payments listed via Fidelity are considerably higher than the overall averages nationwide. The typical student loan payment falls between $200 and $299 a month, according to data from the Federal Reserve Report on the Economic Well-Being on U.S. Households in 2018. 

In general, estimates for those with bachelor’s degrees shows that grads majoring in education and communications tended to have lower monthly payments (in the low $300 a month range) than those with engineering or physical science degrees (in the $375 to $395 a month range). That’s based on a study of monthly payments in 2012 for those who graduated in 2008 done by the National Center for Education Statistics at the U.S. Department of Education. 

Those earning degrees in science, technology, engineering and mathematics may need to borrow more money in some cases. 

“The debt of STEM graduates may be higher, but they also have higher income,” said Mark Kantrowitz, publisher and vice president of research for Savingforcollege.com.

According to the Fed’s report, 54% of young adults who went to college took on some debt, including student loans, for their education.

What first steps you should take with college debt?

Make sure you know the depth of your debt. Add up all of the different student loans that you’ve taken out over the years and get a clear picture on how much you owe, said Srikantiah at Fidelity.

Then, she said, try to examine what options are out there when it comes to federal repayment plans or possibly refinancing your student loans. 

You want to understand the potential trade-offs with any move you make. Paying as much as you can on those loans will reduce your overall cost in the long run but you may need to live on a very tight budget to make that happen. 

The Fidelity Student Debt Tool is used by borrowers who want to see all their student loan data in one place and explore the impact of different repayment options.

Fidelity is offering access to a student debt refinancing platform through Credible.com via the student debt tool. Users can compare pre-qualified rates from up to 10 different refinancing lenders without affecting their credit score. In select states, borrowers currently will get a $750 bonus in the “near future” once they close on refinancing a loan. 

Refinancing a federal loan into a private loan, though, may mean giving up an opportunity for various repayment options. Fidelity’s Student Debt Tool helps borrowers assess the pros and cons of refinancing, including the impact on Federal loan repayment options. 

“Repayment of this debt can be challenging,” the Fed report stated. “In 2018, two in 10 of those who still owe money are behind on their payments — little changed from the prior year.”

The Federal Reserve noted in its report that individuals who did not complete their degree or who attended a for-profit institution are more likely to struggle with repayment.

Comparatively speaking, the Fed noted that others who completed a degree from a public or private not-for-profit institution, even including those who took on a relatively large amount of debt, had less difficulty.

What limits should you set on what you borrow? 

Typically, a general guideline is that you don’t want to owe more than what you can make that first year out of college.

“If total debt is less than annual income, you should be able to repay your student loans in 10 years or less,” Kantrowitz said.

High monthly payments, of course, cut into one’s ability to save money or borrow for something else.

When you’re looking at a $450 a month student loan payment, the last thing you want to do is go out and take out a new car loan. 

The average new car payment, after all, is about $550 to $595 a month, based on data from Experian and Cox Automotive’s Dealertrack. 

More: Black women bear largest burden in student debt crisis

More: Givling app helps trivia players pay student loans, mortgage debt — but it could cost you

More: College grads average $32,158 in debt in Michigan. Here’s what some didn’t know

More: Struggling to pay student loans? You could be targeted by scammers

One’s ability to save for the future — or establish roots by buying that first home — may also be hindered by a big college debt burden. 

Many individuals delay contributing to their retirement savings plans — and many may even take out loans against their 401(k) plans. 

Roughly one in five college loan borrowers who used the Fidelity tool reported contributing nothing to their 401(k) plan.

And nearly one out of seven borrowers reported having a loan outstanding against their 401(k), according to the Fidelity research. 

Who is paying the most when it comes to student loan debt? 

What’s even more startling: Baby boomers tend to have the largest levels of student loans based on the Fidelity data. Baby boomers had an average monthly payment of $565 for student loans. Their average student loan balance was $56,652.

By contrast, millennials had average monthly payments of $469 on average student loan balances of $45,548.  

Over the last decade, the average debt at graduation has increased by 21% for bachelor’s degree recipients, Kantrowitz noted.

And in the past decade, he said, the average debt at graduation has gone up by 53% for parents.

“Parent debt has increased because students in bachelor’s degree programs are running up against the federal student loan limits,” Kantrowitz said.

“For a dependent undergraduate student, the aggregate limit for Federal Direct Stafford loans is $31,000 and the sum of the first four years of annual limits is $27,000. As more students hit these limits, it shifts further borrowing to parent and private loans,” he said. 

