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Here’s How the GOP Might Finally De-Fang the CFPB

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Update: The Consumer Financial Protection Bureau on Monday released a new five-year strategic plan, outlining a less aggressive approach to its mission of protecting consumer rights.

The consumer watchdog revised its mission and vision for 2018 through 2022. Under the new mission, the CFPB will be “equally protecting the legal rights of all,” including consumers and big financial institutions the bureau regulates.

“If there is one way to summarize the strategic changes occurring at the Bureau, it is this: we have committed to fulfill the Bureau’s statutory responsibilities, but go no further,” said the federal agency’s acting director Mick Mulvaney, in a press release.

Refocusing CFPB’s mission is in line with a spade of drastic changes to the bureau under Mulvaney, who was tapped by President Donald Trump to take the helm at the federal agency in November.

The CFPB had already had quite a few eventful weeks prior to the memo. Or, according to critics and consumer advocacy groups, it had endured a flurry of “assault” launched by Mulvaney.

In the past few weeks, Mulvaney has: 

  • Requested $0 in quarterly funding from the Federal Reserve, instead, saying it would make do with dipping into its reserve fund.  
  • Issued a call for public comment on its enforcement, supervisory, rule-making, market monitoring and education activities. 
  • Wrote to the CFPB staff in a memo that the agency will have a more limited vision.  

Meanwhile, the CFPB, under Mulvaney, has: 

  • Dropped a lawsuit against four online payday lenders whom the CFPB alleged in its original complaint had preyed on working families by making loans with interest rates up to 950%.  
  • Announced it would “reconsider” federal restrictions on payday loans. 
  • Announced a yearlong delay to the effective date of a 2016 prepaid rule that would have protected prepaid cardholders.  
  • Dropped a four-year investigation into World Acceptance Corporation, a payday lender, from which Mulvaney has received $4,500 in campaign contributions in the past. 

The moves show that Mulvaney, as expected, is actively seeking to overhaul the consumer watchdog. MagnifyMoney interviewed several experts, who all say this trend of reversing rules, dropping investigations and limiting the mission of the consumer watchdog will continue. 

Yet it’s not all bad news. After a long-fought legal battle, the CFPB won a major court victory this week. In a case questioning the constitutionality the CPFB, the Court of Appeals for the District of Columbia Circuit reversed its own decision that ruled it unconstitutional in 2016.

Conservatives have long decried the independent nature of the agency and its sweeping level of oversight in the financial sector, which includes the freedom to write new rules and regulations in the interest of consumer protection.

What’s at stake? 

The CFPB is a U.S. government agency responsible for establishing consumer protection regulations and regulating key parts of the financial sector, such as the mortgage and debt collection industries. It was established in the wake of the 2008 financial crisis as a centerpiece of the Dodd-Frank Wall Street Reform and Consumer Protection Act. 

The agency has zealously targeted bad actors in the financial industry since its creation, reclaiming nearly $12 billion for more than 29 million consumers. Its latest high-profile actions included fining Wells Fargo in the unauthorized accounts scandal and creating new rules around payday lending. It has also rolled out new regulations in the mortgage, credit card, debt collection and prepaid card sectors.  

The Trump administration and Republicans have long sought to curtail the CFPB’s power as part of a broader effort to lighten federal regulation over financial institutions.    

Richard Cordray was the agency’s first director, holding office from 2012 until he announced he was cutting his tenure eight months short at the end of November 2017. He had been criticized by Washington conservatives but well-received by Democrats and consumer advocates.  

Mulvaney, head of the Office of Management and Budget, took over the bureau in a drama that unfolded into a lawsuit. The fight over who is the legal boss of the bureau is still ongoing 

A former South Carolina representative, Mulvaney had said in a 2014 interview with the Credit Union Times that the CFPB was “a joke…in a sick, sad kind of way.” In 2015, he co-sponsored a legislation to eliminate the agency.  

How the GOP could dismantle the CFPB 

Legislative action … not likely 

Last year, the GOP tried to pass the Financial CHOICE Act, which would have repealed the Dodd-Frank Act and, along with it, the CFPB. The bill passed the Republican-led House in June along party lines, but didn’t make it to the Senate. 

Republican supporters of the act claimed the Dodd-Frank Act was unnecessary. Meanwhile, legal experts said deregulation would pose systemic risk, negatively affecting financial reform. 

Jim R. Copland, legal director for the Manhattan Institute and a critic of the CFPB, told MagnifyMoney eliminating the agency completely would be difficult under the current Senate structure. 

“Without 60 votes you cannot get ordinary things through the Senate,” Copland explained. “And neither party seems willing to compromise with the either on most legislation.” 

Copland added that an unusual case would be for the Supreme Court to strike down some elements of the CFPB, forcing the Congress to restructure the agency. But he thinks it’s unlikely to happen given the court has been hesitant to do so with Obamacare. 

Melissa Stegman, senior policy counsel on the federal policy team of Center for Responsible Lending, a nonprofit, nonpartisan organization based in Washington, D.C., said she thinks legislative action to get rid of the CFPB is “extremely unlikely.”  

“My impression is that there isn’t even much of an appetite to do that legislatively, because Mulvaney is already doing it through the administrative process,” she said. “They don’t even really need to purse anything externally. It’s like a self-sabotage as opposed to having the sabotage coming from the Congress.” 

Death by a thousand paper cuts 

Indeed, there are plenty of administrative maneuvers to scale back the bureau, which is well underway. It’s clear Mulvaney is already utilizing this strategy, given the small ways he has already scaled back the agency’s operations.  

He has support from Republicans on Capitol Hill as well.  

In late October, Senate Republicans killed an arbitration rule that the consumer watchdog wrote, which would have made it easier for Americans to file class-action lawsuits against big financial institutions. The treasury department had released a report against the rule in an unusual move the day before.  

“The administration can’t get rid of an agency constructed by the Congress, although they certainly can change the focus and direction of an agency,” Copland said. “I think that’s happening. At least once they get their nominee in place.” 

Stegman pointed out Mulvaney’s appointment itself is a backdoor way to overhaul the bureau. 

Freshly appointed in November, Mulvaney announced a 30-day hiring freeze at the CFPB and an immediate halt on any new regulations, rules and guidances. 

In a Jan. 24 memo to the CFPB staff, an adapted version of which was published in The Wall Street Journal, Mulvaney said he had no intention of shutting down the bureau, but the agency will have a different mission under his leadership. 

“We will exercise, with humility and prudence, the almost unparalleled power Congress has bestowed on us to enforce the law faithfully in furtherance of our mandate,” wrote Mulvaney. “But we go no further. The days of aggressively ‘pushing the envelope’ are over.” 

Mulvaney’s deregulatory agenda has critics on guard. 

“He’s made public comments [that] he sees his constituency and the people that he cares about equally as corporations and consumers, which is completely counter to the CFPB’s mission to specifically protect consumers,” Stegman said. ”That’s really concerning.” 

Under Mulvaney, Stegman expects cases that may have been under investigation to be dropped, and changes be made to rules that already have been made final. 

For instance, the Home Mortgage Disclosure Act, a 2015 rule expected to assess trends in mortgage lending and originations, ensuring that companies follow the laws, was announced to be reopened last December. 

