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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.

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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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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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.

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7 Foods That Are Getting More Expensive in 2018

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The new year can bring a tightening of budgets after the holidays, so the last thing many consumers want to hear is that food staples may cost more.

But retail food prices are forecasted in 2018 to rise between 1 percent to 2 percent, according to the U.S. Department of Agriculture.

Be prepared to see a possible difference on your grocery receipts and restaurant bills for these items:

  • Eggs: Expected to increase 4 percent to 5 percent in 2018, following a drop in 2017 and 2016.
  • Cereal and bakery products: Expected to increase 3 percent to 4 percent.
  • Fresh fruit: Expected to increase 3 percent to 4 percent.
  • Dairy products: Expected to increase 1.5 percent to 2.5 percent.
  • Beef and veal: Expected to increase 1.5 to 2.5 percent in 2018, following a drop in 2017.
  • Pork: Expected to increase 0.75 percent to 1.75 percent.
  • Poultry: Expected to increase 0.25 percent to 1.25 percent, potentially impacting popular bar fare like chicken wings.

The price increases can be particularly alarming considering an average family spends approximately 6.6 percent of their household income on food and 43 percent of those expenditures on food away from the home, according to the U.S. Department of Agriculture. Rising food prices can affect families from all demographics but especially those in low-income situations.

Why food prices rise

There are many reasons behind price changes that may not seem obvious.

“The biggest drivers of rapid increases in prices tends to be weather-related events,” says Greg Colson, associate professor of agriculture and applied economics at the University of Georgia. “So it’s droughts, it’s floods, particularly droughts recently, that tend to drive very rapid increases.”

Another important thing to note is that food prices on average, including the price of eggs and poultry, actually dropped back in 2016, by an average of 1.3 percent. Also in 2016, retail egg prices declined 21.1 percent as egg-laying flocks recovered from the Highly Pathogenic Avian Influenza (HPAI) outbreak.

The number of animals in both dairy and poultry sectors also increased, leading to decreasing prices in 2016. These trends continued into 2017, which makes the rising food prices of 2018 seem surprising. But it may just be the market leveling out.

“There’s a seasonality, a cycle to all this, it’s tough (to forecast) because in general forecasting we’re looking at averages, or we’ve got trends or cycles, it’s easy, but forecasting shocks is very hard,” says Colson. “Nor can you predict, is it going to be a minor or a major drought next year?”

When experts forecast prices, they look at averages and use trends or cycles, but forecasting shocks is tough to do, Colson said. Experts can’t predict if there will be a drought next year, and if there is a drought, they also can’t predict how severe it would be.

Food-at-home prices are typically more volatile than food-away-from-home prices, according to the USDA, because the cost of dining out reflects more than the price of food. In fact, food-away-from-home prices rose an average of 2.6 percent in 2016, while food-at-home prices fell 1.3 percent — the first time such prices have declined since 1967. While eating at home has long been considered a more affordable choice, that was especially true in 2016.

Costs associated with food service, wages and benefits have been increasing and are potentially partially responsible for the percentage differences in rising costs. For example, when Dunkin’ Donuts’ store prices rose in 2016, Dunkin’ CEO Nigel Travis told investors this was due more to changes in minimum wage requirements than commodity pricing.

How outside factors affect food prices

Being aware of what and how external factors affect food prices can help you make sense of how and when you’ll see these changes.

For example, fuel prices and commodity costs can affect what you see on the price tag. Lower fuel prices don’t just affect your gas tank, they also make food prices lower, as transportation costs for commodity goods as well as for distribution make it cheaper for producers. And in 2017, the USDA said there were more egg-laying birds, which helped drive down the cost of eggs.

“There’s a lot of moving parts,” Colson says. “And so even if there’s no magical events in the U.S. if there’s positive/negative shocks elsewhere around the world, it can leave a big impact on the market.”

In the third quarter of 2017, spending at restaurants and other eateries increased 2 percent from the same time last year, according to NDP Group, a market research company. NDP Group attributed most of that increase to rising menu prices.

