MONEY work life balance

Millennials Want Work-Life Balance Too. Here’s How They Can Get It

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Don't be afraid to ask.

We all want a life more that’s more balanced between work and fun. But millennials, more than any other age group, are the unhappiest when they don’t get it.

Nearly one-third of millennials say managing their work, family, and personal responsibilities has become more difficult in the past five years. And nearly half—47%—are working more hours, compared with 38% of Generation X and 28% of baby boom workers, according to a recent survey by Ernst & Young’s Global Generation Research.

More than other generations, millennials want flexibility in terms of where and how they work and are the most willing to take a pay cut, pass up a promotion, or even relocate to manage work-life demands better, according to the survey.

But employers don’t make it easy. Nearly one in six young workers surveyed by EY say they suffer negative consequences for choosing a flexible schedule.

Why should employers care about millennials want? This group—age 18 to 34—now officially outnumber Generation X as the most populous group in the workforce and are on track to surpass baby boomers soon. As employers try to attract and retain the best and the brightest, knowing what’s important to them is, well, important. Turnover among millennials tends to be higher than other work cohorts, and high turnover is costly to companies.

The E&Y survey further illuminates why this generation is more adamant about wanting flexibility. Millennials are hitting the time of their lives when they marry, buy homes, and have kids at the same time the demands of work are escalating.

“Earlier generations were probably too afraid to ask for flexibility. The mindset was that work comes first,” says Rose Ernst, national director of G10 Associates program, which works with companies to hire and retain college graduates and Generation Y workers. But many millennials grew up with parents who got laid off or whose careers suffered during recessions despite putting in long hours in the office. Meanwhile, technology has evolved so it’s easier to work from anywhere.

The dynamic on the home front has also changed. Millennials are almost twice as likely (78%) to have a spouse or partner working at least full time, compared with 73% of Gen Xers and 47% of baby boomers.

Until more millennials advance in their careers and become managers, the reality is that an older generation of workers still sets the standard for where and how work is done at many organizations. Here’s how to ask your boss for a flexible schedule and make it work without hurting your career.

  • Be up front. If you’re interviewing for a job, don’t wait until late in the game to ask about the possibility of a flexible work schedule, says Ernst. Research the company before you interview to find out what the culture is like in terms of nontraditional work arrangements. Clearly some jobs are going to be more adaptable than others. If you’re a human resources person focused on recruiting and meeting with job candidates, you may be able to do some work from home or after hours. If you’re managing a large team of people who work in one location, it’ll be more difficult to work remotely.
  • Be reasonable about why you’re asking. If you want to leave at 4 p.m. twice a week to take a class relevant to work, or if you need a few weeks off every February for volunteer work in Costa Rica, that’s going to be perceived differently than asking to leave early because you play in a softball league on Thursday nights.
  • Have a plan. If you’re already on staff and want to move to a flexible schedule, such as job sharing or telecommuting, prepare a proposal on how you’ll get your work done.
  • Don’t be a flake. It’s obvious but critical to be reliable. You’re much more vulnerable to being judged as a slacker when people can’t see you working. Always be reachable, deliver work on time or early, and make it a point to check in regularly.
  • Give and take. Volunteer for projects when you can or offer to help out colleagues on deadline, especially if others are making accommodations for your work schedule.

It remains to be seen how quickly work norms are changing. But there is power in numbers. “The millennials are a huge cohort of workers who value flexibility more than previous generations,” Ernst says. “That gives them leverage to change how we work.”

MONEY Careers

Should I Ask About Maternity Leave During a Job Interview?

Robert A. Di Ieso, Jr.

Q: I am interviewing for a new job. I hope to start a family soon. When is it ok to ask about a company’s maternity leave policy?

A: Family leave policies have been getting a lot of attention lately, especially because of a new proposal by Navy Secretary Ray Mabus. In a speech in Annapolis Wednesday, Mabus unveiled a host of initiatives to improve quality of life for sailors and Marines, including doubling the amount of paid maternity leave from six weeks to 12 weeks in a bid to attract more women to the services.

But growing awareness of the issue doesn’t change the fact that it’s a tricky one to raise when you’re trying to land a new position.

First of all, it’s generally not a good idea to ask about benefits—any benefits—during your initial job interview, says Rose Stanley, senior practice leader for WorldatWork, an association of human resource professionals. If you want the job, your entire focus should be on convincing the would-be employer that you’re the best candidate. “The hiring manger wants to know why you want the job and what you bring to the table,” says Stanley, “not talk about what’s in it for you.” In general, save questions about benefits and other company perks for later in the interview process, or even for after you get an offer.

