WASHINGTON (Reuters) – Remember way back in January, when Washington was arguing about taxes, homeowners were having trouble getting refinanced and investors were dumping gold? Hmmm…that makes it seem like 2011 was an uneventful year.
But 2011 forever changed the way you’ll manage your money. Here’s an overview of the big financial stories of the past year, and their implications for your wallet.
By Linda Stern
(Reuters) – Sigh. A lot of people are predicting more of the same for 2012: Another year of stock market volatility, high unemployment, banking industry upheaval, weak housing and more talk about Facebook, mobile commerce, 401(k) plans and taxes.
But maybe that’s just because it’s hard to envision change. Not everything will stay the same. For example, a year from now, we’ll not be having weekly Republican presidential debates, and we will most likely know who the President will be in 2013. Conventional wisdom holds that by this time next year, Facebook will be a publicly traded company and not just a huge time suck.
By Linda Stern
(Reuters) – Here’s the big tax story for 2011: Do you know who your dependents are?
That may sound silly but it’s a big money question, and in this day of multi-generational households, boomerang 20-somethings, aging parents, gay marriages, blended families and domestic partnerships, it’s not an easy one to answer.
WASHINGTON, Dec 8 (Reuters) – Companies are shaking up
their 401(k) retirement plans, trimming lists of mutual fund
offerings and shaving the fees workers pay as they prepare for
new federal rules that will put more plan information in front
“This is dramatic. I have not seen anything like this in 25
years of working with plan sponsors,” said David Wray,
president of the PSCA, a 401(k) advocacy group made up
primarily of employers.
WASHINGTON, Dec 7 (Reuters) – Scott Schuh is a Federal
Reserve Bank economist who spends his days studying the myriad
ways consumers pay for their purchases. After a recent review
of his research, he did something surprising – he gave up his
rewards credit cards, and now pays for everything with a debit
Why? Chalk it up to a highly developed social
consciousness. Schuh says rewards credit cards generate a
“reverse Robin Hood effect” in which shoppers who don’t qualify
for the premier cards subsidize the usually well-heeled folks
who do. That subsidy occurs when merchants charge everyone
higher prices to cover their costs of accepting rewards cards.
WASHINGTON, Nov 30 (Reuters) – Retirement planning almost
always starts with one number: A guesstimate of the percentage
of pre-retirement income you’re expected to need after you
retire. That’s called the “replacement rate” and is often
pegged by industry experts at around 80 percent of a
For example, a recent paper from the Center for Retirement
Research at Boston College titled “How much to save for a
secure retirement,” relies on that 80 percent figure.
“Households with earnings of $50,000 and over needed about 80
percent of pre-retirement earnings to maintain the same level
of consumption,” writes Alicia Munnell, author of the study.
By Linda Stern
(Reuters) – American Airlines passengers should not expect any near-term changes after the airline filed for bankruptcy, but the filing may affect their future plans.
Holiday flights should take off as scheduled, and the carrier says it will honor existing reservations and reward miles. “I think everything’s cool,” said Tom Parsons, head of deals website Bestfares (bestfares.com) and a long-time observer of the airline industry.
WASHINGTON, Nov 16 (Reuters) – Anxious investors have been
dumping their fears on financial advisers in what might be
“They are absolutely petrified,” says Diane Pearson, a
money manager with Legend Financial Advisers in Pittsburgh.
Declining 401(k) balances and abrupt market sell-offs have
people going to advisers and asking for security, safety and
WASHINGTON (Reuters) – Thinking of a home renovation? Smaller might be better. Adding a sweet sunroom or luxe master suite sounds great, but don’t expect to recover the costs anytime soon.
On average, U.S. homeowners who made home improvements in 2011 only picked up 58 cents in home equity on their remodeling dollar, according to the Cost versus Value survey released on Thursday by Remodeling Magazine. That’s down sharply from the 2005 peak, when a new project immediately earned back 76 percent of its cost in higher home prices.
WASHINGTON, Nov 10 (Reuters) – Thinking of a home
renovation? Smaller might be better. Adding a sweet sunroom or
luxe master suite sounds great, but don’t expect to recover the
costs anytime soon.
On average, U.S. homeowners who made home improvements in
2011 only picked up 58 cents in home equity on their remodeling
dollar, according to the Cost versus Value survey released on
Thursday by Remodeling Magazine. That’s down sharply from the
2005 peak, when a new project immediately earned back 76
percent of its cost in higher home prices.