Although food prices are expected to rise in 2018 because of numerous variables, there’s no need to panic when planning out the monthly grocery budget. Due to the deflation in 2016 and the first half of 2017, 2018 prices are expected to stay below 2015 prices, according to the USDA.

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The Supreme Court Made it Much Harder to Sue Your Employer as a Group

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This week’s U.S. Supreme Court decision holding that private-sector employees may no longer unite to bring class or collective actions against an employer has shaken the historical ground that workers’ rights stand on.

Some of the nation’s 126 million private-sector workers fear what they see as a reversion to 1920’s and ‘30s “yellow dog” contracts that offered take-it-or-leave-it arbitration agreements during one of our nation’s toughest times for the working class.

Differing views on decision

The decision came on Monday, the vote 5-4, with Justice Neil Gorsuch, who joined the Supreme Court last year, writing for the majority.

While some view the decision as a victory for employers, others see it as a further weakening of the ability to fight for fair employment standards in an economic climate where many Americans are living paycheck to paycheck.

In her dissent, Justice Ruth Bader Ginsburg called the decision “egregiously wrong.”

This ruling comes a year after the 10 largest settlements in employment-related categories reached a record high $2.72 billion, according to the 14th annual edition of the Workplace Class Action Litigation Report by Seyfarth Shaw LLP, a Chicago-based law firm. The aggregate settlements of the top 10 are almost $1 billion more than they were in 2016, despite 2017 being a more favorable year overall for employer rather than employee victories, the 2018 report notes.

“I think it’s going to potentially reduce a lot of very costly litigation for employers,” said

Suzanne Boy, an employment law attorney with Henderson Franklin Attorneys at Law in Fort Myers, Fla. “While it certainly does not erase the employees right to bring a claim, it just limits the potential for them to bring them as a group essentially.”

Attorney Benjamin Yormak, who represents employees and is a board-certified expert in labor and employment law, noted that the point of a class or collective action is to streamline the litigation for consistency in the results and to save on costs.

“But the ruling from the Supreme Court does the exact opposite,” said Yormak, an attorney based in Bonita Springs, Fla., who often represents employees with wage and hour disputes.

While Yormak said he believes wage and hour litigation will be the hardest hit, other workplace conditions could become more difficult to fight as well.

Some members of Congress and candidates for office voiced their concerns this week on social media.

What’s changed?

The Federal Arbitration Act, enacted in 1925, specifies that agreed-upon individual arbitration contracts must be enforced, unless that agreement violates another federal law, which, according to those on the dissenting side, is the National Labor Relations Act, which was enacted 10 years later.

The NLRA provides “the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.”

In what Yormak calls an “epic case,” the problem is that the NLRA and the FAA “are not in harmony with one another on this issue.”

Both sides were looking for direction from the Supreme Court, but the outcome was not what he and employees such as those he represents had hoped for, Yormak says.

Who’s affected by the ruling?

Expect a dramatic increase in the number of employers who require arbitration agreements to be signed by their employees, both Boy and Yormak said.

The Economic Policy Institute, a Washington, D.C., nonprofit think tank, notes: “For over eighty years, the National Labor Relations Act has guaranteed workers’ right to stand together for ‘mutual aid and protection’ when seeking to improve their wages and working conditions. However, today’s decision clears the way for employers to require workers to waive that right as a condition of employment.”

According to the EPI, 56.2 percent of private sector employees are already subject to arbitration proceedings that are laid out by their employer, and of those employers, 30 percent include a class-action waiver.

With this new ruling and the number of employers who require such agreements projected to rise sharply, the ways they might implement them could be less-than-transparent, such as the blanket take-it-or-leave-it policies emailed to employees that sparked the three cases that were consolidated by the Court and that served as the basis for the decision.

What you can do

The EPI is asking Congress to ban mandatory arbitration agreements and class and collective action waivers.

“Workers depend on collective and class actions to combat race and sex discrimination and enforce wage and hour standards,”Celine McNicholas, Director of Labor Law and Policy for the EPI said in a statement. “It is essential to both our democracy and a fair economy that workers have the right to engage in collective action.”