But, of course, asking about maternity leave is an especially tricky case because, unlike 401(k) plans and health insurance, using this benefit involves an extended absence from the office. It’s long been illegal to fire pregnant women or otherwise discriminate against them thanks to the Pregnancy Discrimination Act (PDA) passed in 1978. And last year the Equal Employment Opportunity Commission updated its guidelines by, among other things, clarifying that a company cannot refuse to hire a woman because she is pregnant or may become pregnant in the future. (If you think that’s the reason you aren’t hired for a job, you can file a complaint with the EEOC.)

Not even these legal safeguards, however, can guarantee that a potential leave won’t (consciously or unconsciously) count against you. That kind of discrimination, after all, is difficult, time consuming, and costly to prove. So if maternity leave is an important issue for you, do all you can to learn about a company’s leave policies even before you go for an interview.

Start by knowing the rules by which every company must abide. Unfortunately, compared to other countries, the U.S. does not guarantee much in the way of paid time off for new parents. But the federal Family and Medical Leave Act does entitle eligible U.S. employees to 12 weeks of family unpaid leave during any 12-month period, after which they are entitled to get their job back. (To be eligible, you have to have worked at the company for at least 12 months and at a location where the company employs 50 or more employees within 75 miles.) Some states, meanwhile, guarantee even more parental leave rights; California, for example, mandates paid leave.

Some private companies do offer new parents paid time off, usually through a combination of short-term disability, sick leave, vacation time, and personal days. A good place to start inquiring is the careers pages of the corporate website, where many companies proudly tout their benefits. If that isn’t the case, you can try using your network to contact people who work at the company and who may be able to enlighten you about its policies.

Then there are external sources. Some job sites such as Glassdoor provide details about corporate perks and benefits. Working Mother publishes a list of the 100 best companies for working mothers. And Care.com has a list of companies with the best family leave.

Even if you can’t find detailed info about your target company, it’s worth collecting benefits information about other companies in the same industry and local companies of around the same size. If you end up with an offer, you can use what you find as a benchmark for negotiations. Good luck!

 

MONEY Ask the Expert

How to Save For Retirement When You Don’t Have a 401(k)

Ask the Expert Retirement illustration
Robert A. Di Ieso, Jr.

Q: The company I work for doesn’t offer a 401(k). I am young professional who wants to start saving for retirement but I don’t have a lot of money. Where should I start? – Abraham Weiser, New York City

A: Millions of workers are in the same boat. One-quarter of full-time employees are at companies that don’t offer a retirement plan, according to government data. The situation is most common at small firms: Only 50% of workers at companies with fewer than 100 employees have 401(k)s vs. 82% of workers at medium and large companies.

Certainly, 401(k)s are one of the best ways to save for retirement. These plans let you make contributions directly from your paycheck, and you can put away a large amount ($18,000 in 2015 for those 49 and younger), which can grow tax sheltered.

But there are retirement savings options beyond the 401(k) that also offer attractive tax benefits, says Ryan P. Tuttle, a certified financial planner at Connecticut Wealth Management in Farmington, Ct.

Since you’re just getting started, your first step is to get a handle on your spending and cash flow, which will help you determine how much you can really afford to put away for retirement. If you have a lot of high-rate debt—say, student loans or credit cards—you should also be paying that down. But if you have to divert cash to pay off loans, you won’t be able to put away a lot for savings.

That doesn’t mean you should wait to put money away for retirement. Even if you can only save a small amount, perhaps $50 or $100 a week, do it now. The earlier you get going, the more time that money will have to compound, so even a few dollars here or there can make a big difference in two or three decades.

You can give an even bigger boost to your savings by opting for a tax-sheltered savings plan like an Individual Retirement Account (IRA), which protects your gains from Uncle Sam, at least temporarily.

These come in two flavors: traditional IRAs and Roth IRAs. In a traditional IRA, you pay taxes when you withdraw the money in retirement. Depending on your income, you may also qualify for a tax deduction on your IRA contribution. With a Roth IRA, it’s the opposite. You put in money after paying taxes but you can withdraw it tax free once you retire.

The downside to IRAs is that you can only stash $5,500 away each year, for those 49 and younger. And to make a full contribution to a Roth, your modified adjusted gross income must be less than $131,000 a year if you’re single or $193,000 for those married filing jointly.