Stegman said concerns have also risen that CFPB’s Consumer Response Database, a public database that stores more than 1 million complaints about financial products and services since 2011, may go private. 

Besides the CFPB’s research agenda possibly dramatically shifting, Stegman worries that pending CFPB rules — such as on erroneous debt collections or exorbitant overdraft fees — will “never see the light of day or be harmful for consumers.” 

“It’s not a priority for Mulvaney,” Stegman said. “So he’s not gonna pursue this.” 

This story has been updated. It was originally published Jan. 31, 2018

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Citibank to Repay $335 Million to Consumers in CFPB Settlement

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Last week, Citibank agreed to repay $335 million in fines to an estimated 1.75 million consumers, as a result of a settlement with the Consumer Financial Protection Bureau. The settlement found that Citibank failed to reassess and adjust APRs on 1.75 million credit card accounts over an eight-year period.

Under the Truth and Lending Act, creditors must reassess APRs at least once every six months and maintain proper documentation, providing written notice when APRs increase and why they rose.

While the act doesn’t require creditors to reduce consumers’ APRs, it does require them to take reasonable action to ensure they are charging consumers fair and reasonable rates. The CFPB found that Citibank was not abiding by these regulations, hence requiring the $335 million repayment to consumers.

While Citibank is required to repay consumers, they did not receive a fine from the CFPB since they, “self-identified and self-reported the violations to the Bureau, and self-initiated remediation to affected consumers.”

“Citi is pleased to have resolved the matter with the Bureau, and we reiterate our sincere apologies to our customers for not correcting these issues sooner,” Citibank said in a statement.

“Citi estimates that about 90 percent of the interest rate savings due to customers were delivered as required. Citi is currently issuing refunds for the remainder to 1.75 million credit card accounts. Refunds, which will average $190, will continue over several months and be largely completed by year-end.”

Consumers rights for getting APRs reevaluated

Per Chapter 3 of the Truth and Lending Act, consumers have several rights when it comes to APR increases and the subsequent revaluation required by creditors.

Here’s a breakdown of your rights:

  • Generally, APRs can’t be increased within the first year of account opening. There are a few exceptions that must be disclosed to be in effect; they include an increase due to: the end of a promotional period, a variable APR change, the end of a temporary hardship agreement or a minimum payment not received within 60 days of the due date.
  • Creditors must provide written notice if your APR is increased. This notice includes reasons why your APR increased.
  • If your APR was increased, it should be reevaluated at least once every six months. During these reviews, your creditor should reassess the factors it initially considered when it increases your rate, to see if those factors have changed and whether your rate can now decrease.

Tips to save on credit card interest

Complete a balance transfer. If you are currently carrying a balance on a credit card with a high APR, completing a balance transfer can be a great way to save on interest charges and get out of debt. You can transfer your balance to a balance transfer credit card offering a low or 0% intro period, and benefit from intro periods as long as 21 months. During the intro period, you can take the needed time to pay back balances while avoiding high interest charges. Just beware balance transfers typically come with a 3% fee, but this is often outweighed by the amount you save in interest. However, there are intro $0 balance transfer fee cards available that can increase your savings.

Use a card with an intro 0% APR for new purchases. If you carry a balance month to month or plan on making purchases that you can’t pay for by your statement due date, a credit card with an intro 0% APR for new purchases can save you money. These cards won’t charge interest during the intro 0% APR period — which can be as long as 20 months. So any recurring expenses you have or new purchases you may make won’t rack up interest charges. Just remember to pay your balance in full before the intro period ends so your balance isn’t hit with the ongoing APR.

Negotiate with your bank. Some banks are willing to work with you if you are struggling to make payments or are incurring high interest charges. You can try speaking with a bank representative to see if they can work out an agreement where they lower your APR. Even if it’s just temporary, a lower APR for a short period of time is better than none at all. Try to pay each bill on time and in full so you don’t have to worry too much about your APR and avoid interest charges.

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Student Loan Interest Rates Are Going up Again

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Interest rates on federal student loans will go up for the second year in a row, with borrowers for the 2018-19 school year paying 0.6 percentage points more than last year to take out loans from the Education Department.

  • Direct subsidized loans for undergraduate borrowers: 5.05%
  • Direct unsubsidized loans for undergraduate borrowers: 5.05%
  • Direct unsubsidized loans for graduate or professional student borrowers: 6.60%
  • Direct PLUS loans for parent, graduate and professional student borrowers: 7.60%

Why loan rates are going up

Federal student loan interest rates reset every year. Per legislation signed into law in 2013, the rates are based on the high yield of the 10-year treasury note during the last auction held before June 1. The rates remain in effect for all loans disbursed in a 12-month period between July and June of the following year. On May 9, the 10-year note had a high yield of 2.995%.

Once the auction occurs, the rates are calculated by adding several percentage points to the 10-year treasury note yield, to cover the “administrative costs” of issuing the loans, according to the 2013 legislation that enacted this system. For undergraduate loans, the rate is calculated by adding 2.05 percentage points. For direct unsubsidized graduate loans, add 3.6 percentage points, and for PLUS loans, add 4.6 percentage points.

Interest rates, in general, have been on the rise over the last few years, so the bump in cost of borrowing isn’t a surprise. The good news is that Congress set a cap on student loan interest rates when it came up with the new formula. The bad news is those caps are pretty high, so student loan interest rates are likely to continue rising, as long as we remain in this rising-rate environment.

Interest rates cannot exceed 8.25% for undergraduate borrowers, 9.5% for graduate borrowers with direct unsubsidized loans and 10.5% for PLUS loan borrowers. Even though rates increased significantly this year, they have much more room to grow, which we may see if rates continue along the path they’ve been on recently.

What this rate change means

For the most part, borrowers with existing federal student loans will not see their rates change, as all federal student loans disbursed after July 1, 2006 carry fixed interest rates.

Students and parent borrowers taking out federal education loans between July 1, 2018 and June 30, 2019 will pay the new interest rates listed above. The rates will remain in effect for the life of the loan.

How to lower your student loan interest rates

Student loan borrowers have few options for lowering their interest rates. You could either combine all or most of your federal student loans with a direct consolidation loan once you leave school, but that may or may not save you money (more on that in a minute). You could also refinance your student loans with a private lender, but in exchange for potentially lower interest rates, you give up the benefits exclusive to federal student loans, like income-driven repayment plans and student loan forgiveness. Private lenders may or may not offer loan deferment or forbearance (as federal loans do), which allow you to suspend payments if you go back to school, fulfill military service orders or experience financial hardship, among other qualifying circumstances.

You can preserve those benefits with a direct consolidation loan. Your interest rate on that loan will be the weighted average of the interest rates on the combined loans, rounded up to the nearest one-eighth of one percent. The weighted average is what makes this a tricky decision: If your loans with the highest unpaid balance have the lowest interest rate, you may end up with a lower interest rate when everything’s combined. But if your largest balances have the highest rates, you could actually receive a higher interest rate.

If you’re comfortable refinancing with a private lender, keep in mind you’ll need good credit to qualify for the best rates. You can check out our list of the best student loan refinance offers to get a sense of your potential savings.