For employees, attorneys recommend having awareness and taking a few steps, such as these:

  • Watch out for class-action waiver. “If an employee is presented with an arbitration agreement, he or she should certainly look closely as to whether or not one of these waivers is in there, because they may not be,” said Boy. She adds that if an employee refuses to sign it, an employer can rescind the job offer.
  • Find out the financial ramifications. Boy advises employees to look at the ramifications from a cost perspective, such as how the cost shifting is defined and if it’s split in half between employer and employee.
  • Pay attention to other provisions. Determine if there is a jury trial waiver or what kind of confidentiality is included in the arbitration agreement.

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Survey: Nearly 40 Percent of Students with Loans Consider Dropping Out of College

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What To Do if a Student Loan Refinancer Rejects You

Today’s college student bears the weight of trying to succeed academically as well as his growing debt from student loans.

According to a new MagnifyMoney.com survey, nearly 40% of current students with loans have considered dropping out to avoid racking up more student loan debt. And of the students who thought about leaving before earning their degree, over half were more than $20,000 in debt.

It’s no secret that student debt is causing many individuals to consider whether their degree is even worth the financial stress. An analysis by The Hechinger Report revealed that 3.9 million people with student loan debt dropped out of college during the 2015 and 2016 fiscal years alone.

For fall 2017, total undergraduate enrollment dropped by nearly 224,000 students from a year ago, according to the National Student Clearinghouse Research Center. The center said it’s the sixth consecutive year of total enrollment declines and does not cite reasons, but our survey found financial concerns seem to play a role in student enrollments and dropouts.

The survey was conducted via Google Consumer Surveys’ online student panel from April 23-May 7, 2018. It included responses from 3,069 college students. Approximately 2,000 of respondents had at least some student loan debt.

Key findings: Work, kids add to financial strain

In our survey, 39% of our respondents with student debt said they have considered stopping college before graduating so their financial situation wouldn’t get worse. For those students, balancing school with part-time work was also a major worry, with more than half citing the juggling act as a main reason they considered quitting.

Nearly 45% of those who contemplated dropping out said they worked 20 hours or more per week, with 20% saying they worked more than 40.

Still, 35% of the students in our study who had thought about leaving weren’t working at all, signifying that loan debt is still a major stress for those who don’t earn extra money while in college.

Concerns such as children and expected income seemed to play a large role in these anxieties as well: 30% of students listed balancing work and family as a main reason they had thought about quitting, while 26% said they considered quitting because they were worried about not making enough in their chosen career field.

Debt amounts hit $50,000 and up

In addition to the 52% of our in-debt respondents who owed $20,000 or more, nearly 25% were facing at least $50,000 in total loans. Additionally, almost 10% owed $100,000 or more.

Loan structure varies widely among these students. Based on our survey, 48% of our respondents said they had at least some private loans, while 52% were exclusively using federal aid.

No one-size-fits-all plan for paying off debt

There was no clear favorite strategy for paying off debt. While 39% of people said they would use an income-based plan to manage their loans, 25% said they would use a standard repayment plan. Still, another 26% weren’t yet sure how they would deal with the debt.

Despite the stress caused by student loans, most of our respondents were generally positive about their job prospects after school.

Nearly half said they thought they would make at least $20,000 extra per year as a result of their degree, with 34% of them saying they expected to earn at least $30,000 extra.

Tips for dealing with student debt

Student loans don’t have to be such a headache, though. With the proper planning and preparation, students can work around the overwhelming costs of loan debt and keep the stress of repayment at bay from their daily lives.

Jeremy Wine, supervisor of student loan counseling services for Take Charge America, a Phoenix-based nonprofit credit consulting agency, shared tips for approaching the repayment process.

