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Richer but No Happier

Jonathan Clements  |  May 22, 2015

“TAKEN ALL together, how would you say things were these days? Would you say that you are very happy, pretty happy or not too happy?” We now have the latest answers to this question, thanks to the release last month of results from the 2014 General Social Survey.
In 2014, 32.5% of Americans said they were very happy, versus a 42-year average of 33.3%. Meanwhile, 27% said they were satisfied with their financial situation,

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What Women Want

Jonathan Clements  |  May 19, 2015

WALL STREET LOVES women—or, at least, it loves to pitch them products through special marketing campaigns. While women’s financial needs differ somewhat from men’s—for instance, they live longer and they’re more likely to need nursing-home care—it’s always struck me that these programs are more about selling than substance.
For further proof, check out this delightful email I received last week: “I recently went to a workshop called ‘Retirement Strategies for Women’ that was put on by Valic. 

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Stats to Die For

Jonathan Clements  |  May 13, 2015

I JUST FINISHED reading the Society of Actuaries’ summary of key findings from its “2011 Risks and Process of Retirement Survey Report.” From this, you might conclude two things. One, I’m way behind on my reading. Two, I don’t have a very exciting life. Both may be true. Still, I found the report fascinating. Here are three excerpts.
First, according to the report, “the two major factors in determining longevity are genetics and lifestyle choices.

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Ruled by Rules

Jonathan Clements  |  May 10, 2015

MOST OF US struggle with self-control. We eat too much, exercise too little and spend excessively. One solution: Adopt rigid rules of behavior.
For instance, I make it a rule to exercise every morning for at least 40 minutes, always buy whole wheat bread, avoid caffeine after 9 a.m. and eat fruit as a midmorning snack. I’ve followed these rules for so long that they’re no longer rules, but rather ingrained, unquestioned habits.
Not surprisingly,

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Tips for Grads

Jonathan Clements  |  May 7, 2015

THIS IS GRADUATION season at colleges across America. Got a kid heading into the workforce this year? Here are three pieces of advice you might pass along.
First, deal with your financial goals concurrently, not consecutively. In other words, don’t save for the house down payment in your 30s, the kids’ college in your 40s and then turn your attention to retirement in your 50s. If you do that, it will be almost impossible to amass enough for a comfortable retirement.

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An Odd Argument

Jonathan Clements  |  April 27, 2015

IT’S ONE OF THE stranger arguments for claiming Social Security retirement benefits at age 62—but I’m hearing it with increasing frequency. The contention: We should claim benefits early because we’ll enjoy the money more in our 60s, when we’re traveling and spending more, than in our 80s, when we’ll likely be sticking closer to home.
It isn’t clear to me that we should expect to spend less in our 80s, when we may have significant medical expenses.

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Bursting Bubbles

Jonathan Clements  |  April 22, 2015

EVER HEARD of Shopkins? Until six weeks ago, I was blissfully ignorant. But suddenly, it was all my 10-year-old stepdaughter could talk about.
Shopkins are small made-in-China plastic creatures that depict everyday household items—think coffee pots, pieces of cake and toilet plungers—with faces crafted onto them and holes so they can rest atop pencils.
Sarah’s friend Nadia had pronounced Shopkins “cool” and owned more than 100. Sarah was soon scrounging up every penny she could find to invest in Shopkins.

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Their Own Cooking

Jonathan Clements  |  April 17, 2015

I JUST PURCHASED a 2013 Honda CRV. I told the “sales consultant” that I was paying cash. He tried to convince me to take out an auto loan, but I explained that borrowing at 3.4% didn’t make sense when I had cash in a savings account earning 0.25%.
Next, he asked whether I had ever considered leasing. I replied that leasing can make sense if you want to drive a new car every three years—but getting a new vehicle every three years was an expensive habit and I planned on keeping the car far longer.

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Fees vs. Commissions

Jonathan Clements  |  April 13, 2015

I RECEIVED an email yesterday from a broker in Texas with the subject line: “Why do you want to put good honest advisors out of business?” The broker argued that I was being unfair in favoring advisors who charge fees over brokers who charge commissions.
My response: “You’ve convinced me that you do a fine job for your clients. But there’s plenty of evidence that many advisors don’t. Their clients—to use your phrase—need to get ‘a fair shake.’ How can we improve the odds that,

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Apple Pie, Anyone?

Jonathan Clements  |  April 8, 2015

WHEN WE WANT to describe something as wholesome, we say “it’s as American as motherhood and apple pie.” Parenting may indeed be virtuous. But does it make us happier? The research is mixed.
On average, people with kids say they’re happier. But if you dig into the data, it turns out that having children neither helps nor hurts happiness, and instead the big boost to happiness comes from being married. Indeed, folks who are single—both those raising children and those who aren’t—report being distinctly less happy than those who are married.

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Breaking Even

Jonathan Clements  |  March 17, 2015

IT’S THE NEVER-ending debate: When should retirees claim Social Security? This piece, I hope, will at least serve to clarify the basic math involved.
Let’s dispense with a few preliminaries. If you have young children, it may be worth claiming at age 62, so your kids can receive family benefits. Meanwhile, if you’re married and you were the main breadwinner, it’s probably worth delaying benefits to age 70 to get the larger monthly check.

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It Pays to Delay

Jonathan Clements  |  March 9, 2015

AMONG EXPERTS on Social Security, there’s a broad consensus that most folks should delay Social Security to get a larger monthly check—and yet roughly half of retirees claim benefits at 62, the earliest possible age.
Many of these retirees, I suspect, take benefits right away because they need the money or they haven’t given the issue much thought. What about those who have wrestled with the topic and still insist that claiming at 62 is the right strategy?

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Farewell, Tom

Jonathan Clements  |  March 4, 2015

BESTSELLING AUTHOR Thomas J. Stanley died in a car accident over the weekend at age 71. His death has received scant publicity—which is surprising, given the popularity of his books and his impact on the way we think about money.
With co-author William Danko, Stanley wrote the 1996 blockbuster, The Millionaire Next Door. Who are the rich? It isn’t the folks with the flashy cars and designer clothes. Those aren’t signs of wealth.

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Take the Long View

Jonathan Clements  |  February 14, 2015

MOST OF US will enjoy wonderfully long lives. For those born in 2000, the average life expectancy at birth was age 80 for men and 84 for women. That’s a vast improvement since 1900, when life expectancy was age 52 for men and 58 for women.
The bad news: While men can now expect to live 28 years longer and women 26 years longer, the bulk of the improvement—20 years—came in the first half of the 20th century.

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Where There’s a Will

Jonathan Clements  |  February 11, 2015

ESTATE PLANNING is easy for most folks—but many don’t bother. Surveys regularly find that half of all adults don’t have a will. Yet a will, the right beneficiaries listed on retirement accounts and life insurance, and correct titling on property (such as the house you own jointly with your spouse with right of survivorship) are all most of us need.
Sure, there are other niceties, like drawing up durable powers of attorney for financial and health-care matters,

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