How to reduce the amount of interest you pay on student loans

Refinancing and consolidating aren’t the only ways you can reduce how much you fork over to the Education Department. Consider committing to one or both of these strategies:

Pay the interest as you go

Unless you have a direct subsidized undergraduate loan, you will be responsible for paying the interest your loan accrues while you are enrolled in school at least half-time, in your grace period (the time between leaving school and entering repayment) or in deferment. When you enter repayment, that interest will be added to your principal loan balance, meaning you will end up paying interest on that interest. By paying the interest as you accrue it, you can avoid this situation, called interest capitalization.

Of course, many students may not have the means to make such payments while in school, but if you can, you may save yourself a lot of money in the long run. This generally only applies to borrowers of direct unsubsidized loans and graduate PLUS loans, as the Education Department pays the interest on subsidized student loans while the borrower is in school, grace period or deferment, and parent PLUS borrowers generally enter repayment once the loan is disbursed.

Pay more than the minimum

Once you enter repayment, your loan servicer will send you a statement saying how much you owe each month. You can pay more than that, and by making extra payments toward your principal balance, you can reduce the amount of interest you pay over the life of the loan. This is a nice alternative to refinancing your student loans to a shorter term, if you’re worried about taking on a higher, required monthly payment.

Make sure you tell your loan servicer that you’re making an additional payment and you’d like it to apply to your principal balance. Otherwise, the servicer may hold onto the money as a future payment. While that means you may not have to pay the next month, you’re also not saving anything by sending over your money early. It’s a good idea to check our account after making such a payment, to ensure the servicer processed it properly.

This story was updated on July 2, 2018, after the Department of Education updated rates on its student aid website. It was originally published May 9, 2018.

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Amex Wins Big With Supreme Court Ruling in Antitrust Case

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American Express scored a big legal victory on this week. In a 5-4 decision, the Supreme Court upheld a lower court ruling in Amex’s favor, allowing it to keep provisions in contracts that prevent merchants from dissuading cardholders from using American Express credit cards by offering them discounts or promotions. This practice by merchants is known as “steering” and it’s often a result of merchants wanting to avoid the higher merchant fees associated with Amex credit cards.

In the case — Ohio v. American Express Co. — the U.S. Department of Justice had argued American Express’ anti-steering provision, which it included in contracts with merchants, hurt competition among card issuers in violation of antitrust laws. The removal of these provisions would have allowed merchants to steer cardholders toward using other credit cards that charged lower merchant fees, like those issued by Visa and Mastercard.

The court ruled there wasn’t sufficient evidence that Amex’s anti-steering provisions hurt competition. On the contrary, the court found that competition increased while the provisions were in place, with credit card transactions increasing 30% from 2008-2013.

“The Court’s decision is a major victory for consumers and for American Express,” company chairman and CEO Stephen J. Squeri said in a statement. “This was a long battle, but well worth the fight because important issues were at stake: consumer choice, fair market competition, and the ability to deliver innovative products and services to our customers, both consumers and merchants.”

Here’s a breakdown of the court’s opinion on the ruling and what it means for American Express:

The court threw its support behind Amex’s higher merchant fees, citing the cost of the company’s rewards program and the value it offers cardholders:

“Amex’s increased merchant fees reflect increases in the value of its services and the cost of its transactions, not an ability to charge above a competitive price. It uses higher merchant fees to offer its cardholders a more robust rewards program, which is necessary to maintain cardholder loyalty and encourage the level of spending that makes it valuable to merchants.”

The states tried to argue that Amex’s higher merchant fees were a result of their anti-steering provisions, but the court found the opposite. While American Express’ merchant fees are high, the fees charged by Visa and Mastercard also continued to rise.

“Visa and MasterCard’s merchant fees have continued to increase, even at merchant locations where Amex is not accepted.”

The states tried to argue that Amex’s 0.09% merchant fee increase from 2005-2010 was not solely used toward cardholder rewards and that resulted in Amex charging anti-competitive prices. But, the court found no evidence to prove the states’ argument.

“The plaintiffs’ evidence that Amex’s merchant-fee increases between 2005 and 2010 were not entirely spent on cardholder rewards does not prove that Amex’s anti-steering provisions gave it the power to charge anti-competitive prices […] Output of credit-card transactions increased during the relevant period, and the plaintiffs did not show that Amex charged more than its competitors.”

The anti-steering provisions were thought to hinder competition among credit card companies and networks, but the court found that the provisions actually promoted competition and the market improved. Competing networks Visa, Mastercard and Discover were also cited as exploiting Amex’s higher merchant fees for their benefit, citing their lower merchant fees and broader merchant acceptance — nearly 3 million more locations — compared with Amex.

“The plaintiffs also failed to prove that Amex’s anti-steering provisions have stifled competition among credit-card companies. To the contrary, while they have been in place, the market experienced expanding output and improved quality. Nor have Amex’s anti-steering provisions ended competition between credit-card networks with respect to merchant fees. Amex’s competitors have exploited its higher merchant fees to their advantage.”

An interesting point the court mentioned was that merchant steering practices harm Amex more than you may expect:

“When merchants steer cardholders away from Amex at the point of sale, it undermines the cardholder’s expectation of “welcome acceptance”—the promise of a frictionless transaction.”

After being steered toward a non-Amex card, the cardholder may be less likely to use an Amex card in the future since merchants may not “welcome” it as much as other cards. This harms Amex since their cards aren’t used as frequently, and this can create a ripple effect, harming cardholders and merchants, the court said. Amex cardholders may lose out on robust rewards and merchants may not receive the typically higher transactions that Amex cards provide.

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10 Places You Can Earn Six Figures and Still Feel Broke in 2018

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A six-figure income may not go as far as you think depending on where you live. After factoring in taxes, debt payment and living expenses like child care and transportation, a family earning $100,000 in certain cities could still find themselves struggling to get by. Last year, MagnifyMoney published “The Best and Worst Cities to Live on Six Figures.” This year, we’re back for the 2018 edition to uncover the metro areas where a household income of $100,000 can still leave you strapped for cash.

For this study, we created a hypothetical, but fairly typical, couple with one child who earns a combined gross income of $100,000 (or $8,333 monthly). We estimated monthly expenses, debt payments and tax obligations to calculate what the family’s disposable income would be in various metro areas based on the average lifestyle of a six-figure earner in the corresponding metro area. Then, we ranked the locations from places where they would have the most and least disposable income.

The order in this year’s ranking has changed from last year due to changes in living costs like housing, transportation and child care. But you’ll notice many usual suspects on the worst list and some familiar faces on the best list.

Places Where You Can Earn 6 Figures and Still Be Broke

How the study — and our findings — evolved in 2018

There are a few changes to the methodology in our 2018 study. We focused on the largest 100 metros this time around as opposed to some 381 metros last year. We also took a more detailed approach to calculating variables that impact a family’s disposable income. Here are the updates we made:

We based our case study on a family earning a gross income of $8,333 per month. Then we subtracted their monthly expenses, debt obligations and savings to come up with an estimate of how much cash they’d have left over at the end of the month.

Savings. We assumed the family contributed $500 monthly to their 401(k). Last year, we assumed the family set aside 5% of their savings in a regular savings account. This year, we changed the savings to 401(k) contributions because it’s something of a bastion of corporate middle-class personal finance, and it offers a tax benefit.