    • Think ahead. As our survey shows, worrying about loans during college can be a major source of anxiety among students. Still, Wine said it’s best to set up a plan of action long before you put on your cap and gown. “Realize that it’s there and that it’s something you have to pay back,” he said. He added that a nonprofit loan counselor can help you lay out a set of repayment goals and a budget that fits your financial situation.
    • Look at repayment options. If you have federal student loans, there are a number of flexible repayment options available to you. Contact your loan servicer to enroll.
    • Don’t waste money. It may be tempting to use the loan funds on items such as a new computer or a car payment. Wine said it’s best to only use the money for tuition and fees, even if that means getting a part-time job to pay for the rest.
    • Consider consolidation carefully. Student loan consolidation or refinance involves paying off each of your loans with a new loan. Refinancing your debt can help lower your interest payments and make your loans easier to manage. Typically, you’d take out the new loan with a private lender. Just know that if you refinance federal student debt with a private loan, you’ll lose access to flexible repayment programs offered to federal borrowers. There is a consolidation program available for federal loans specifically, however, which is another option.

 

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3 Online Alternatives to Warehouse Clubs

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With a 2-year-old daughter and a full-time job, life is hectic for Dallas mom and marketing professional Amanda Tavackoli. Often, there’s not enough time to think about or run to the store to pick up a pack of diapers, baby wipes or paper towels.

“Both my husband and I work full time, so it’s sometimes difficult for us to schedule everything that needs to happen,” says Tavackoli, 37.

Instead of squeezing a grocery run into her busy schedule, Tavackoli opens the Amazon Prime app on her phone, orders her household supplies, and within two days, they arrive at her doorstep.

Convenience, especially for families, is a factor in the popularity of purchasing household goods through subscriptions like Amazon Prime, says Paul Farris, a marketing professor at the Darden School of Business at the University of Virginia.

Amazon Prime reached 90 million U.S. subscribers, according to 2017 data from Consumer Intelligence Research Partners, a Chicago-based research firm. Almost 95 percent of these members said they will “definitely” or “probably” renew their subscription, according to a July to September 2017 survey by the firm.

At the same time, some of Amazon’s brick-and-mortar competitors are struggling to keep up.

Although Costco Wholesale has about 91.5 million cardholders as of November 2017 — 1.5 million more than Amazon Prime subscribers — the membership warehouse had only a 90 percent renewal rate in 2017, according to its annual report.

And Sam’s Club, the membership warehouse owned by Walmart, recently announced plans to close 63 of its clubs throughout the country and is converting as many as 12 of these facilities into e-commerce fulfillment centers. These closures reduced the company’s number of clubs to 597.

In recent years, Sam’s Club has also experienced low membership renewals. At the beginning of 2016, the renewal rate for its Plus members was only about 35 percent, from 2015 to 2016.

Farris says in addition to Amazon’s convenience factor, its free two-day shipping has helped the company dominate the playing field.

“Everybody in the world is trying to figure out how to handle free shipping,” he said. “Amazon has the (sales) volumes to make that work in a way that is much more difficult for other operations to generate.”

And Farris says Amazon’s ability to transcend local supply shortages has also made it and other e-commerce options more popular in comparison with traditional wholesale clubs.

One factor that favors brick-and-mortar Costco is price. In two separate price comparison studies conducted by investing news magazine Barrons in June 2017 and the San Francisco Chronicle in May 2017, Costco’s prices for a basket of top common household items were often cheaper than on Amazon.

However, the price difference doesn’t bother Tavackoli.

“It’s probably a little bit more expensive to go with something like Amazon, as opposed to running over to Sam’s Club,” she said. “But the convenience outweighs the cost for us, hands down.”

These online options for buying bulk are three alternatives to shopping at brick-and-mortar warehouse clubs.

1. Amazon Prime Pantry

One of the most popular perks of Amazon’s Prime membership ($99 a year) is its free two-day shipping. Amazon Prime also offers members in select cities free same-day delivery and same-day delivery for orders $35 and over. For some household essentials, subscription holders can have orders delivered within one to two hours.

Members have access to Prime Pantry, which ships bulky items like paper goods, trash bags, and oversized boxes and bags of snacks, such as chips and granola bars, that people traditionally purchase at warehouse clubs. Delivery boxes hold up to 45 pounds, and there’s a flat $5.99 fee per box.

“My own family’s use of Prime is that it’s so much more convenient,” Farris said. “You don’t have to worry about hauling it back home.”