If your pay doesn’t exceed the income limit, a Roth IRA is your best option, says Tuttle. When you’re young and your income is low, your tax rate will be lower. So the upfront tax break you get with a traditional IRA isn’t as big of a deal.

Ideally, you’ll contribute the maximum $5,500 to your IRA. But if you don’t have a chunk of money like that, have funds regularly transferred from your bank account to an IRA until you reach the $5,500. You can set up an IRA account easily with a low-fee provider such as Vanguard, Fidelity or T. Rowe Price.

Choose low-cost investments such as index funds and exchange-traded funds (ETFs); you can find choices on our Money 50 list of recommended funds and ETFs. Most younger investors will do best with a heavier concentration in stocks than bonds, since you’ll want growth and you have time to ride out market downturns. Still, your asset allocation should be geared to your individual risk tolerance.

If you end up maxing out your IRA, you can stash more money in a taxable account. Look for tax-efficient investments that generate little or no taxable gains—index funds and ETFs, again, may fill the bill.

Getting an early start in retirement savings is smart. But you should also be investing in your human capital. That means continuing to get education and adding to your skills so your earnings rise over time. Your earnings grow most quickly in those first decades of your career. “The more you earn, the more you can put away for retirement,” says Tuttle. As you move on to better opportunities—with any luck—you’ll land at a company that offers a great 401(k) plan, too.

Do you have a personal finance question for our experts? Write to AskTheExpert@moneymail.com.

Read next: Quick Guide to How Much You Need to Retire

MONEY 401(k)s

This Retirement Saving Mistake Could Cost You $43,000

piggy bank split in half (half pink, half red)
Levi Brown—Trunk Archive

Nothing is free when it comes to investing, but your 401(k) match comes close. Here's how to get the most from it.

People are panicked about having enough money for retirement. Yet millions of workers are leaving thousands of dollars on the table every year because they’re not doing one thing: Contributing enough to receive a full employer matching contribution to their 401(k).

Some 98% of employers with a 401(k) offer some kind of match, according to AonHewitt. Typically, employers contribute a dollar for each dollar you save in your 401(k), up to 6% of your salary. Other 401(k) surveys show that matching 50¢ for each dollar you contribute is more common.

Whatever the match level, it’s free money. And one in four workers miss out on getting the full amount because they’re not saving enough, according to a new research report by Financial Engines, which provides financial advisory services to 401(k) plans.

For the average worker, that means forgoing $1,336 a year or an extra 2.4% of annual income, assuming a dollar for dollar match. Over time with compounding, you could be missing out on as much as $42,855 over 20 years. All told, U.S. workers are passing up about $24 billion a year in matching contributions, according to Financial Engines.

By not taking full advantage of the match, workers are giving up an immediate guaranteed return for every dollar they invest, Financial Engines’ director of financial technology Greg Stein noted in the study.

The people most likely to miss out are the ones who need it the most: Younger workers and those with lower incomes. Among people with 401(k)s who earn less than $40,000 a year, 42% don’t save enough to get the full match, compared with just 10% of workers earning more than $100,000 a year. Workers younger than 30 are twice as likely not to earn a match compared with workers over age 60, 30% vs. 16%.

Though retirement contributions generally increase with age, those amounts tend to flatten out between ages 35 and 45, according to the report. That’s not surprising since that’s the time period when many households incur big-ticket expenses, such as buying a house and raising kids.

If boosting your 401(k) savings rate feels like a stretch, here’s a simple strategy: Increase the amount you contribute gradually, by just 1% a year—perhaps when you get a raise. Since the money comes out of your paycheck pretax, a small savings hike won’t feel like a big pinch.

Here’s an example: If you earn $50,000 a year and are in the 25% tax bracket, boosting your contribution from 3% to 6% will only reduce your weekly paycheck by $24. Over 35 years, that would add more than $320,000 to your retirement savings. Use this calculator to see impact of your retirement contributions on your paycheck.

Even if you contribute enough to get a full 401(k) match, don’t stop there. A 6% or so savings level probably isn’t enough to ensure a comfortable retirement—financial planners recommend that people save 10% to 15% of their income each year. But ensuring that you get all your free match money will make it much easier to reach your goal.

Read next: These 4 Rules of Thumb Can Screw Up Your Retirement

MONEY Ask the Expert

Should I Use Home Equity to Invest for Retirement?

Ask the Expert Retirement illustration
Robert A. Di Ieso, Jr.