Tax assumptions. Our study assumes the couple will file jointly for 2018. They took the standard federal deduction and received a federal $2,000 credit for their one child. They also took the standard deductions and credits offered by their state, and took advantage of the pretax DCFSA child savings plan to deduct the $5,000 maximum from their taxable income by their employer. The couple had insurance premiums paid from their pretax income by their employer and their 401(k) contributions paid from their pretax income by their employer.

Debt: We assume the family had a monthly student loan payment of $222, which is the median student loan payment according to the Federal Reserve. Housing and auto debt are bundled in with the housing and transportation cost budget line items in monthly expenses.

Monthly expenses. We based monthly expenses — housing, transportation, food, utilities, household operations, child care and entertainment — for each location on data taken from the Bureau of Labor Statistics, the Department of Housing and Urban Development, Care.com, Kaiser Family Foundation and the Federal Reserve. We calculated an average for these expenses taking into account the lifestyle costs of a six-figure earner.

Compared with last year, we beefed up the monthly necessity expenses — although by no means hit them all — by adding costs like household operations costs and utilities to get a more realistic sense of how much people would have left over after paying their basic bills. We also added health insurance since it’s one of the most basic expenses.

Read the full methodology here.

Key takeaways:

  • In San Jose, Calif. (the seat of Silicon Valley), a joint income of $100,000 with a preschool-aged child means a couple would have to run up their credit cards $454 a month just to make monthly bills on the basics (not including compounded interest on that credit card debt)
  • In McAllen, Texas, a couple earning $100,000 can expect to have around $2,267 left over every month after paying bills.
  • In fact, the five places where couples can expect the most in disposable income are in Texas and Tennessee, where there’s no state income tax, and metros in Florida (also without state income tax) tend to have six-figure earners with plenty of money left over.
  • Regionally, with the exception of Minneapolis — a perennial on our list of most prosperous places — the most expensive cities lie on the coasts and Hawaii, and the most affordable cities are in Southern states without a state income tax.

Worst Places to Make Six Figures

1. San Jose/Sunnyvale/Santa Clara, Calif.

San Jose, Calif., moves up to the top spot replacing Washington D.C. from last year’s study. San Jose is the location where a combined income of $100,000 is going to offer the least amount of security for our hypothetical family of three.

To make ends meet, they would need to either dip into savings or rely on credit cards to cover the $454 budget deficit. Housing in this area decreased compared with last year ($2,916 in 2017 versus $2,520 in 2018). However, an 84% increase on child care costs and 30% increase on transportation costs takes the location to the no. 1 spot. This year, we used a different source for child care costs, which could also contribute to the increase in cost.

  • Monthly income minus taxes and FICA — $7,087
  • Monthly paycheck minus taxes, FICA, 401(k), health insurance, DCFSA child savings — $5,768

2. Washington/Arlington/Alexandria, DC-VA-MD

Washington D.C. comes in at a close second leaving the family $360 in the hole each month. Housing costs increased to $2,597 compared with $2,274 in 2017. This is the most expensive metro area to find living arrangements. The general rule of thumb is to not spend more than 30% of your gross income on housing, but this recommendation could leave you house poor since it doesn’t consider your net income.

In this case, housing takes up about 31% of the couple’s gross income ($8,333 per month). However, housing takes up 47% of the family’s actual paycheck after subtracting taxes, FICA, 401(k), health insurance and the pre-tax child care saving incentive. Couple the housing costs with the transportation expense ($1,302), and a six-figure earning family can really struggle to live comfortably in and around the nation’s capital.

  • Monthly income minus taxes and FICA — $6,932
  • Monthly paycheck minus taxes, FICA, 401(k), health insurance, DCFSA child savings — $5,560

3. San Francisco/Oakland/Hayward, CA

San Francisco is about 50 miles away from San Jose (no. 1 on the list), but offers slightly lower living costs, which makes the $100,000 income go a bit further. The two cities share almost the exact same monthly expenses. It’s the $320 total saved on housing and transportation that makes San Francisco slightly more affordable than the San Jose metro area. San Francisco made it to no. 4 last year, so it’s no surprise we’re seeing it again this year taking one of the top spots.

  • Monthly income minus taxes and FICA — $7,086
  • Monthly paycheck minus taxes, FICA 401(k), health insurance, DCFSA child savings — $5,768

4. Bridgeport/Stamford/Norwalk, Conn.

The Bridgeport, Conn., area offers some opportunity for savings in food and child care costs, but estimated utilities and transportation costs come in higher than even the top three worst places for six-figure earners. Our hypothetical family would spend almost 29%* of their paycheck on transportation and utilities alone.

  • Monthly income minus taxes and FICA — $7,035
  • Monthly paycheck minus taxes, FICA 401(k), health insurance, DCFSA child savings — $5,678

5. Boston/Cambridge/Newton, MA-NH

Boston has the third highest cost of child care to make the list. Child care could take up a whopping 15%* of a family’s paycheck after subtracting taxes and savings contributions. Just like last year, housing is another budget buster in the Boston area eating away another 37% of their paycheck.

  • Monthly income minus taxes and FICA — $6,932
  • Monthly paycheck minus taxes, FICA 401(k), health insurance, DCFSA child savings — $5,595

6. Oxnard/Thousand Oaks/Ventura, Calif.

Oxnard, Calif., is a new addition to the list this year, and the first metro area that doesn’t leave a $100,000 earning household in the red each month after taxes, investment contributions and expenses.

With that said, disposable income of just $138 isn’t much to write home about. An unexpected expense could easily wipe out their spare cash. Like the other California locales above, housing takes a huge bite out of their budget — almost 38% of net income.

  • Monthly income minus taxes and FICA — $7,086
  • Monthly paycheck minus taxes, FICA 401(k), health insurance, DCFSA child savings— $5,768

7. Urban Honolulu, Hawaii

Honolulu gives the family more disposable income than Oxnard, Calif., but just barely. When all expenses are covered, the family has $140 left over to spare, which is less than last year’s disposable income of $302. Year over year, child care and transportation costs increased by 30% and 23% respectively, but housing decreased by almost 18%.

  • Monthly income minus taxes and FICA — $6,805
  • Monthly paycheck minus taxes, FICA 401(k), health insurance, DCFSA child savings — $5,527

8. Minneapolis/St. Paul/Bloomington, MN-WI**

State income tax is one of several reasons the Minneapolis area makes the list. The estimated state tax here ($506) is higher than the top two worst places — San Jose ($206 state tax) and Washington, D.C. ($366 state tax). Housing takes up about 37% of the family’s paycheck, which isn’t ideal but less than other locations.

  • Monthly income minus taxes and FICA — $6,785
  • Monthly paycheck minus taxes, FICA, 401(k), health insurance, DCFSA child savings — $5,470**

9. Hartford/West Hartford/East Hartford, Conn.

Hartford, Conn., is another new addition to the list. Hartford offers $339 in disposable income which is more than double that of Honolulu. Housing in Hartford is the second lowest of this list taking up just 33% of the family’s paycheck.

  • Monthly income minus taxes and FICA — $7,035
  • Monthly paycheck minus taxes, FICA 401(k), health insurance, DCFSA child savings — $5,678

10. New York/Newark/Jersey City/NY-NJ-PA

The New York metro area came in no. 5 last year, but takes spot no. 10 for 2018. It may come as a shock that it’s not closer to the top, but major savings in transportation contributes to a disposable income of $505 after bills and other responsibilities.