Prime also gives its members much more than just fast delivery. Prime members can stream music, movies, and TV shows and gain access to Audible channels. There are also deals and exclusive opportunities for Prime members when shopping.

2. Boxed.com

Boxed.com was founded in 2013 by a group of tech entrepreneurs.

Boxed.com gives consumers another way to buy a large variety of brands in bulk online. In addition to simply buying in bulk, Boxed.com customers are offered curated boxes of products. For example, Boxed.com packages a wide range of snack options, like Cheez-Its, peanuts and Pop-Tarts, and ships them together in one box to customers.

With each order, Boxed.com users can choose to receive free samples, much like when shoppers walk down the aisle of a wholesale store like Costco.

And unlike Amazon, Boxed does not charge customers a subscription fee. Orders that meet a minimum price of $19.99 are shipped for free and ship within one business day.

3. Jet.com

Jet.com is another online one-stop shop that offers everything from household essentials to jewelry and patio furniture.

But Jet’s standout perk is its “real-time savings engine.” This tool allows Jet.com to pack specially marked items in boxes with other products, which the company says lowers the shipping costs for Jet.com and, in turn, lowers the price tag for its customers.

Farris says options like Jet.com could provide specific goods that local stores may not carry or have in stock when shoppers are there in person.

Jet.com, which does not charge a subscription fee, also gives users who know they won’t be returning an item the option to save money by opting out of the ability to return that item for free. Also, for orders over $35, Jet.com ships for free with delivery within two to five days.

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Buy, Sell, Wait? Solving the Move-up Home Dilemma

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Jeff Neal, 33, of Lancaster, Pa., bought a bigger house last year when his wife was pregnant with their third child.

They planned to sell their two-bedroom home first, but the buyer backed out of the deal after the couple made an offer on a four-bedroom house in the same city. Fortunately, Neal’s relatives pooled money and lent him the cash so he could pay off the 30-year mortgage on the first home. As a result, the Neals were able to buy their next home before selling the old one.

Neal, who runs an e-commerce website, eventually became the landlord of his first house for a painful eight months, during which time he drove 35 minutes most weeks between his new house and his old one to make sure things were running properly. The  total cost of maintenance, taxes, insurance and utilities for his old house amounted to more than $9,000. Owing not just money, but gratitude, to generous relatives left Neal feeling even more unsettled.

“It was challenging, nerve-wracking, and stressful,” Neal told MagnifyMoney.

This spring, Neal sold the old house and paid back his relatives. Although he liked the perks of buying before selling — namely a (relatively) relaxing moving experience — he said next time he would try to sell a house before buying anything new.

Second time’s a charm? Buying a home the second time around sounds easier — you’ve gone through the process before and understand the ups and downs — but the process of juggling two transactions at once can be daunting. You’re both buyer and seller now. The seller in you might want to take advantage of a standout spring real estate market, but the experts we talked to have said that personal circumstances matter more.

May is the best month for home-selling, according to real estate research firm ATTOM Data Solutions. A recent report found that homeowners who cashed out in May received, on average, 5.9% above asking price. June was a close second, with sellers taking home a 5.8% premium. On the flip side, the housing market cools down in the fall and colder months (though homeowners in steamy Miami are reportedly better off selling in January). ATTOM data suggest that October and December are the best months to buy, when sellers received a 1.6% premium on average.

So, buy first or sell first? When is the best time to start the process? MagnifyMoney spoke with real estate experts who analyzed four common scenarios for move-up buyers and listed pros and cons of each.

Selling before buying, timing the market

From a pure economic standpoint, experts said it would be ideal for move-up buyers to sell their homes in the spring, and wait until fall to buy their next house. But real life is often far more complicated. Other factors go into the process of buying besides price, and the stress that comes with two moves may not be worth a better bottom line.

However, for those who can time the market this way, experts said this strategy does work to a homeowner’s advantage. When the two separate transactions are not contingent upon each other, you may enjoy much more freedom and peace of mind than if you sell and buy almost simultaneously.

