MONEY retirement planning

One Thing Successful Retirement Savers Have in Common

Gold Eggs
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With the markets rebounding, workers with 401(k)s feel more confident about retirement. Everyone else, not so much.

Retirement confidence in the U.S. stands at its highest point since the Great Recession, new research shows. But the recent gains have been almost entirely confined to those with a traditional pension or tax-advantaged retirement account, such as a 401(k) or IRA.

Some 22% of workers are “very” confident they will be able to live comfortably in retirement, according to the Employee Benefit Research Institute 2015 Retirement Confidence Survey, an annual benchmark report. That’s up from 18% last year and 13% in 2013. But it remains shy of the 27% reading hit in 2007, just before the meltdown. Adding those who are “somewhat” confident, the share jumps to 58%—again, well below the 2007 reading (70%).

The heightened sense of security comes as the job market has inched back to life and home values are on the rise. Perhaps more importantly: stocks have been on a tear, rising by double digits five of the last six years and tripling from their recession lows.

Those with an employer-sponsored retirement plan are most likely to have avoided selling stocks while they were depressed and to have stuck to a savings regimen. With the market surge, it should come as no surprise that this group has regained the most confidence—71% of those with a plan are very or somewhat confident, vs. just 33% of those who are not, EBRI found. (That finding echoes earlier surveys highlighting retirement inequality.)

Among those who aren’t saving, daily living costs are the most commonly cited reason (50%). While worries over debt are down, it remains a key variable. Only 6% of those with a major debt problem are confident about retirement while 56% are not confident at all. But despite those savings barriers, most workers say they could save a bit more for retirement—69% say they could put away $25 a week more than they’re doing now.

At the root of growing retirement confidence is a perceived ability to afford potentially frightening old-age expenses, including long-term care (14% are very confident, vs. 9% in 2011) and other medical expenses (18%, vs. 12% in 2011). The market rebound probably explains most of that, though flexible and affordable new long-term care options and wider availability of health insurance through Obamacare may play a role.

At the same time, many workers have adjusted to the likelihood they will work longer, which means they can save longer and get more from Social Security by delaying benefits. Some 16% of workers say the date they intend to retire has changed in the past year, and 81% of those say the date is later than previously planned. In all, 64% of workers say they are behind schedule as it relates to saving for retirement, drawing a clear picture of our saving crisis no matter how many are feeling better about their prospects.

Those adjustments are simply realistic. Some 57% of workers say their total savings and investments are less than $25,000. Only one out of five workers with plans have more than $250,000 saved for retirement, and only 1% of those without plans. Clearly, additional working and saving is necessary to avoid running out of money.

Still, many workers have no idea how much they even need to be putting away. When asked what percentage of income they need to save, 27% said they didn’t know. And almost half of workers age 45 and older have not tried to figure out how much money they need to meet their retirement goals, though those numbers are edging up. As previous EBRI studies have found, workers who make these calculations tend to set higher goals, and they are more confident about reaching them.

To build your own savings plan, start by using an online retirement savings calculator, such as those offered by T. Rowe Price or Vanguard. And you can check out Money’s retirement advice here and here.

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

TIME Food & Drink

Blue Bell Creameries Issues Recall of All Products

Blue Bell ice cream in Lawrence, Kan., Friday, April 10, 2015
Orlin Wagner—AP Blue Bell ice cream in Lawrence, Kans., on April 10, 2015

Blue Bell Creameries is recalling all of its products, thanks to a listeriosis scare

(BRENHAM, Texas) — Texas-based Blue Bell Creameries issued a voluntary recall Monday night for all of its products on the market after two samples of chocolate chip cookie dough ice cream tested positive for listeriosis.

The company “can’t say with certainty” how the bacteria was introduced to the manufacturing line, Blue Bell’s chief executive Paul Kruse said in a statement.

“We’re committed to doing the 100 percent right thing, and the best way to do that is to take all of our products off the market until we can be confident that they are all safe,” Kruse said.

The first recall in the family-owned creamery’s 108-year history was issued last month after the U.S. Centers for Disease Control and Prevention linked ice cream contaminated with listeriosis to three deaths at a Kansas hospital. Five others in Kansas and Texas were sickened with the disease.

The foodborne illness was tracked to a production line in Brenham, Texas, and later to a second line in Broken Arrow, Oklahoma.