For a comparison, the other “worst places to live” have monthly transportation costs ranging from $1,200 to $1,400. The estimate for transportation costs in the New York area is just $997 per month.

  • Monthly income minus taxes and FICA — $6,934
  • Monthly paycheck minus taxes, FICA 401(k), health insurance, DCFSA child savings — $5,629

Best Places to Make Six Figures

100. McAllen/Edinburg/Mission, Texas

It’s no surprise that states without state income tax make the top of the list for best places to make six-figures. McAllen also has a remarkably low monthly housing cost ($889). Last year, housing costs for McAllen were sitting at $1,086 contributing to its no. 5 ranking on the best list.

Here, the family has a nice $2,267 per month in disposable income. This surplus in cash can offer plenty of flexibility to save, invest or tackle lingering debt. Overall, household bills take up just 62%* of the paycheck in McAllen. In comparison, for San Jose, the worst metro area for six-figure earners, bills take up 108%* of the paycheck.

  • Monthly income minus taxes and FICA — $7,300
  • Monthly paycheck minus taxes, FICA 401(k), health insurance, childcare savings — $5,913

99. El Paso, Texas

El Paso, Texas, has a slightly higher housing cost than McAllen ($1,060 versus McAllen’s $889). In El Paso, the hypothetical family gets a disposable income of $2,135, again, enough to comfortably stash some cash away for a rainy day while keeping current on bills.

  • Monthly income minus taxes and FICA — $7,301
  • Monthly paycheck minus taxes, FICA 401(k), health insurance, DCFSA child savings — $5,913

98. Chattanooga, TN-GA

Chattanooga, Tenn., offers low child care and health insurance, but comes in third with a disposable income of $2,048 thanks to the higher housing cost ($1,116) and transportation cost ($1,186) . These two major living expenses are higher than McAllen and El Paso, but when combined still only take up 39% of net income.

  • Monthly income minus taxes and FICA — $7,290
  • Monthly paycheck minus taxes, FICA 401(k), health insurance, DCFSA child savings — $5,894

97. Memphis, TN-MS-AR

Memphis has higher housing costs than the locations above but more affordable child care. Child care ($622 per month) is lower than even the two best metro areas — McAllen and El Paso (both $686 per month). The family gets a disposable income of $1,970, which is a respectable sum.

  • Monthly income minus taxes and FICA — $7,290
  • Monthly paycheck minus taxes, FICA 401(k), health insurance, DCFSA child savings — $5,984

96. Knoxville, Tenn.

Knoxville, Tenn., is yet another southern metro area in a state with no income tax. Housing and child care costs put Knoxville behind Chattanooga and Memphis. But together, housing and child care costs, two big ticket budget line items, only eat up about 31% of the household’s paycheck.

  • Monthly income minus taxes and FICA — $7,290
  • Monthly paycheck minus taxes, FICA 401(k), health insurance, DCFSA child savings — $5,984

95. Lakeland-Winter Haven, Fla.

The monthly disposable income at Lakeland-Winter Haven, Fla., clocks in at $1,850. The health care costs ($525) are considerably higher here when compared with other cities even the most expensive places for six-figure earners. San Jose, Calif., and Washington, D.C., have health care costs of $402 and $456, respectively.

  • Monthly income minus taxes and FICA — $7,306
  • Monthly paycheck minus taxes, FICA 401(k), health insurance, DCFSA child savings — $5,866

94. Jackson, Miss.

Jackson, Miss., is the first locale on the best places to live list that has a state income tax. Jackson offers a disposable income that’s just two dollars shy of Lakeland-Winter Haven, Fla. at $1,848. Despite the state tax, housing ($1,082 per month) and child care ($514 per month), it’s still an affordable place to call home for six-figure earners.

  • Monthly income minus taxes and FICA — $6,993
  • Monthly paycheck minus taxes, FICA 401(k), health insurance, DCFSA child savings — $5,627

93. Youngstown/Warren/Boardman, OH-PA

Youngstown, Pa., is the only location representing the Northeastern states in this list. Child care is high ($694) compared with other states that have affordable living. But housing and transportation costs are comparable with other locales, and health care is noticeably lower at $331 per month.

  • Monthly income minus taxes and FICA — $7,069
  • Monthly paycheck minus taxes, FICA 401(k), health insurance, DCFSA child savings — $5,823

92. Deltona/Daytona Beach/Ormond Beach, Fla.

Daytona Beach, Fla., is in a no-income tax state but has high housing, transportation and food costs, which takes it down a few pegs even below two states that have state taxes. Bills take up 70%* of net income.

  • Monthly income minus taxes and FICA — $7,306
  • Monthly paycheck minus taxes, FICA 401(k), health insurance, DCFSA child savings — $5,866

91. Toledo, Ohio

Toledo, Ohio, rounds out the top ten best places for six-figure income households. Like, Youngstown, Pa., Toledo has high child care costs ($694 per month) when compared with the other affordable locations. Food and entertainment costs can also put some pressure on the purse strings. But overall, the household will pay just 70%* of their paycheck on household expenses.

  • Monthly income minus taxes and FICA — $7,069
  • Monthly paycheck minus taxes, FICA 401(k), health insurance, DCFSA child savings — $5,823

*These numbers have been corrected due to an editing error.

**Due to a data collection error, the health insurance costs for Minneapolis were incorrectly calculated. We have updated the ranking for Minneapolis from #5 to #8. 

Additional Findings:

  • Residents of the New York metro (10th on the list) get a bit of a reprieve, thanks to low cost public transportation. They’ll have $505 left over every month for things like clothes, toys, and co-pays for their kid.
  • Other states with no income tax include Nevada, Vermont and Washington, but expenses there are high enough to eat up most of the savings (Seattle is the 13th brokest metro).

Background & methodology:

The hypothetical family we created is a typical one that earns a combined income of $100,000 (the median income for a married-couple family in 2016 was $81,917, and 39% of such couples earned at least $100,000 that same year).

We were pretty conservative about the couple’s financial and debt obligations by making the following assumptions:

  • Both have corporate-style employers who offer typical benefits.
  • They have one child currently in day care.
  • Between them, they contribute 6% of their income to their 401(k)’s, which is considerably less than the median rate of 5% from an employee in a matching plan (page 40; assumes the employee is contributing half of the 10% median).
  • Only one of them has student loans and is making the median payment of $222 a month.
  • The entire household is on one person’s group insurance plan.
  • The family has average spending habits and expenses for where they live.

To calculate federal and state taxes, we assumed the following:

  • The couple will file jointly for 2018;
  • Took the standard federal deduction;
  • Received a federal $2,000 credit for their one child
  • Took the standard deductions and credits offered by their state;
  • Took advantage of the pre-tax DCFSA child savings plan to deduct the $5,000 maximum from their taxable income by their employer;
  • Had insurance premiums paid from their pre-tax income by their employer;
  • Had their 401(k) contributions paid from their pre-tax income by their employer.

