Poverty and debt in the USA

From one end of the spectrum....

 Retirees' new pastime: Cutting costs in all sorts of ways

Many retirees are finding their golden years tarnished by low returns on investments and smaller nest eggs than they'd hoped

USA Today,

7 September, 2012

Meanwhile, longer life spans, increased expenses — particularly rising health care costs — plus a volatile stock market and low interest rates on savings have baby boomers facing tough choices.

While seniors don't necessarily have to give up trips to see the grand-kids or spend afternoons clipping coupons before heading off to an early-bird special, eliminating some unnecessary expenses and keeping an eye out for ways to save can help keep precious dollars at home.

"This is the first generation that is experiencing multidecade retirements, and this is happening in a world where the burden for retirement planning has shifted from corporate big brother and traditional defined benefit pension plans to each of us individually with a three-legged stool of Social Security, employer based/IRA type retirement savings and personal taxable savings," said Manisha Thakor, CEO and founder of MoneyZen Wealth Management.

"That's a huge shift. It means you have to figure out how to make your retirement funds last much longer than previous generations, in the absence of fixed monthly pension to help define your budget for you," she said....

For article GO HERE

....to the other.

 

Student Loans: Debt for Life

Businessweek,

This much we know: College pays. You can lose your house to foreclosure, but never your education. Four-year college graduates’ pay advantage over high school grads has doubled over the past 30 years. If money for tuition is tight, the advice goes, borrow what you need. Students have been listening. In 2010 student debt exceeded credit-card debt for the first time. In 2011 it surpassed auto loans. In March, the Consumer Financial Protection Bureau announced that student debt had passed $1 trillion. It grew by $300 billion from the third quarter of 2008 even as other forms of debt shrank by $1.6 trillion, according to a separate tabulation by the Federal Reserve Bank of New York. In a press briefing at the White House in April, Education Secretary Arne Duncan said, “Obviously if you have no debt that’s maybe the best situation, but this is not bad debt to have. In fact, it’s very good debt to have.”

If student loans are good debt, how do you account for the reaction of Christina Mills, 30, of Minneapolis, when she found out her payment on college and law school loans would be $1,400 a month? “I just went into the car and started sobbing,” says Mills, who works for a nonprofit. “It was more than my paycheck at the time.” Medical student Thomas Smith, 25, of Hamilton, N.J., is $310,000 in debt and is struggling to make ends meet even before beginning to repay his loans. “I don’t even know what I eat,” he says. “I just go to the supermarket and buy the cheapest thing I can and buy as much of it as I can.” Then there’s Michael DiPietro, 25, of Brooklyn, who accumulated about $100,000 in debt while getting a bachelor’s degree in fashion, sculpture, and performance, and spent the next two years waiting tables. He has since landed a fundraising job in the arts but still has no idea how he will pay back all that money. “I’ve come to the conclusion that it’s an obsolete idea that a college education is like your golden ticket,” DiPietro says. “It’s an idea that an older generation holds on to.”

For article GO HERE