The recall extends to retail outlets in Alabama, Arizona, Arkansas, Colorado, Florida, Georgia, Illinois, Indiana, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Nevada, New Mexico, North Carolina, Ohio, Oklahoma, South Carolina, Tennessee, Texas, Virginia, Wyoming and international locations.

A manufacturing facility in Oklahoma where operations were suspended earlier this month for sanitizing will remain closed as Blue Bell continues to investigate the source of the bacteria, the statement said.

Blue Bell is also implementing a process to test all of its products before releasing them to the market.

TIME Media

ESPN Calls Foul on Verizon’s Play to Break Up Cable Bundles

Verizon's offering relegates ESPN to a sports add-on package

Verizon is finally offering customers a way to pay for cable without having to buy hundreds of channels they never watch. But the company’s plan to bust up the cable bundle may run afoul of its contracts with major cable networks, like ESPN.

Verizon’s new TV package, dubbed Custom TV, lets customers combine a base package of broadcast networks and a few cable channels like CNN with genre-specific additional packages related to sports, entertainment and other categories. Instead of being included in the primary offering, Verizon’s new service relegates ESPN to a sports add-on pack.

However, the Disney-owned ESPN said Friday that Verizon’s new slimmed down cable bundle “would not be authorized by our existing agreements,” claiming its deal with Verizon stipulates its flagship channels not be moved to an add-on sports tier. A Verizon spokeswoman did not respond to TIME’s request for comment, though a company executive earlier told the Wall Street Journal that the new bundles were expected to comply with contracts already struck with cable networks.

It’s no surprise that ESPN would be up in arms about being shuttled over to an optional tier of cable service. The sports network and other cable channels rake in huge profits because cable subscribers pay for many more channels than they actually watch. The average TV household pays for 189 channels about only watches about 17, according to Nielsen. That means popular channels like ESPN effectively subsidize less-viewed channels, like The Disney Channel. Initiatives like Verizon’s plan, as well as slimmed-down cable packages like Dish Network’s Sling TV streaming service, threaten this very lucrative model.

As of Monday morning, Verizon was still advertising ESPN as a channel available in the sports add-on pack for its Custom TV offering.

TIME Telecom

Why Nokia’s Blockbuster Merger Turned Into Such a Mess

Nokia's chairman Risto Siilasmaa, Nokia's Chief Executive Rajeev Suri, telecommunications company Alcatel-Lucent's Chief Executive Officer Michel Combes and Alcatel-Lucent's chairman of the supervisory board Philippe Camus shake hands prior a press conference on April 15, 2015 in Paris.
Chesnot—Getty Images Nokia's chairman Risto Siilasmaa, Nokia's Chief Executive Rajeev Suri, telecommunications company Alcatel-Lucent's Chief Executive Officer Michel Combes and Alcatel-Lucent's chairman of the supervisory board Philippe Camus shake hands prior a press conference on April 15, 2015 in Paris.

Nokia marrying Alcatel-Lucent will have a huge impact

The big headlines in tech M&A come when they involve growth – Facebook buying Instagram or WhatsApp, for example – but more often they tie together two aging companies in established but still important industries. Ideally, in those cases, the merging partners will complement each other’s weaknesses, making for a stronger corporate marriage.

Take the mature but competitive telecom-equipment industry. If selling and maintaining the arcane gear that quietly keeps the Internet humming is hardly a sexy industry, it’s crucial if you want to watch a video of a dog trying to catch a taco in its mouth. Last week, when one industry giant (Nokia) offered to merge with another (Alcatel-Lucent) in a $16.6 billion deal, it seemed like a textbook tech M&A deal, one that analysts have been expecting for years.

Instead, the announcement of the deal seems to have left everyone unhappy. Analysts lined up to argue why the tie-up would be troubled, while investors wasted little time in selling off shares of both companies. Since the deal was announced Wednesday, Nokia’s shares have lost 4% of their value and Alacatel-Lucent’s have lost 21%.

This is the rare M&A deal that everyone has long-expected to happen and yet seems to please almost nobody. The telecom-equipment sector has been rife with consolidation and restructuring for years, as companies scramble to grab control of technologies that power broadband, wireless networks, networking software and cloud infrastructure.