“When you’re selling and you’re not contingent on the front end, it’s a pretty clean sale and you’re not worried about this other purchase,” said Daren Blomquist, ATTOM’s senior vice president. “On the back end, when you’re actually buying a property, you’re a non-contingent offer, which will put you ahead of the line of a lot of other buyers who are continuing on their home-selling.”

George Ratiu, who leads research for the National Association of Realtors, told MagnifyMoney that those who are in a position to sell in the warmer months and then purchase in the fall months may be working professionals without children. They have a lot more flexibility in timing, as they are not tied to the school calendar.

But there’s an inconvenience factor in delaying the time between when you sell and when you buy. You will have to factor in the housing costs during the gap, as well as the pain of moving more than once.

While such a delay could save you some money, Ratiu cautioned that trying to time the real estate market is about as fruitful as trying to time the financial market — both are unpredictable. Plus, local market conditions can vary from regional or national trends.

“I think trying to time the market is a difficult proposition and one which should take a backseat to a buyer’s circumstances,” Ratiu said.

Selling before buying, but almost simultaneously

In most cases, Blomquist said, move-up home buyers sell their old home first and take the profit from that sale and roll it into the purchase of another home later, but not that much later. The processes happens almost simultaneously because people don’t want to have an interruption in moving, he said.

But because these purchases are typically contingent upon the selling of the old home, three parties are involved in the process, which adds a layer of complication.

“It’s not just you as a buyer qualifying for a loan,” Blomquist said. “It’s another buyer qualifying for a loan on your home. That just multiplies the number of things that could go wrong, that would trip up the sale of the home.”

In hot markets, such as the San Francisco Bay Area, sellers fearful of not being able to find that new house wait longer, exacerbating an already tight inventory. And they have good reason to worry: If it takes longer than you thought to find another home, you risk paying more on intermediary housing expenses.

“You are sitting there without a permanent place to live and that is a risk in and of itself, although I would say that’s a lower risk then taking on two 30-year mortgages at the same time,” Blomquist said.

Buying before selling

This could indeed be a risky proposition for those who buy a new home before selling the old one. Upside: You can take your time moving, which offers a certain level of freedom.

“If the market tanks, you may not get as much profit out of that sale later on,” Blomquist said. “Or if you lose your job, you may not be in a position where you’d want to be owning a home” — much less two homes.

But for those who are close to paying off or have already paid off the mortgage on their first home, the circumstances change pretty dramatically: It’s a lot easier to see that old property as an income generator even if you are not able to sell it right away.

Experts say that people who have this flexibility in their timing and finances are most likely to be retirees. (More on them in a second.)

A bridge loan may tide you over. Younger families like the Neals who buy a house before selling the first, but perhaps lack interest-free financial assistance from relatives, may want to consider a bridge loan. A bridge loan provides the short-term funding required to purchase the new home, buying you time to get your current home ready for sale. Ideally, you would move into your new home, sell your old property, then pay off the loan quickly.

The strategy is not for every real estate buyer because it comes with risks. Plus, bridge loans are not easy to obtain for many. Borrowers in general need to have excellent credit, a low debt-to-income ratio and home equity of 20% or more.

Blomquist said bridge loans work best in tight housing markets where sellers are confident that their first home will sell easily. Read more about bridge loans in this guide.

Hold onto that first home as a rental instead of selling

Retirees who have paid off their first house, and therefore wouldn’t shoulder two mortgages when they buy their next home, may want to hold onto the first home as a rental instead of selling. Or, young professionals moving for a new job where home prices are significantly lower might be able to swing two house payments.

“If you’re able to hold on to that first home, it can become a rental that can generate positive income for you potentially if the numbers work out,” Blomquist said. “And over time, if you own it for another 20 or 30 years, it will likely appreciate in value as well.”

To be sure, not everyone can afford to do this. But if you are able to manage it, a lender will likely count your rental earnings as income, which will also help you to cover the mortgage payment.

However, as we learned in the last recession, home prices don’t always appreciate — sometimes they slide. Maintaining two properties is also no easy task. Ratiu suggested you check your financial goals and time horizon, and think through whether it’s realistic for you to manage all the headaches that may come with renting a residence before deciding to become a landlord.

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