Yet parents, too, need to pay careful attention to how much they’re willing to borrow to send their children to college.

“My rule of thumb for a parent is ‘Don’t borrow more than your annual income for all your children,'” Kantrowitz said.

“If your total parent education debt is less than your annual income, you should be able to repay your parent loans in 10 years or less,” he said.

If you’re an older parent, though, and likely to retire in less than 10 years, you’d want to borrow even less money to send your children to college.

“For example, if retirement is only five years away, borrow half as much,” Kantrowitz said. 

Contact Susan Tomporat 313-222-8876 or [email protected]. Follow her on Twitter @tompor. Read more on business and sign up for our business newsletter.

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How Having The Right Team Can Encourage Millennial Entrepreneurship

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According to a 2019 survey conducted by Guidant Financial and LendingClub, only 4% of small businesses are owned by 18- to 29-year-olds. These findings showing low business ownership among younger generations are further supported by a Small Business Administration report that found that at age 30, fewer millennials said they were self-employed the previous year compared to Generation Xers and baby boomers at the same age.

What are the reasons for this diminished entrepreneurialism? There are likely many, but among the broad reasons would be lack of know-how. So, the question becomes: How can we unlock the potential of millennials who perhaps have entrepreneurial will but lack the necessary business acumen and knowledge?

Naturally when people talk about millennials owning businesses, they often think of startups and likely have some prominent examples in mind, such as Mark Zuckerberg or Reddit’s Alexis Ohanian, who started their businesses while in college. Yet starting a business is only one path to entrepreneurship. Another is buying an existing business.

For aspiring entrepreneurs, there are some advantages to buying an existing business:

• The business has a track record.

• Typical startup challenges have been overcome.

• Previous business owners are able to pass along insights and expertise.

As baby boomer entrepreneurs retire and sell their businesses, the business ownership possibilities for younger generations will open up. With this in mind, there are two factors that prospective entrepreneurs should consider: financing the purchase and executing the deal.

In terms of financing, there have always been challenges to raising money to start or buy businesses. Millennials happen to be in an enviable position, as baby boomers will be transferring their wealth to Generation X and millennials in the coming years. Millennials also have other financing options, beyond the more traditional sources of funding, that were not available to previous generations of aspiring business owners. One such financing option is crowdfunding, which became a major option only about a decade ago and is a funding tactic familiar to many younger people. Angel investors are another option. According to the University of New Hampshire’s Center for Venture Research, last year saw an increase in angel investments, which is good news for fledgling business owners.

In terms of executing the deal, one method for navigating the complexities of buying a business is to enlist the services of a business broker or advisor. These professionals can map out a strategy and structure the purchase of a business. This addresses the issue of know-how, at least for the beginning of business ownership.

Here are just a couple of aspects that a broker or advisor can help negotiate:

• Involvement of the seller: Many business relationships are personal and dependent on the business owner. A purchase agreement can include a clause about the seller remaining involved for a set amount of time to introduce the buyer to key customers and to ensure a smooth transition of major relationships.

• Continuation of staff: Employees understand the business’s operations and procedures. A buyer can demand a provision that allows them to walk away from a deal if they don’t believe key staff will remain long enough to transfer their knowledge.

These professionals can also help a buyer avoid pitfalls, including:

• Assuming financial liabilities: The business purchase transaction should be conducted in a way that allows the buyer to avoid assuming debts, sales tax liabilities or payroll tax liabilities.

• Being sued for the seller’s actions:The buyer can demand indemnity to ensure the seller will defend any lawsuits and pay any fees and judgments arising from the seller’s actions.

They also can help a prospective buyer by prescreening businesses for sale and negotiating terms.

There are several ways prospective business owners can find a broker or advisor to work with. Consider asking for local referrals from other people who have purchased similar businesses or asking your local chamber of commerce or economic development office for a referral. Look for online directories and reviews to research and identify professionals in your area.

When vetting a potential broker or advisor, there are also some considerations to keep in mind. Before meeting with one, buyers should be prepared to answer a few questions, such as “What kind of business would be desirable — industry, location, size and so on?” “What financing will be available for a potential purchase?” and “What is the preferred timeline for purchase?”

Look for a broker or advisor who is experienced in buying and selling the kind of business you want to buy and in selling the size and value range of business you seek to buy. To find an experienced professional, look for International Business Brokers Association (IBBA) certification. It’s also key to make sure the broker or advisor has long-standing relationships with attorneys and accountants to help you in the process.

