MONEY Debt

The Hidden Threat to Your Retirement

More older Americans are approaching their golden years with heavy debt loads.

When Wanda Simpson reached retirement a couple of years ago, the Cleveland mom had an unwelcome companion: Around $25,000 in debt.

Despite a longtime job as a municipal administrator, Simpson wrestled with a combination of a second mortgage and credit-card bills that she racked up thanks to health problems and a generous tendency to help out family members.

“I was very worried, and there were a lot of sleepless nights,” remembers Simpson, 68. “I didn’t want to be a burden on my children, or pass away and leave a lot of debt behind.”

New data reveal that Wanda Simpson has company—and plenty of it.

Indeed, the percentage of older Americans carrying debt has increased markedly in the past couple of decades. Among families headed by those 55 or older, 65.4% are still carrying debt loads, according to the Washington, D.C.-based Employee Benefit Research Institute (EBRI). That is up more than 10 percentage points from 1992, when only 53.8% of such families grappled with debt.

“It’s a two-fold story of higher prevalence of debt, and an uptick in those with a very high level of debt,” says Craig Copeland, EBRI’s senior research associate. “Some people are in real trouble.”

To wit, 9.2% of families headed by older Americans are forking over at least 40% of their income to debt payments. That, too, is up, from 8.5% three years earlier.

The only bright spot in the data? The average debt balance of families headed by those over 55 has actually decreased since 2010, according to EBRI, from $80,564 to $73,211 in 2013.

Still sound high? It is especially so for those heading into reduced earning years, or retiring completely.

The primary culprit, according to Copeland: rising home prices and the longer-term mortgages that result, often leaving seniors with a monthly nut well into their golden years.

Seniors are even dealing with lingering student debt: 706,000 senior households grappled with a record $18.2 billion in student loans in 2013, according to the U.S. Government Accountability Office.

It’s not an easy subject to discuss, since older Americans may be ashamed that they are still dealing with debt after so many years in the workforce. They do not want to feel like a burden on their kids or grandkids, and so keep their financial struggles to themselves.

But financial experts stress that not all debt is automatically bad. A reasonable mortgage locked in at current low rates, in a home where you plan to stay for a long period, can be a very intelligent inflation hedge.

“I always suggest clients consolidate it in the form of good debt, like a mortgage on your primary residence,” says Stephen Doucette, a planner with Proctor Financial in Sherborn, Massachusetts. “You are borrowing against an appreciating asset, you don’t have to worry about inflation increasing the payment, and the interest is deductible.

As long as this debt is a small portion of your net worth, it is okay to play a little arbitrage, especially considering stock market risk, where a sudden decline could leave older investors very vulnerable.

“A retiree who has debt and a retirement account with equity exposure may not have the staying power he or she thinks. The debt is a fixed amount; the retirement account is variable,” says David Haraway, a planner with LPL Financial in Colorado Springs, Colo.

It is important not to halt 401(k) contributions, or drain all other sources of funds, just because you desire to be totally debt-free. Planner Scot Hansen of Shoreview, Minn. has witnessed clients do this, and ironically their good intentions end up damaging years of careful planning.

“But this distribution only created more income to be reported, and more taxes to be paid. Plus it depleted their retirement funding source.” he says.

Instead, take a measured approach. That’s what Wanda Simpson did, slowly chipping away at her debt with the help of the firm Consolidated Credit, while living off her Social Security and pension checks.

The result: She just sent off her final payment.

MONEY Savings

4 Surefire Strategies for Powering Up Your Savings

piggy banks of assorted colors on wood surface
Andy Roberts—Getty Images

You can't count on high investment returns forever. Take control of your future with these savings tips.

Welcome to Day 7 of MONEY’s 10-day Financial Fitness program. You’ve already seen what shape you’re in, figured out what’ll help you stick to your goals, and trimmed the fat from your budget. Today, put that cash to work.

It’s been a great ride. But the bull market that pumped up your 401(k) over the past six years won’t last forever. Even though the stock market is up so far this year, Wall Street prognosticators expect rising interest rates to keep a lid on big gains in 2015. Deutsche Bank, for example, is forecasting a roughly 4% rise in the S&P 500, far below last year’s 11% increase.

Over the next decade, stocks should gain an annualized 7%, while bonds will average 2.5%, according to the latest outlook from Vanguard, the firm’s most subdued projections since 2006.

While you can’t outmuscle the market, you do have one power move at your disposal: ramp up savings.

1. Find Your Saving Target

So how much should you sock away? This year Wade Pfau of the American College launched Retirement-Researcher.com, a site that tests how different savings strategies fare in current economic conditions. He found that households earning $80,000 or more must save 15% of earnings to live a similar lifestyle in their post-work years. While that assumes you’re saving consistently by 35 and retiring at 65, it does include your employer match, so in reality, you may be pitching in only 10% or so.

If you weren’t so on top of it by 35, you have a couple of options: Raise your annual number (Pfau puts it at 23% if you start at age 40) or catch up by saving in bursts. Research firm Hearts & Wallets found that people who boosted savings for an eight-to 10-year period (when mortgages or other big expenses fell away) were able to get back on track for retirement.

