Stressed-out Americans see hope in retirement

Is retirement the cure for what ails us? A significant number of Americans seem to think so, according to a survey released today. The survey was sponsored by Princess Cruises, which presumably believes relief might also be found on a deck chair or in the midnight-buffet line.

The survey asked about people’s ability to balance work demands and personal priorities. Nearly three-fourths (72 percent) reported their lives were out of balance, with 15 percent saying they didn’t expect that to change until they retired.

This expectation puts a pretty big burden on retirement. Still, the 15 percent may be onto something. Most of the studies I’ve seen over the years show that retirement can indeed be a happy phase of life, especially if you're reasonably healthy, have enough money to live on, and keep up meaningful contact with the outside world. The most satisfied retirees seem to be those who planned ahead and made it happen rather than letting it happen to them.

Toward that end, we have a lot of retirement-planning advice on this site, including this pre-retirement timetable and an article on why retiring early isn’t always a great idea.

And, in case retirement seems too far over the horizon, these articles on anxiety, tension headaches, and insomnia might offer some stress relief in the meantime. — Greg Daugherty

PS: We'd especially welcome any comments/advice from our retired readers on whether retirement has lived up to your expectations and how people can get more out of it. Please comment below.

Greg writes the “Retirement Guy” column each month in the Consumer Reports Money Adviser newsletter.

Consumer Reports Index: Consumers' mood low, troubles rise

Consumer sentiment remains low for many Americans, and consumers are reporting more financial troubles, according to the latest Consumer Reports Index, published today. Lower-income people—those making less than $50,000 a year—are shouldering more financial pain than the rest of the population. And consumers living in the Western part of the U.S report a worse financial outlook than do those in other regions. 

The Consumer Reports Index, a composite of several measures, shows consumer sentiment nationwide at 40.3, rising only slightly from a low, 38.1 last month. When the index is greater than 50, more consumers are feeling positive about their financial situation. 

At the same time, this month's Consumer Reports Trouble Tracker Index, which measures negative household financial events, rose to 66.7, its highest ever. The percentage of consumers who reported negative events dropped slightly, but the total number of negative events was up, from 1.6 to 1.9 per household, the greatest increase in 6 months.

Some details:

• Job losses mounted. The Consumer Reports Employment Index declined markedly in October. The proportion of respondents reporting job losses was 7.7 percent, compared with 5.6 percent last month.

• Lower-income households had more troubles than average. The Consumer Reports Trouble Tracker revealed that more than a quarter (26 percent) were unable to afford afford medical bills or medications in the past 30 days, versus 15.1 percent for all Americans. Twelve percent of this group lost a job or was laid off, compared with 7.7 percent of the general population. Another 12 percent lost medical care or experienced reduced coverage, compared with 7.2 percent of total respondents.   

• Spending stayed the same. The Consumer Reports Past 30-Day Retail Index shows purchases in the past 30 days about the same as in the prior month. The index was up for major appliances, but down for major home electronics and personal electronics. 

• Consumers plan to spend more for electronics, but not for other items. Planned purchases of personal and major electronics were up for October versus the prior month. In general, however, plans for future purchases remained about the same as our measure in September. 

• Sentiment was worst in the West. Consumer sentiment took a dive in the West, down to 32.8. In the North/Central region and the South, sentiment remained even, at 41.9 and 43.2. Residents in the Northeast reported a modest uptick in consumer sentiment, to 42.3.

"The economy is in a precarious position balanced between recovery and further decline," concludes the report, published by the Consumer Reports National Research Center. Without substantial improvements as measured by the Trouble Tracker, Employment and Retail indices, it adds, "it is doubtful that a meaningful consumer recovery will be mounted in this calendar year."

The Consumer Reports Index reflects results of a nationwide, representative survey of Americans conducted last week by the Consumer Reports National Research Center. To read more about the Consumer Reports Index, including how it was conducted, click here.

Plan to work longer? Here's some advice

Yet another new survey, this one from Bankrate.com, shows most Americans (a stunning 75 percent, in fact) plan to cling to their jobs as long as they can during their “retirement” years. This is a trend we’ve been reporting on here for some time, and while it predates the recession, there doesn’t seem to be any question that the thrills-and-chills economy of the past year has helped drive those percentages into the high double digits.

Here’s some of our advice:

...on deciding when to retire (this one’s a video).