Finally, and related to that last point, a young prospective business owner should have a “due diligence team” that includes an attorney, an accountant and a banker, in addition to the business broker or advisor. These team members can provide a millennial entrepreneur with experience that comes only with time and specialization. They can help assess the benefits, liabilities, risks and opportunities that come with a business — in short, they can help ensure that the price of a business is justified. Together with the right team, millennial entrepreneurs can gain the expertise and the means necessary to become successful business owners.

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According to a 2019 survey conducted by Guidant Financial and LendingClub, only 4% of small businesses are owned by 18- to 29-year-olds. These findings showing low business ownership among younger generations are further supported by a Small Business Administration report that found that at age 30, fewer millennials said they were self-employed the previous year compared to Generation Xers and baby boomers at the same age.

What are the reasons for this diminished entrepreneurialism? There are likely many, but among the broad reasons would be lack of know-how. So, the question becomes: How can we unlock the potential of millennials who perhaps have entrepreneurial will but lack the necessary business acumen and knowledge?

Naturally when people talk about millennials owning businesses, they often think of startups and likely have some prominent examples in mind, such as Mark Zuckerberg or Reddit’s Alexis Ohanian, who started their businesses while in college. Yet starting a business is only one path to entrepreneurship. Another is buying an existing business.

For aspiring entrepreneurs, there are some advantages to buying an existing business:

• The business has a track record.

• Typical startup challenges have been overcome.

• Previous business owners are able to pass along insights and expertise.

As baby boomer entrepreneurs retire and sell their businesses, the business ownership possibilities for younger generations will open up. With this in mind, there are two factors that prospective entrepreneurs should consider: financing the purchase and executing the deal.

In terms of financing, there have always been challenges to raising money to start or buy businesses. Millennials happen to be in an enviable position, as baby boomers will be transferring their wealth to Generation X and millennials in the coming years. Millennials also have other financing options, beyond the more traditional sources of funding, that were not available to previous generations of aspiring business owners. One such financing option is crowdfunding, which became a major option only about a decade ago and is a funding tactic familiar to many younger people. Angel investors are another option. According to the University of New Hampshire’s Center for Venture Research, last year saw an increase in angel investments, which is good news for fledgling business owners.

In terms of executing the deal, one method for navigating the complexities of buying a business is to enlist the services of a business broker or advisor. These professionals can map out a strategy and structure the purchase of a business. This addresses the issue of know-how, at least for the beginning of business ownership.

Here are just a couple of aspects that a broker or advisor can help negotiate:

• Involvement of the seller: Many business relationships are personal and dependent on the business owner. A purchase agreement can include a clause about the seller remaining involved for a set amount of time to introduce the buyer to key customers and to ensure a smooth transition of major relationships.

• Continuation of staff: Employees understand the business’s operations and procedures. A buyer can demand a provision that allows them to walk away from a deal if they don’t believe key staff will remain long enough to transfer their knowledge.

These professionals can also help a buyer avoid pitfalls, including:

• Assuming financial liabilities: The business purchase transaction should be conducted in a way that allows the buyer to avoid assuming debts, sales tax liabilities or payroll tax liabilities.

• Being sued for the seller’s actions:The buyer can demand indemnity to ensure the seller will defend any lawsuits and pay any fees and judgments arising from the seller’s actions.

They also can help a prospective buyer by prescreening businesses for sale and negotiating terms.

There are several ways prospective business owners can find a broker or advisor to work with. Consider asking for local referrals from other people who have purchased similar businesses or asking your local chamber of commerce or economic development office for a referral. Look for online directories and reviews to research and identify professionals in your area.

When vetting a potential broker or advisor, there are also some considerations to keep in mind. Before meeting with one, buyers should be prepared to answer a few questions, such as “What kind of business would be desirable — industry, location, size and so on?” “What financing will be available for a potential purchase?” and “What is the preferred timeline for purchase?”

Look for a broker or advisor who is experienced in buying and selling the kind of business you want to buy and in selling the size and value range of business you seek to buy. To find an experienced professional, look for International Business Brokers Association (IBBA) certification. It’s also key to make sure the broker or advisor has long-standing relationships with attorneys and accountants to help you in the process.

Finally, and related to that last point, a young prospective business owner should have a “due diligence team” that includes an attorney, an accountant and a banker, in addition to the business broker or advisor. These team members can provide a millennial entrepreneur with experience that comes only with time and specialization. They can help assess the benefits, liabilities, risks and opportunities that come with a business — in short, they can help ensure that the price of a business is justified. Together with the right team, millennial entrepreneurs can gain the expertise and the means necessary to become successful business owners.