Q: We recently retired. We have a small mortgage on our home and lots of equity. Should we refinance our mortgage to free up additional money to invest for our retirement? —Bea Granniss, Amityville, N.Y.

A: Even at today’s low mortgage rates, it’s risky to borrow against your home at this stage of your life, says Tim McGrath, a certified financial planner and founding partner of Riverpoint Wealth Management in Chicago.

It’s true that more older Americans are retiring with heavy debt loads. But taking on additional debt when you are no longer bringing in income puts you in a precarious financial position. In retirement, your income is fixed—you probably have Social Security, your retirement savings, and possibly a pension. If an unexpected expense comes up, your chief recourse is to adjust your spending on discretionary costs, such as eating out and taking vacations. If you pile on more debt, you may not have enough leeway to avoid cutting your fixed expenses, says McGrath.

No question, refinancing looks attractive now. At today’s low interest rates, freeing up cash for a potentially higher return is a tempting notion—after all, stocks have done pretty well in recent years.

But it’s a mistake to compare today’s low mortgage rates to an expected return on investment, especially for retirees. Moreover, the basic math of refinancing may not make sense given your financial situation.

Let’s start with the refinancing rules. Unless you have a mortgage rate that’s significantly higher – at least a half percentage point above the current rate—you won’t free up much income with a refi. And now that you’re not working, it will be harder to get the best terms from a bank.

Borrowing against your home will reset the loan, which means you’ll be paying more in interest over time instead of paying down principal. “Instead of building more equity, you’ll be racking up more debt,” says McGrath.

Refinancing also costs thousands of dollars in fees. So you’ll need to stay in your home for a long time in order to recoup those expenses. But when you’re older, you’re more likely to reach a point where you want to downsize or move.

As for those enticing investment returns, there’s no guarantee the money you invest will produce the gains you’re seeking—or any gain at all. Lately, many investment pros have been warning that the returns on stocks and bonds are likely to be lower in the years ahead. Most retirees, in fact, are better off with a more conservative portfolio, since you have less time and financial flexibility to ride out market downturns.

Of course, every retiree’s financial situation is different. Refinancing might be a good solution if you want to pay off other high-rate debt. Or if you’re struggling to afford the mortgage payment, and you want to stay in your home, then refinancing could give you more of a cushion for your regular expenses.

But that doesn’t sound like the case for you. As McGrath says, “Taking money from your home equity and gambling on what could happen by investing it is too much risk in your retirement.”

Read next: How to Squeeze the Most Value from Your Home

MONEY 401(k)s

401(k) Savings Hit a Record High. How Do You Stack Up?

squirrel on top of pile of nuts
Getty Images

Workers are socking away more for retirement in their 401(k)s, a Fidelity report finds. But it may not be enough.

Some good news on the retirement front: The average 401(k) account balance reached a record high and workers are stashing away more in their plans, according to Fidelity, the largest retirement savings plan provider.

The average 401(k) held $91,800 in the first quarter of this year, up 3.6% from a year ago. Meanwhile, a record 23% of employees in Fidelity plans hiked their 401(k) contributions in the past year. The average savings rate, including both employer and employee contributions, climbed to 12.5%.

For employees in a 401(k) plan for 10 or more years, the average balance was a hefty $251,600, up 12% year over year. For those with both a 401(k) and IRA at Fidelity, the average combined balance rose 2.2% to $267,200.

Impressive, but it may not be enough. The Fidelity report doesn’t spell it out, but most of these gains are owed to the bull market, which will eventually fade. Meanwhile, the typical employee is still far behind in retirement saving.

That may seem counter-intuitive, given those lofty balances, but the averages are skewed upwards by high-income savers. The typical working household nearing retirement with a 401(k) and an IRA has a median $111,000 combined, which would yield less than $400 a month in retirement, according to a recent report by the Boston College’s Center for Retirement Research.

For households ages 55 to 64 earning $40,000 to $60,000 a year, the median balance in 401(k) and IRA accounts is just $53,000. For the same age group earning $138,000 or more, the median account is $452,000, according to CRR.

Financial planners recommend saving 10% to 15% of your income annually, starting in your 20s. The goal: amass 10 to 12 times your final annual earnings in order to have enough to maintain your standard of living in retirement. So if you make $60,000 a year, you should accumulate $600,000 to $720,000 by the time you retire.