...on the advantages of working longer.

...on starting your own business in retirement.

...and, on working plus other alternatives, such as volunteering or going back to school.  —Greg Daugherty

Greg writes the “Retirement Guy” column each month in the Consumer Reports Money Adviser newsletter.

Sour economy pits age against youth

Last month, I celebrated my 20th anniversary with Consumer Reports, and while I generally don't make a big deal out of milestones, this one meant a lot. My father was a blue-collar worker who came of age during the Great Depression, and his frugal ways rubbed off on me. He advised me to keep my money in the bank, never invest in anything riskier than a CD, and limit the balance in passbook savings account to the maximum insured by the FDIC. Since I had woefully little savings back in those days and retirement was an alien concept, his words of wisdom sounded perfectly reasonable.

More work-at-home, get-rich-quick nonsense

As I explained in a recent blog, my name is making the rounds on business opportunity and work-at-home sucker lists, thanks to my signing up for some suspicious-looking work-at-home schemes for my Consumer Reports article, “Beware of work-at-home stings.”

The scam mail just keeps on pouring in. Here’s more of a sampling.—Jeff Blyskal

• “Official information re: $25,000.00 grant from U.S. Government. APPROVED. Action required ASAP for release…Deadline for response: 36 hours from receipt. Message: Our office is attempting to reach you. Urgent matter regarding upcoming release of government funds. Estimate of funds pending: $25,000.00…Funds may be used at your discretion (bill payment, travel, continuing or advanced education, healthcare).”

• “WARNING: Don’t let business opportunity scam artists rip you off…I’ll be perfectly candid with you. I’m not an altruist or philanthropist. I’m a businessman and realist. It so happens that I can increase my profits and build my business by offering you this unparalleled opportunity…”

• “I’m a single mom and I can’t believe that I found this program. I generated $9,000 in my first 12 days!”—Karen, Oregon

• “Earn $500 to $1,000 every week in just 30 minutes a day sitting at your kitchen table!...helping my company with some simple paperwork…If you are sick of ‘pie in the sky’ offers and want a real, genuine way to earn $500 to $1,000 (or even more) every week in about 30 minutes a day or a couple of hours once a week if you prefer, then you are the person I want to hear from.”

• “Don’t be the ‘first’ mouse! …It’s the ‘second’ mouse that always gets the cheese…you pay only $100 and that will even be credited back to you if you choose to participate! Therefore, participants (winners) actually pay ‘nothing’ for the only plan that costs nothing to promote and will finally get thousands of dollars delivered right to your front door so that you can ‘finally’ have your chunk of CHEESE!…Let me assure you that this is not a trap. It’s real, very real! So get ready. Something wonderful is about to happen! Soon, very soon, you will be living ‘the good life’ and ‘thanking’ the participant (winner) below for spending their money to send this flyer to you.” 
  

Work-at-home schemes don't pay

Would you fall for this nonsense?

Last March, I intentionally played dumb and signed up for several suspicious-looking work-at-home schemes to report and write a Consumer Reports Money article, “Beware of work-at-home stings.”

When you give your name, address, and credit card number to the promoters of get-rich-quick come-ons, they may sell your name to other scammers in search of an easy mark. Before last March, I don’t recall receiving any such offers. In the four and a half months since, however, I’ve received about a hundred print letters, postcards, catalogs, emails, and telemarketing calls promising riches without much work. So I guess I’m now a hot new prospect on the fraud industry’s sucker lists.

Among my mailbag of outrageous promises, tired cliches, and bad photos of “satisfied” customers were these most transparent claims:

• “Please keep what I tell you a secret…There has existed for many years an exclusive association, a secret society, of some of the world’s most famous and powerful people…This association has uncovered some shockingly powerful secrets…The association has analyzed your profile…It seems you, Jeffrey, possess several rare traits we are searching for. Because of these traits…you are eligible to become part of our exclusive club and to share our Greatest Kept Secrets, too, absolutely free!”

• “The worse the economy gets, the MORE money you make…[This business] has all the perks of your own business…no boss…no commute…no ‘office hours’…all the vacation you want…You can sit home and relax while you do this. It’s no wonder many people who do this make well over $100,000 every year!”