The following variables were used to create their hypothetical expenses (each is the average cost for the geography indicated in parentheses):

  • Federal tax contribution (national, but adjusted for state average health care premiums)
  • State tax contribution (state)
  • FICA contribution (national)
  • 401(k) contribution (national; see notes on assumptions)
  • Insurance premiums (state)
  • Housing costs (MSA)
  • Transportation costs (MSA)
  • Food costs (regional)
  • Utilities cost (regional)
  • Household operations costs (regional)
  • Child care costs (MSAs where available (half of the MSAs), and state averages where not)
  • Student loan payments (national)
  • Entertainment costs (regional)

Sources include the Bureau of Labor Statistics; the Department of Housing and Urban Development; the Tax Foundation; Care.com; the Kaiser Family Foundation; the U.S. Federal Reserve; and the U.S. Census Bureau.

Full ranking:

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

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Taylor Gordon is a writer at MagnifyMoney. You can email Taylor here

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How Fed Rate Hikes Change Borrowing and Savings Rates

Editorial Note: The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

Since late 2015, the Federal Reserve has raised the upper limit of its target federal funds rate by 1.50 percentage points, from 0.25% to 1.75%, and is on track to raise it another 0.25 points this month.

Fed rate changes have wide ranging implications for consumers and MagnifyMoney analyzed Federal Reserve rate data to illustrate how the rates consumers pay for loans and earn on deposits have changed since the Fed started raising rates two and a half years ago.

  • According to our analysis, credit card rates are most sensitive to changes in the federal funds rate, almost directly matching the rate change with a 1.41 point increase since December, 2015. Credit card rates will continue to rise in line with the Fed’s rate increases, and if the Fed raises rates again the average household that carries credit card debt month to month will pay over $150 in extra interest per year compared to before the rate hikes began. MagnifyMoney estimates 122 million Americans carry credit card debt month to month.
  • Student loan and auto loan rates have also risen sharply, but only half as much as credit card rates, in part because they are longer term forms of lending that are less reliant on the short-term federal funds rate. Federal student loan rates are set based on the 10-year Treasury note rate each May.
  • Savers at big banks have seen little change, with the average savings and CD account passing through only a fraction of the rate increase, but that masks a big opportunity for savers who shop around and move deposits to online banks. Online banks have aggressively raised rates, and now offer rates in the 2% range, versus just 1% in 2015. That’s over 20 times what typical accounts pay.

Credit cards

Most credit cards have a rate that’s directly based on the prime rate, for example the prime rate plus 9.99%. As a result, card rates tend to move almost immediately in line with Fed rate changes. In the current cycle, the rates on all credit card accounts tracked by the Federal Reserve have increased 1.41 points, in line with the Fed’s increase of 1.50 points.

That said, consumers can still find attractive introductory rate offers.

For example 0% balance transfer offers have continued to remain long even as the Fed has hiked rates, with offers still available for nearly 2 years at 0%.

Credit card issuers make up for the rate hike by the automatic rise in variable backend rates, as well the increasing spread between the prime rate and what consumers pay on new accounts. They can also increase other fees, like late payment fees or balance transfer fees to keep long 0% deals viable.

The Federal Reserve tends to hike up interest rates gradually over time. And people in credit card debt will barely notice the rate increase in their monthly statement. When rates are increased by 0.25%, the monthly minimum due on a credit card will increase $2 for every $10,000 of debt.

The danger of such a small increase in the monthly payment is complacency. Remember that by paying the minimum due, you could be in debt for more than 20 years.

Rates are expected to keep rising, so it make sense for consumers to lock in a low rate today. The best ways to lock in lower rates are by leveraging long 0% balance transfer deals or by consolidating into fixed rate personal loans.

Savings accounts

On average, savings account rates haven’t changed much since the Fed started raising rates. That’s largely because big banks with the biggest deposits and large branch networks have less incentive to offer higher rates, and this skews national data on rates earned because most savers don’t shop around to find higher rates at online banks and credit unions.

Consumers who shop around can find much higher savings account rates than three years ago, and shopping around for a better rate on your deposits is one of the best ways to make the Fed’s rate hikes work in your favor.

Back in 2015, it was rare to see savings accounts pay 1% interest.

Today, many online banks are competing for deposits by offering savings account rates approaching 2%, flowing through about half of the Fed’s rate hike into increased rates for depositors. These rates will continue to rise as the Fed hikes rates.

CDs

CD rates have moved faster than savings rates, up 0.11 points for 12-month CDs since the Fed started raising rates. That’s in part because they are a more competitive product that forces consumers to rate shop when they expire at the end of their 6-month, 12-month or longer term.

But that rate rise doesn’t fully reflect what some smaller banks are passing through, as the banks with the largest deposits have been slow to raise rates.

The rates on 1 and 2 year CDs at online banks have been increasing rapidly, and are now well over 2%, reflecting much of the Fed’s rate increases since 2015.

The rates on 5-year CDs have not been increasing as quickly. As a result, the rate curve has been flattening.

A reasonable strategy would be to invest in short-term (1 and 2 year) CDs. If competition at the short end continues, you can get the benefit in a year on renewal.

And if long-term rates start to rise, you can redeploy or build a ladder in a year.

Student loans

Federal student loan rates are set based on a May auction of 10-year Treasury notes, plus a defined add-on to the rate. As of July 1st, rates for new undergraduate Stafford loans are expected to increase to 5.04%, up from 4.29% before the federal funds target rate began to rise.

Since student loan rates are determined by the 10-year Treasury rate, rather than a short-term rate, they are less directly related to changes in the federal funds rate than some shorter term forms of borrowing like credit cards. Instead, future market views of inflation and economic growth play a role. Federal student loan rates are capped at 8.25% for undergraduates and 9.5% for graduate students.

For private refinancing options, rates depend on secondary markets that tend to follow longer term rates, rather than the current federal funds rate, but in general, a rising rate environment could mean less attractive refinancing options.

Personal loans

Personal loan rates tend to be driven by many factors, including an individual lender’s view of the lifetime value of a customer, funding availability, and credit appetite. Most personal loans offer fixed rates, and in a rising rate environment overall, we expect these rates will go up, making new loans more expensive, so consumers on the fence should consider shopping for a good rate sooner rather than later. Since the end of 2015, rates on 2-year personal loans tracked by the Federal Reserve have increased by 0.56 points.

Auto loans

Prime consumers who shop around for an auto loan can still find very low rates, especially when manufacturers are offering special financing deals to move certain car models.

But the overall rates across the credit spectrum have gone up since the Fed raised rates, in part due to the rate hikes, and in part due to recent greater than expected delinquencies in some parts of the auto lending market.

Mortgages

Since the Fed started raising rates in late 2015, 30-year fixed-rate mortgages have increased from approximately 3.9% to 4.5%, or about half the increase of the Fed funds rate.

The mortgage market tends to follow trends in longer term bond markets, like the 10-year Treasury, since mortgages are a longer term form of borrowing. That shields them from some of the impact of Fed rate increases, and it’s not unusual for mortgage rates to decline during some periods when the Fed is raising rates.

What can consumers do

Rates are only going to go up. That means life is going to get more expensive for debtors, and more rewarding for savers.

If you are in debt, now is the time to lock in the lowest rate possible. There are still plenty of options at this point in the credit cycle for people to lock in lower interest rates.

If you are a saver, ignore your traditional bank and look online. Take advantage of online savings accounts and CDs to earn 20 times the rate of typical big bank rates.