Both Nokia and Alcatel-Lucent have been undergoing wrenching restructuring to compete with Sweden’s Ericsson, the market leader, and China’s up-and-comers Huawei and ZTE. Nokia sold its handset business to Microsoft for $7.2 billion in 2013, which helped return the company to profitability last year. Now that Nokia is alsoshopping around its mapping software, a merger seems like an important step toward strengthening its remaining operations in the telecom-equipment business.

Alcatel-Lucent has been having a harder time in the past decade. In 2006, the stock of France’s Alcatel was trading near $16 a share when it paid $13 billion for US-based Lucent. But clashing cultures, rigid bureaucracies and a failure to innovate led to years of losses at the combined firm, pulling Alacatel-Lucent’s stock down as low as $1 a share. Years of restructuring brought tens of thousands of job cuts but also, in recent quarters, signs the company may be making a fragile comeback.

So why did everyone expect a Nokia-Alcatel merger to work when the Alcatel-Lucent one failed? For one, there was a complementary fit in terms of the product and geographical markets both companies served. Also, both companies had just emerged from painful restructurings holding smaller shares of a competitive market. By combining, they could command a market share rivaling Ericsson’s and also marshall resources needed for the high R&D costs of next-generation gear.

That was the theory on paper, and for years reports surfaced periodically that the two were talking about joining forces. Talks of Nokia buying Alcatel’s wireless business fell through in 2013, and another report of a merger last December went nowhere. Now that it’s happening, the conversation has shifted from speculation about the deal to the details of how it would work. And some of the details aren’t pretty.

Any large-scale tech merger requires years of integration of sales, engineering and managerial ranks. In the best case, it takes years to complete. In the worst, it leads to entrenched fiefdoms and a bureaucratic hall of mirrors. And in areas where there is overlap, job losses will follow. But Alcatel-Lucent is partly owned by the government of France, which sees the company as a strategic national asset. It will fight massive post-merger layoffs in France, and the Finnish government is likely to do the same.

Analysts expect the trouble that all this work involves will hamper Nokia for some time. Some argued Nokia should have bought only Alcatel’s wireless assets, but since that didn’t didn’t work Nokia offered a discount for the whole company. And what a discount: Nokia’s bid is worth only 0.9 times Alcatel-Lucent’s revenue last year, well below the average figure of 2.5 times revenue for recent telecom deals. Alcatel-Lucent’s shareholders feel the discount is too much, leading to last week’s selloff.

So as inevitable as a combination of Nokia and Alcatel-Lucent seems, there are regulatory, integration and cultural issues that will complicate things for years. In the meantime, few investors are pleased about the deal. Throwing these companies together may be like, well, that taco heading toward the dog’s mouth: the appetite is there, but in the end all you have is a mess.

TIME Companies

How Google Almost Bought Tesla

Tesla Model S vehicles parked outside a car dealership in Shanghai on March 17, 2015.
Johannes Eisele—AFP/Getty Images Tesla Model S vehicles parked outside a car dealership in Shanghai on March 17, 2015.

Tesla was almost acquired as it approached bankruptcy

Tesla Motors is flying high these days, with a backlog of orders for its Model S electric car and a stock price above $200. But two years ago, the company was reportedly in such dire straits that it was nearly sold to Google.

An excerpt of an upcoming biography of Tesla CEO Elon Musk published by Bloomberg explains that Musk was on the verge of selling his unprofitable electric car company to Google early in 2013. Musk and Google CEO Larry Page are old friends, and Musk was able to work out some very favorable terms for the deal—Tesla would sell for $6 billion, Google would bankroll an extra $5 billion in capital expenditures for factory expansions and Musk would remain at the helm of Tesla for as long as eight years.

According to Bloomberg, the deal would have ensured that Tesla remained an independent brand until it produced an electric car that appealed to the mainstream market.

Spokespeople for Google and Tesla did not immediately respond to a request for comment.

When the two companies were close to inking the deal, Model S sales finally began to take off, and Tesla squeaked out an $11 million profit in the first quarter of 2013. No longer fearing bankruptcy, Musk called off the deal with Google.

The two tech firms may soon be adversaries as Google expands its own ambitions in the world of driverless electric cars.

TIME Companies

Target Struggles to Deal With Demand for Lilly Pulitzer Line

Discount retailer’s web site crashed several times as fashionista's collection went on sale

Target was hoping for a smooth launch for one of its most highly anticipated designer collaborations in years.