College students and personal finance, Part 4: Financial independence

Editor's note: As the new college year revs up, Consumer Reports Money Blog devotes several days to the personal finance issues of college students. Here, Nicole Willis, one of our college-age summer interns, muses on what she's learned–and has yet to learn–about financial independence:

My four-and-a-half year ride through college, financially, consisted of both my dad’s hand gripping the back of my bicycle seat and my mom holding onto one of my handlebars. While I moved out of my family’s suburban Orlando house and onto my large university’s campus, I was only seven miles away and visited home at least weekly for my dad’s asparagus and pine nut pasta. While I did my own laundry, I did it at home in a twenty-first century front-loading machine without quarters. And when it came to my finances, I was very laissez-faire: my parents not only funded everything (except my car’s gas and the occasional night out, for your information) but they kept track of everything that needed to be paid for: my tuition, my sorority bills, car insurance, cell phone bill, etc. My tuition and textbooks were taken care of, however, by the Florida Prepaid College Program and by a scholarship I received in high school.

The only time I interacted with money-related acronyms in high school and college was when I was recently hired for a new job, which occurred about once a year since I was 16. When eagerly filling out the preliminary paperwork, any and all forms with a bold W or I on the top instantly turned my eagerness into a bowl of mashed potatoes. But I luckily recalled my dad telling me upon getting my first job to put a “1” at the bottom, and I was OK.

Needless to say, I still have much to learn about being financially independent. I need to be tutored in all that’s involved in paying for grad school, finding my own health insurance, saving for my retirement…the mashed potatoes feeling is coming on again. I currently have a part-time job to return to in Orlando in the fall, and am actively seeking that first full-time job for when I’ll be an alumna in January. I just have to remember “1” for when that next first day comes.

Nicole Willis is a fifth-year, "super senior" at the University of Central Florida, majoring in journalism and psychology.

Back-to-school economy II: The cost of a quiet place to study

In a recent post, I noted the trend of more college kids living at home because of the recession. Note to stay-at-home-students: Don't expect too many perks besides the break on living expenses and Mom’s cooking. Like, say, a quiet room where you can study. In a recent survey, our experts found that the average cost to remodel a 12-foot by 12-foot room into a home office, including custom cabinets and wiring for phones and electronics, is $27,193. That doesn’t include the computer.–Jean Pietrobono

What my parents taught me about money, #1

Editor's note: What did your parents or older relatives teach you about saving, spending, and money management? Those who lived through or after the Great Depression and the lean WWII years had experiences that may resonate in 2009. In the coming days, members of the Consumer Reports Money staff will be sharing family lessons about money, both positive and negative. You're welcome to share your experiences, as well. Here, the first in the series:

My father, Henry Blyskal, who was born in 1925, before the Great Depression, and died in 1998, shortly before the dot-com bubble burst, taught me that hard work pays, and long hours pay even more. 

He set the example by taking pride in being the family "breadwinner" and always saying "yes" to overtime at the New Jersey factory where he worked his entire life as a pipefitter, then foreman. He also earned extra money doing outside work around town as a carpenter. 

Payday was a great ritual. Every Friday, my father stood at the kitchen table like a blackjack dealer, and laid down crisp $20 bills, one-by-one, with each successive note slightly angled and fanning out to the right. Many times he would announce, "I made more in overtime than in regular pay this week." 

California taxpayers: How to benefit from your state IOU now

The basket case government of California, which has been unable to raise taxes and unwilling to cut spending, has come up with a bill-paying scheme that your fiscally irresponsible big brother probably used on you after filching money from your piggy bank when you were kids: I.O.U.'s

On July 2, the California State Controller began issuing I.O.U.'s for state obligations—including tax refunds. Most of California’s 12.8 million taxpayers are a trusting lot. This year, 65 percent of them let Sacramento withhold more in state income taxes than was necessary. The result: More than $6.6 billion in taxpayers’ money piled up in the state’s coffers. Of course, the state spent this money, rather than hold it for safekeeping. The average refund due is a not-unsubstantial $789.

The I.O.U.'s, known as “registered warrants” in financial circles, are supposed to be redeemable on October 2, “assuming there is adequate cash in the Treasury,” says Controller John Chiang. The California Bankers Association said in a press release, "We have learned that if sufficient cash is not available by the October 2, 2009 maturity date, registered warrants may be issued to cover those previously issued registered warrants.” 

California taxpayers, shouldn’t sit still for this. We advise you to turn your California I.O.U. into cash right now. Here are four ways to do it: