Finance

You Can Retire Rich but Not in the U.S

You can retire rich, provided you don’t live in the US. In fact, the US does not even make it among the top 10 countries in this respect. According to the Global Retirement Index, the countries that are listed as the top 10 places for retirees to live include:

  • Norway
  • Switzerland
  • Iceland
  • New Zealand
  • Sweden
  • Australia
  • Germany
  • Netherlands
  • Austria
  • Canada

The United States falls into the 14th spot of a list that features 43 counties. The list was sourced from Natixis Global Asset Management.

Today, retirees worldwide are more responsible for their personal financial security. Therefore, the countries in the top 10 have implemented regulations that provide easy access to work-based or individual retirement savings programs and accounts.

According to research findings, the US does show a high per capital income and low rates of employment and inflation. However, the country also has a high level of salary inequality, represented by a growing percentage of retirees to work-age adults. That means fewer numbers of workers are able to support or pay into government programs such as Medicare and Social Security.

On top of that. almost 30% of US workers don’t have a retirement account, such as an IRA or a 401(k). The statistics were compiled by Personal Capital.
In turn, about one in every four Americans expects to work until they are 70. The National Institute on Retirement Security also conducted a survey that showed 86% of the participants felt the country is in the midst of a retirement crisis.

The rankings of the 43 above-mentioned countries was based on access to quality healthcare and financial services and the ability for people to live well in a safe and clean environment.

Finance

FiSCA Thanks Congress for for CFPB’s Bad Credit Loan Rules

Last month, the Consumer Financial Protection Bureau (CFPB) unveiled its proposal to rein in the payday loan industry. The consumer federal watchdog agency revealed that it wants to impose income checks for payday loan businesses, ensure consumers can’t borrow too many loans in a short period of time and pretty much overhaul the payday loan business model, which would please many groups nationwide. 9(http://www.wsj.com/articles/cfpb-to-propose-payday-loan-rule-on-june-2-1463615308)

Soon after the CFPB revealed the proposal, many analysts said that the rules would go into effect as early as next year because the CFPB does not need congressional approval. Is that a correct assessment?

Ostensibly, some members of the House of Representatives disagree and are trying to block the CFPB from implementing its new rules. They feel that Congress needs to oversee it and perhaps help delay it for another year or two to ensure the general public has been fully consulted on the matter.

This week, the members of Congress passed House Resolution 5485 and rejected the Sewell-Waters Amendment in a vote of 239 to 184 and 240 to 182, respectively. Lawmakers, as part of the resolution, would help pause the incorporation of the CFPB’s payday lending rules and shun the Amendment that would have given the CFPB funds to enforce the regulations being suggested.

Financial Service Centers of America (FiSCA), the national trade association representing 5,000-member financial service center locations around the United States, published a press release on Friday thanking and congratulating Congress for taking this bipartisan measure to protect vulnerable consumers.

According to the group, millions of consumers can maintain their access to this type of credit. Congress, the organization noted, helped ensure unsecured personal loans would stay around, which often become “lifesaving lines of credit” for “hard-working Americans.”

“Members of the US House of Representatives, and Chairman Crenshaw in particular, are to be commended for standing up for millions of working middle-class consumers in Florida and across the Nation,” said Ed D’Alessio, FiSCA’s Executive Director, in a statement.

“CFPB has ignored the facts, and rushed an ill-conceived and highly political rule-making process with devastating consequences to our customers – the very consumers CFPB is mandated by law to ensure have both appropriate protection and continued access to credit. CFPB has ignored the pleas of states, consumers who depend on short term credit, small businesses which provide state and federally regulated short term credit, and our Nations’ insured depositories.”

It warned, however, that should the CFPB’s proposed rules and restrictions become the federal law of the land then it would limit “legal credit options for millions of Americans.” Moreover, it would give the federal government power over the states.

“By proceeding with these overly prescriptive rules, the CFPB is directly ignoring the wide-ranging and serious concerns of lawmakers, stakeholders in the financial services industry and the ordinary Americans who use these services every day,” the trade body said. “We stand with the House of Representatives in stopping the implementation of this discriminatory and economically devastating rule.”

Critics of the payday loan industry often argue that lenders of high-interest, small-dollar loans send the impecunious into endless spirals of debt and ruin more lives than they help. Proponents of the business sector present the case that this alternative form of credit is necessary to ensure consumers can pay their rent, cover their utility bills and even put food on the table.

The matter of payday loans have become a hot button issue for states across the country. Eighteen states have prohibited the financial product. President Obama has made it an important issue for the CFPB a couple of years after being elected.

Finance

Raising Your Deductible on Your Homeowner’s Insurance May Not be in Your Best Interest

If you believe increasing the deductible on your homeowner’s insurance is a quick way to save extra money, you may be defeating the whole purpose of insuring your home in the first place. According to a recent CNBC report, elevating your deductible from $500 to $1,000 cuts the annual premium by seven percent. That is the finding of a new analysis by InsuranceQuotes.com. If you increase the deductible from $500 to $2,000, the average savings take a jump to 16 percent. When the deductible is set at $5,000, homeowners save 28%.

When you consider that the average insurance premium in the US is $1,096, those simple increases could reap savings in the amount or $77, $175 and $307 respectively. However, that being said, the savings also differ depending on where a homeowner lives. For example, a resident in North Carolina can reduce her homeowner’s premium by almost 40% by jacking up the deductible to $2,000. Someone in Hawaii who opts for the same cover saves only about 5%. Nevertheless, according to financial experts, making the decision to raise your deductible is definitely a risk. You don’t want to end up being insurance poor.

In fact, according to research, 50% of people in the US claim they wouldn’t be able to afford an emergency repair of only $400 without borrowing money or selling something of value. A Bankrate survey also concluded that about 66 million Americans do not have anything saved for an emergency. Experts question people who raise their deductibles, especially those who cannot even come up with $500 to cover an emergency.

According to financial specialists then, if you already don’t have much saved, it is probably smarter to save the money first and increase your deductible later. In addition, financial experts advise to review your policy for any coverage gaps of some of the more expensive or common claims. You may be able to increase your deductible and obtain more protection overall by signing up for coverage in the form of an umbrella policy or a rider for valuables.

If you wish to raise your deductible solely on your homeowner’s policy, then make sure you can actually cover the deductible should you need to use the insurance. If you don’t have enough money saved to cover a higher deductible it is better to save the money first before you raise your policy’s deductible.