Instead, the discount retailer’s website was overwhelmed in the early hours on Sunday as legions of fashionistas who had been up overnight tried to snap up Lilly Pulitzer’s fashions, only to encounter delays in the colorful beachwear line’s availability on Target.com and in many case, end up empty-handed. The incident has raised questions as to why the retailer wasn’t fully ready for the onslaught.

At about 1 a.m. Eastern time, Target told customers via its Twitter feed that its “website is updating and will be shoppable soon.” Then, two hours later, Target said that “due to overwhelming excitement” for the Pulitzer line it was adjusting Target.com—only to tell shoppers an hour later that it was “continuing to work through our website experience.” The company was limiting the number of customers who could access the site at certain times, and at one point, Target made the site inaccessible for 20 minutes or so to grapple with the heavy traffic.

Finally, at about 6 a.m., the collection was available on line, but sold out so quickly that many night owl shoppers couldn’t buy anything, provoking a lot of anger that spilled over into social media.

Because this was a limited collection, Target will not be replenishing its stock, compounding the frustration. There were reports of long Black Friday-like lines at Target’s physical stores, with the Associated Press reporting a line of 300 shoppers at a store in East Harlem in the pre-dawn hours, meaning consumers will have little luck at stores too.

“Due to heavy traffic, we experienced slowness to our site, resulting in an inconsistent experience for our guests,” Target spokesman Joshua Thomas told Fortune in an e-mailed statement. “We realize there is an extreme amount of excitement around this collaboration, and we apologize for any disappointment this may have caused our guests.”

Customers might not be the only disappointed ones. Brian Cornell, who became CEO in August, had made deep datacollection and analysis, including intelligence gathered via social media, a cornerstone of his management style, as detailed in a Fortune profile in February.

Target knew demand would be huge for the collection. (There were hundreds of people at a preview event in New York’s Bryant Park last week.) Throw in the intelligence that the company presumably got from social media since the collection was announced in January, along with the big investments it has made in recent years in the website, and the Pulitzer snafu seems all the more confounding and embarrassing.

The problems with the Pulitzer launch are reminiscent, if a bit less dramatic, than Target’s 2011 disaster with the launch of its Missoni collaboration. Back then, heavy demand actually crashed the Target site. Until shortly before that incident, Target.com had been run by Amazon.com AMZN -2.71% and the Missoni fiasco was a wake-up call to the retailer to beef up its e-commerce firepower. And indeed it has, with the company working hard to close the e-commerce gap with big rivals like Wal-Mart Stores WMT -1.72% in recent years.

Under Cornell, e-commerce will continue to be a priority. At an analyst day in early March, Target told Wall Street it planned to spend $1 billion on digital commerce this year.

The Pulitzer launch shows that this is likely to be money well spent.

This article was originally published on Fortune.com

TIME Companies

Alfred Taubman, Inventor of Indoor Shopping Malls, Dies at 91

Al Taubman
Carlos Osorio—AP This Oct. 10, 2008 photo shows shopping mall mogul A. Alfred Taubman in Waterford Township, Mich.

He capitalized on the trend of Americans moving to the suburbs in the 1950s

Alfred Taubman, a real estate developer who invented the concept of indoor suburban shopping malls, has died at 91.

His son, Robert Taubman, the chairman of his father’s company, shared the news on Friday.

“He was so proud of what this wonderful company he founded 65 years ago has accomplished,” Robert Taubman said in a message to the company’s employees. “Tonight, after dinner in his home, a heart attack took him from us, ending what was a full, extraordinary life that touched so many people in so many wonderful ways around the world.”

Alfred Taubman was born to German Jewish immigrants in Michigan in 1924, CNN reports. When he noticed in the 1950s that Americans were moving to the suburbs, he thought they would need centralized places to shop. It was a brilliant innovation. In 2015, Forbes put his net worth at $3.1 billion.

But Taubman’s business life was not always rosy. He bought Sotheby’s auction house in 1983 and was sent to jail for nine months in 2002 after he was convicted of conspiring with Christie’s to fix auction house commission rates. He maintained his innocence.

TIME small businesses

Celebrate Record Store Day With Exclusive Vinyl Releases

BRITAIN-MUSIC-VINYL
Oli Scarff—AFP/Getty Images Joe Blanchard, an employee of the music shop 'Record Collector', arranges their vinyl stock ahead of tomorrow's 'Record Store Day' in Sheffield, Northern England on April 17, 2015.

Get a copy of Elvis' first recording

It’s time to celebrate vinyl.