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

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The Best Places to Spend Your Golden Years (and Age in Place)

Editorial Note: The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

Retirement doesn’t have to mean moving away from a city you love or giving up the cultural opportunities bigger metros provide that can make your retirement years golden. Aging in place is a growing phenomenon, as many seniors plan to stay in their own homes and remain active members of their communities rather than move elsewhere. But other retirees may still feel the urge for new scenery and a new zip code, whether to lower their cost of living as they adjust to life on a fixed income, or to find a new home that better fits their lifestyle or health care needs.

At MagnifyMoney, we decided to look at which of the 50 largest metros offer the best opportunities for senior citizens in terms of lifestyle, cost of living, medical care and — when the time comes — both in-home and residential assisted care.

Key takeaways

  • Portland, Ore., Salt Lake City and Denver top the list of best places to spend your golden years.
  • Retirement life isn’t so golden in New York, Houston and Miami, which earned spots in the bottom three of our list.
  • Surprisingly, metros in the iconic retiree destination Florida didn’t do well on our list, with Jacksonville ranking 32 out of 50, Orlando ranking 40, and Miami ranking 48.
  • Midwestern metros did well, however, thanks to a relatively low cost of living.

Aging in place

Aging in place simply means living in one’s own home (possibly in a continuing care retirement community) independently for as long as possible. In a 2017 AARP survey, senior citizens consistently expressed a preference for living “in their homes and community-at-large”.

As the monumental baby-boomer generation tips into old age, communities, policy makers and other institutions have started to focus their attention on creating environments to increase the likelihood of successfully aging in place.

One big bright spot is the availability of technology to assist people with certain vital tasks, such as taking medicines, keeping track of lists and contacting medical providers for nonemergency consultations.

Seniors can access transportation from anywhere with apps like Uber and Lyft, shop for groceries from their computers and use smart speakers if the keypads on their phones become challenging, access smart-home features (like changing the thermostat) or even call for help in an emergency.  Wearable health monitors including fall alerts, mean that family and medical professionals can be immediately alerted if any concerns arise.

With that in mind, we were especially mindful of local metrics that would help people age in place, such as lower costs of living, community engagement and the availability and quality of assisted care.

How we ranked metros

We used four major categories to make our determinations of which of the biggest 50 US metros were the best places to spend one’s golden years.

Lifestyle:

  • Volunteer rates for those ages 55 and older to get a sense of where senior citizens had the opportunities to be most engaged with the community-at-large
  • Rate of physical activity in each metro to get a sense of which communities offer the most opportunities for activity
  • Percentage of residents ages 65 and over who moved into the metro that year so we could see how desirable seniors find these metros

Cost of living:

  • Median monthly housing costs because whether renting or owning, retirees are on fixed incomes and the ability to afford housing is crucial to aging in place
  • Regional prices for goods and services because the salary bumps of living in more expensive places no longer apply to those who are no longer working

Medical quality and cost:

  • The percentage of hospital discharges of Medicare enrollees that were for conditions considered preventable with adequate primary care
  • The average cost that Medicare pays per enrollee in a given metro
  • The percentage of people aged 65 or older who are up-to-date on their core preventive services, such as flu shots and cancer screenings

The availability and quality of different kinds of assisted care:

  • We looked at the number of home nursing service providers registered with Medicare per 100,000 residents because the availability of home nursing may be essential to those who age in place
  • The average Medicare rating of registered home nursing service providers
  • The number of nursing home beds registered with Medicare per 100,000 residents because sometimes people do require temporary or permanent intensive residential care and sometimes on very short notice
  • The number of continuing care retirement communities registered with Medicare per 100,000 residents because these communities (a subset of nursing homes) offer a bridge between independent living in private apartments (with some community and medical amenities such as dining rooms, group activities, physical therapy) and more intensive nursing care in the same facility
  • The average Medicare rating of registered nursing homes

The top places to spend your golden years

1 – Portland, Ore.

Final score: 62.6
About 6% of Portland’s population ages 65 and older moved there from somewhere else in 2016, the highest rate of any metro on our list, which implies that retirees who have ability to move find Portland highly desirable. The metro boasts an 82.6% activity rate, and while housings costs are higher than average at $1,236 per month, costs for goods and services are a smidgen below the nation’s average. Seattle was the only metro on our list to get a medical quality and cost score higher than Portland’s score of 79.8. Portland falls short in the availability of assisted care services, however, with fewer than one home nursing provider per 100,000 residents, and they’re not rated particularly well by Medicare. A lack of nursing homes and continuing care retirement communities leaves Portland with an assisted care quality and availability score of 21.1; the average among metros we reviewed was 38.4.

2 – Salt Lake City

Final score: 61.3
Salt Lake City seems to have the most engaged senior community, with 40.3% of people over the age of 55 volunteering, far in excess of the 24.7% average among the 50 metros we reviewed. Residents in the metro are also a bit more active than many other places, and at 27.6%, the metro has the lowest rate of preventable hospital stays. That may explain why, at $8,914, the average healthcare cost per Medicare patient is lower than the $9,627 average for the 50 metros. The metro could use a boost in their assisted care and quality availability, earning a score of 35.4, which is lower than the average of all metros we reviewed. Interestingly, Salt Lake City does not appear to be a draw for seniors, as only 1.5% of them moved there from elsewhere.

3 – Denver

Final score: 61.1
Residents in only two other metros (San Francisco and San Diego) get more physical activity than in Denver, where 83.3% do, and that combined with the fourth highest percentage of seniors who moved into the metro from elsewhere brings Denver’s lifestyle score to 75.5 – drastically higher than 50 metro average of 43.8. At just 29%, the Mile High City has the third lowest rate of hospitalizations of Medicare recipients are for preventable causes, and the medical quality and cost score is 75.9, compared with the average of 48.3 across all 50 metros. On the downside, median housing is quite expensive at $1,285 per month, higher than the national average, and the metro could use some additional assisted care options.

The worst places to spend your golden years

50 – New York

Final score: 30.8
Those who always dreamed of moving to New York City sometime in the future may be disappointed to know that senior citizens don’t fare very well there. Community engagement is low, with only 16.2% of seniors volunteering, although locals do get a respectable amount of physical activity. The big issue for the Big Apple is the high cost of living: The metro has the highest costs for good and services, and median monthly housing costs for the metro are $1,528. Health care also isn’t as good as it could be, with the metro earning a score of 34.0, compared with the 50 metro average of 48.3. The upside is that assisted care availability score just bumps over the metro average at 39.0.

49 – Houston

Final score: 33.7
Houston needs to improve in several areas, but where it does worst is in the availability of assisted care. The metro has fewer than one home nursing service provider for every 100,000 residents, and fewer than 295 beds per 100,000 residents (compared with the 50 metro average of 463.3). What’s more, the average Medicare ratings for nursing homes is the lowest of any metro we reviewed, at 2.3. All of these things combined to give the metro the lowest assisted care availability and quality score by a considerable margin (19.3). The metro also performed very poorly for medical care quality and cost, earning a score of 24.5, compared with the 50 metro average of 48.3.

48 – Miami

Final score 39.1
Surprisingly for a place we often think of as a mecca for retirees, Miami isn’t the ideal destination we saw in “The Golden Girls” TV series. Senior volunteer rates of just 12.1% are the lowest of any metro we reviewed, the average cost per Medicare enrollee is the highest ($11,582) and it has the fourth lowest rate of seniors being up-to-date on preventative care (26.3%). Miami runs on the low end of the middle of the pack for cost of living, but it does much better in assisted care availability and quality, earning a score of 46.9, compared with the 50 metro average of 38.4.