That’s a tall order, and you could certainly live on less—many people do. Still, to have a shot at affording a decent retirement, you need to save consistently over the long term. And to do that, you need a plan, which gives a huge advantage to workers who have a 401(k).

According to the Employee Benefit Research Institute’s latest Retirement Confidence survey, those with 401(k) plans are much more optimistic about their retirement prospects: 71% of those with a plan are very or somewhat confident they will live comfortably in retirement, vs. just 33% of those who are not, EBRI found. Similarly, the CRR report shows that 68% of older households with the highest median retirement account balances had a 401(k) vs. just 22% for the group with the least savings.

Employers could be doing more to encourage that kind of savings behavior. Just one-third of 401(k) plans automatically enroll new workers but only 13% of companies automatically increase contribution rates each year, according to Fidelity.

To see if you’re on track, run your numbers on an online retirement savings calculator, such as those offered by T. Rowe Price or Vanguard. Get MONEY’s advice on how to make the most of your 401(k) at every stage of your life here. If you don’t have a 401(k), here’s what you need to know about IRAs.

Get more tips on investing for retirement:
What Is the Right Mix of Stocks and Bonds for Me?
How Many Funds Do I Need?
How Often Should I Check on My Retirement Investments?

MONEY Ask the Expert

Can I Put My Required Minimum Distribution into a Roth IRA?

Ask the Expert Retirement illustration
Robert A. Di Ieso, Jr.

Q: Can I convert the required minimum distribution from my regular IRA into a new Roth IRA account after paying the income taxes if I am not working? I want to have access to the money in case an emergency comes up. — Richard D’Arezzo, Acworth, GA

A: Sorry, no. According to IRS publication 590-A, the annual required minimum distribution (RMD) from your traditional IRA cannot be converted to a Roth IRA, says Tom Mingone, a financial planner at Capital Management Group of New York. But you do have options that can minimize taxes yet provide access to your money for emergencies.

Before we get to these alternatives, here’s a quick review of RMDs. These distributions are required under IRS rules starting at age 70 ½—after all, you’ve been deferring the taxes that are owed on contributions to your IRAs, and the bill has to come due sometime. If you don’t take the distribution, you’ll pay a 50% tax penalty in addition to the regular income tax on the amount you are required to withdraw.

IRS rules prohibit putting your RMD into another tax-advantaged retirement account. But you can convert the remaining portion of your traditional IRA assets to a Roth IRA, though it will mean paying more taxes. “You just have to satisfy the RMD requirement before you do a Roth conversion,” says Mingone. (If you aren’t working and receiving earned income, you can’t make a contribution to a Roth but once the money is in a traditional IRA, you don’t need to have additional earned income to move the money to a Roth IRA.)

If you make a mistake and roll over or convert your RMD, it will be treated as an excess contribution, and you’ll pay a penalty of 6% per year for each year it remains in the Roth or traditional IRA. You have until October 15 of the year after the excess contribution to correct it.

Is it a smart move to convert a traditional IRA to a Roth? That depends on your goals and your finances, says Mingone. Putting money into a Roth gives you a lot more flexibility because you’ll no longer be subject to the RMD rule—you can choose when and how much you take out. And unlike traditional IRA withdrawals, money pulled from a Roth won’t trigger taxes.

Still, there’s a downside to the conversion: that tax bill on the amount you convert. Depending on the size of the bill and the years you have to invest, the benefit may be small. In any case, consider this move only if you can pay the taxes with money outside your IRA, says Mingone. (To get an idea of the taxes you would owe, try this Vanguard calculator.)

The case for a Roth is generally strongest for younger people who have more time for the money to grow tax-free. Still, even at 70 ½, you could have many years of growth. And if you want to leave money to heirs, a Roth offers the greatest flexibility.

But if you need access to the money for emergencies, a new Roth may prove costly. You can take the principle out, but any earnings on the amount you deposit will be taxed if you withdraw it in the first five years.

If you don’t want to tie your money up in a Roth, you could just invest in a taxable account. Look for tax-efficient options such as index mutual funds. And consider putting some of your RMD in municipal bonds, which are free from federal income tax and often state and local taxes too, Mingone says. Tax-exempt bonds have been a tear recently, which suggests that risks are rising. Still, if you’re willing to hold on through market dips, munis may provide higher after-tax yields than taxable bonds.

Do you have a personal finance question for our experts? Write to AskTheExpert@moneymail.com.

Read next: Why Roth IRA Tax Tricks Won’t Rescue Your Retirement

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