Saturday is Record Store Day, an annual event that promotes independent record stores. Participating record stores across the world sell a limited supply of records released just for the day.

This year’s selection of 400 exclusive releases include David Bowie’s “Changes,” Bob Dylan’s “The Night We Called It a Day” and “15 Everly Hits” from The Everly Brothers.

Jeff Harrigfeld, co-owner of The Woodstock Music Shop in Woodstock, N.Y. said people were already lining up in front of the store before it opened at 9 a.m., with the first customer showing up at 5:30 a.m. to get first dibs. Harrigfeld’s personal favorite this year is a copy of Elvis’ first recording, a 10-inch record in a paper sleeve, recently purchased at auction by Jack White, lead singer and guitarist for The White Stripes. The record features two songs, “My Happiness” and “That’s When Your Heartaches Begin.”

TIME Economy

Hillary Clinton, Marco Rubio and Looking for Answers on Income Inequality

Will the rhetoric turn into real policy?

Income inequality is clearly going to be the key economic rallying issue of the 2016 presidential campaign. If you have any doubt, consider that both Hillary Clinton and Marco Rubio, who declared their candidacies over the last week, are already speaking out about their positions on the issue. Clinton billed herself as the candidate for the “everyday Americans,” criticizing CEOs’ swollen salaries. She also tweeted: “Every American deserves a fair shot at success. Fast food & child care workers shouldn’t have to march in the streets for living wages.” Meanwhile, Rubio told NPR he wants the Republican Party—which, he said, is portrayed unfairly as “a party that doesn’t care about people who are trying to make it”—to transform into “the champion of the working class.”

So will the rhetoric turn into real policy? Certainly, the pressure will be on Clinton to declare her position on minimum wage—she’s said she wants to have “a conversation” about the topic, but when so many states have already passed hikes, it will be hard for her to argue that there shouldn’t be a higher federal minimum wage. But as I’ve written before, that doesn’t solve the inequality problem. Clinton has said it’s unfair when “CEO are making 300 times the salary of their average workers,” but there’s an uncomfortable truth there, which is that many of the compensation and tax policies that allow those types of salaries were structured by economic advisers from her husband Bill Clinton’s administration—people like Robert Rubin and Larry Summers. Is she taking her own economic marching directions from that camp? Or will she go more toward the left-leaning economic ideas that people like Massachusetts Senator Elizabeth Warren have been pushing for.

Hiring former CFTC chair Gary Gensler as financial head of her campaign is a smart move: He’s the only regulator who’s ever been seriously tough on Wall Street. But I’m betting Clinton will remain a centrist Democrat on the economy, and as Politico reported, her Wall Street backers aren’t too worried.

As for Rubio, whatever he might say about helping the working class, when it comes to real policy, he appears to be mouthing the same old Republican “tax cut, balanced budget” line. I really think the Right is going to have to come up with something beyond trickle-down economic logic, which most of the population now realizes is broken, in order to justify the fact that American wages have been stagnant since 2000, no matter which party was in charge, in the face of many a tax cut. How about some trickle-up ideas, guys?

For more on the economic positions of both candidates and how they might play out in 2016, listen to me discuss the topic with the FT’s Cardiff Garcia, and Bloomberg’s Joe Weisenthal on this week’s WNYC Money Talking.

TIME Media

Verizon Is Making it Easier to Pay for Only the Channels You Actually Want

New bundles let customers pick and choose channels

Verizon is trying to upend the traditional pay-TV model by letting its customers have more control over exactly which channels they purchase.

The telco giant, which serves about 5 million pay-TV customers through its FiOS fiber-optic service, will begin selling a slimmed-down channel package on Sunday. Customers start with a basic package of channels like ABC, Fox, CNN and more. They can then add genre-specific “channel packs,” including a sports pack featuring ESPN, a kids pack featuring Nickelodeon and an entertainment pack featuring TNT, among others.

The basic plan will cost $55 for the mandatory channels (about 35 total) and two channel packs. Additional packs will cost $10 each and can be switched monthly. Verizon will also continue to offer various TV bundles that include Internet access or phone service.

The move comes as competitors like Dish Network are already offering cheaper, slimmed-down cable bundles. Sling TV and HBO are offering content without the need for a cable subscription at all. Apple is also rumored to be working on a smaller cable bundle that would stream channels over the Internet and cost $30 to $40 per month.

 

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