Metros often perform well in some areas and poorly in others

It stands to reason that with so many elements to consider, no metro can beat the others in every single area, and some metros that rise to the top in one area we measured sink to the bottom in others.

  • Cleveland has the lowest rate of seniors who are up-to-date on their core preventative services, but it has the most continuing care retirement communities per capita of any of the metros we reviewed.
  • Conversely, Raleigh, N.C., has the highest rate of seniors who are up-to-date on preventative care, but the fourth fewest continuing care retirement communities.
  • Washington, D.C., has the fourth highest senior volunteer rate, but also has the third highest housing costs.
  • Buffalo, N.Y., has the second cheapest housing, but also has the second worst rate of seniors up-to-date on core preventative services.

It’s important for individuals and couples to decide which elements are most important for their later years and make their choices accordingly.

It’s also essential for communities to make improvements in their weakest areas as the number of retirees continues to skyrocket.

Here’s How All 50 Metros Compare With Each Other

Methodology:

Data was grouped into four categories:

Lifestyle

  • Percent of people aged 55 and over who volunteered (Corporation for National & Community Service “Volunteering and Civic Life in America” database, available here.)
  • Percentage of people who reported getting physical activity (The Robert Wood Foundation and University of Wisconsin Population Health Institute “2018 County Health Rankings” database, available here.)
  • Percentage of the population, aged 65 and older, who moved into the metro in 2016 (U.S. Census Bureau “Geographic Mobility by Selected Characteristics in the United States” 2016 American Community Survey 5-Year Estimates, available here.)

Cost of living

  • Median Monthly Housing Costs (U.S. Census Bureau “Median Monthly Housing Costs (Dollars)” 2016 American Community Survey 5-Year Estimates, available here.)
  • Regional Price Parities, excluding housing costs (U.S. Bureau of Economic Analysis Real Personal Income and Regional Price Parities for 2016, available here.)

Medical quality and cost

  • Percentage of hospital admissions of Medicare enrollees that are for preventable conditions (The Robert Wood Foundation and University of Wisconsin Population Health Institute “2018 County Health Rankings” database, available here.)
  • Health care costs per Medicare enrollee (The Robert Wood Foundation and University of Wisconsin Population Health Institute “2018 County Health Rankings” database, available here.)
  • Percentage of the population, aged 65 and older, who are up-to-date on core preventative services (Centers for Disease Control and Prevention “500 Cities: Local Data for Better Health, 2017 release,” available here.)

Assisted care availability and quality

  • Number of home nursing service providers per 100,000 residents (Medicare “Home Health Care Agencies” database, available here.)
  • Average rating of home nursing service providers (Medicare “Home Health Care Agencies” database, available here.)
  • Nursing home beds per 100,000 residents (Medicare, “Nursing Home Compare” dataset, available here.)
  • Continuing care retirement communities per 100,000 residents (Medicare, “Nursing Home Compare” dataset, available here.)
  • Average nursing home ratings (Medicare, “Nursing Home Compare” dataset, available here.)

The data was aggregated to the metropolitan statistical area level (“MSA”) and limited to the 50 largest MSAs by population.  Where necessary, statistics were derived using the 2016 population data from the “Comparative Demographic Estimates” table for 2016 from the US Census Bureau’s American Community Survey 5-year estimates (available here.)

Each category was scored individually by created a relative value for each component, summing them together, and then dividing by the number of components, for a highest possible score of 100 and a lowest possible score of zero.  The sum of these four categorical scores were then divided by four to create the final score, with a highest possible score of 100 and a lowest of zero.

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Kali McFadden
Kali McFadden |

Kali McFadden is a writer at MagnifyMoney. You can email Kali at kali.mcfadden@magnifymoney.com

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It Will Soon Be Free to Freeze Your Credit Report

Editorial Note: The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

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Eight months after it happened, Congress tangibly responded to the major data breach at Equifax that exposed the sensitive information of more than 146 million consumers. On May 24, President Donald Trump signed into law a bipartisan bill that makes freezing a credit report free for everyone in the U.S. and simultaneously fulfilled his early-term promise to “do a big number” on Dodd-Frank.

The provision for free credit freezes was included in the larger Economic Growth, Regulatory Relief, and Consumer Protection Act, which effectively rolls back major parts of the Obama-era Dodd-Frank Act.

What’s changing?

The new law affects a wide variety of consumer finance issues, but as far as credit freezes go, it makes placing, lifting and permanently removing a freeze on your credit report free, no matter where you live.

Before the law, each state had its own laws regulating the prices consumers pay to the big three reporting agencies — Experian, Equifax and TransUnion — to freeze and unfreeze credit reports. Previously, only three states (Indiana, Maine and South Carolina) allowed any resident to freeze or unfreeze their credit reports for free.

In addition, the new law requires credit reporting agencies to fulfill a request to freeze, thaw or permanently lift a freeze within one business day if the request is placed online or over the phone, and three business days if the request was made via snail mail. These new provisions will go into effect four months after they became law.

What’s a credit freeze again?

A credit freeze is a consumer protection tool that restricts access to your credit report. It can be used to prevent fraudsters from using your information to commit financial identity fraud.

Placing a freeze on your credit report prevents creditors from seeing your file when you or someone else applies for new credit, so no one will be able to open a new credit account in your name without your knowledge. If you want to apply for credit, you’ll need to lift, or thaw, the freeze.

A credit freeze doesn’t completely prevent identity theft, as it only pertains to transactions that involve credit report requests. The freeze doesn’t impact your credit score, restrict your existing creditors’ access to your credit report or stop you from receiving prescreened credit offers (lenders generally pre-qualify new consumers using a soft pull).

How to freeze your credit report:

You can freeze your credit report online, or by phone or mail with all three major credit reporting bureaus. You must go through a separate process with each credit bureau. We explain the steps in detail here, but here are the basics:

Each credit bureau allows you to request a credit freeze online, by phone or by mail.

Online

Equifax

Experian

TransUnion

Phone

Equifax: 1-800-685-1111 (1-800-349-9960 for New York residents)

Experian: 1-888-EXPERIAN (1-888-397-3742). Press 2.

TransUnion: 1-888-909-8872

Mail

Send a letter to each credit bureau by certified mail requesting the freeze. Here are the addresses.

Equifax: Equifax Security Freeze/P.O. Box 105788/Atlanta, GA 30348

Experian: Experian Security Freeze/P.O. Box 9554/Allen, TX 75013

TransUnion: TransUnion LLC/P.O. Box 2000/Chester, PA 19016

There are mobile options, too.

TransUnion offers a free TrueIdentity mobile app for those enrolled in its free True Identity service that provides the ability to lock and unlock credit reports instantly. And, in the aftermath of the data breach, Equifax released its free Lock & Alert app, which allows consumers to freeze and thaw their credit reports with a swipe. Experian has a free credit freeze app, IdentityWorks, to lock and unlock your credit report, but only for people with memberships to Experian IdentityWorks Premium or Experian CreditWorks? Premium, which charge fees.

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

Brittney Laryea
Brittney Laryea |

Brittney Laryea is a writer at MagnifyMoney. You can email Brittney at brittney@magnifymoney.com

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