2. Think Income

New data show that people save more when they see how their retirement savings translates into monthly income, says Bob Reynolds, head of Putnam Investments. The company found that 75% of people who used its lifetime income analysis tool boosted their savings rate by an average of 25%. To see what your post-work payments will look like, check out Putnam’s calculator (you must be a client to use it) or try the one offered by T. Rowe Price.

3. Take Advantage of Windfalls

Don’t let all your “found money” get sucked into your checking account. Instead, make a point to squirrel away at least a portion of bonuses, savings from cheap gas, FSA reimbursements, and tax refunds. Eight in 10 people get an average refund of $2,800; use it to fund your IRA by the April 15 deadline, says Christine Benz of Morningstar.

4. Free Up Cash

Interest rates remain low. If you’re a refi candidate, you may be able to unlock some money that could be better used. Tom Mingone of Capital Management Group of New York suggests using your refi to pay off higher-rate debt. Say you took a PLUS loan (now fixed at 7.21%, though many borrowers are paying more) for your kid’s tuition: Pay that down.

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TIME Greece

Greece Submits New List of Bailout Reforms

SYRIZA's parliamentary group meeting at the Parliament in Athens
Alexandros Vlachos—EPA Greek Prime Minister Alexis Tsipras and head of Syriza party addresses his party lawmakers during a meeting of their parliamentary group at the Parliament in Athens on Feb. 17, 2015

Greece Submits New List of Bailout Reforms

(ATHENS) — Greece’s left-wing government delivered a list of reforms Tuesday to debt inspectors for final approval of extended rescue loans, officials said.

Prime Minister Alexis Tsipras was already facing dissent within his left-wing Syriza party over claims it is backtracking on its recent election-winning promises to ease budget cuts for the recession-battered Greeks.

Greece and bailout creditors have been in a standoff since Prime Minister Alexis Tsipras’ left-wing Syriza party won general elections last month on a pledge to tear up bailout agreements and seek a massive write off of bailout debts, totaling 240 billion euros ($271 billion).

But they reached a tentative agreement Friday to extend the country’s rescue loan program by four months, avoiding the risk of a Greek default and exit from the euro currency.

The government official said reforms focus on curbing tax evasion, corruption, smuggling and excessive bureaucracy while also addressing poverty caused by a six-year recession.

A Syriza official in Brussels said that “immediate priority” would be given to the settling of overdue debts, the protection of people with mortgage arrears as well as the ending of foreclosures of first residencies.

“Creditors will be skeptical. These are notoriously difficult reforms and, in the case of the latter, usually cost money,” said Megan Greene, chief economist at Manulife Asset Management.

“It will be difficult for the Greek government to provide concrete measures for achieving these goals, and they will almost certainly be unable to achieve much before the next round of negotiations in June.”

Tsipras is also facing pressure within his party.

Several prominent Syriza members have publicly said the party should honor its campaign promises.

Environment Minister Panagiotis Lafazanis, an outspoken bailout critic, lashed lead bailout lender Germany for insisting that Athens stick with austerity measures — an effort he insisted would fail.

“Red lines in negotiations cannot be crossed — that’s why they are red,” he told the weekly Real News. “If the Germans choose to push the issue to a rift, they will bring catastrophic consequences on themselves.”

The dissent could complicate approval of the overhauled reforms in parliament, with Syriza lacking a majority and relying on right-wing coalition partner, the Independent Greeks.

Government spokesman Gavrill Sakelaridis argued Greece is still locked in tough negotiations with lenders.

“No one can be expected to change everything in three weeks. We haven’t got a magic wand,” he told private Skai television.

Nikos Chountis, the deputy foreign minister, said the government had not abandoned its main goal of easing the country’s debt burden with a write off. Any talks on lightening Greece’s bailout burden would only come later — after the loan extension is approved this week, guaranteeing both sides have time to discuss the issue in depth.

“The big negotiation will be on whether the national debt is viable or not, and how it will be dealt with,” he told pro-Syriza Sto Kokkino radio.

Monday’s hurried preparations in Athens found Greeks celebrating a public holiday, the start of lent before Orthodox Christian Easter, on a day marked with picnics and kite flying.

Athens resident Christos Kotsabouyoukos took his young son and daughter to fly their kite on a hill facing the ancient Acropolis, and appeared resigned to more bad news.

“The way we’re living now isn’t nice … Greeks are hungry and they are miserable,” he said. “”If Europe now wants to kick us out, they can kick us out — what can we do?”

MONEY Credit

Getting a Free Credit Score is Now Easier Than Ever

The reason your number is going up or down can still be a mystery, though.

As a Citibank customer, I have been receiving my credit score on my statements since January. In February, my number went down five points, leaving me wondering: What did I do wrong?

There are still some mysteries in the world of credit scores, which financial institutions use to determine whether to give a person a loan and how much to charge for it. But the biggest unknown—what is your score?—has been solved.

While consumers could get their credit reports for years at no charge, their scores were not available, or they had to pay for them. In the past year, however, more than 60 million Americans suddenly were able to get either their FICO score, provided by the Fair Isaac Corp, or their VantageScore, from a system developed by the credit reporting bureaus.

Among the other financial institutions giving out scores each month are Ally, Chase, Bank of America , Barclays, Discover, and USAA.

“I keep this growing list of all of the free credit-related services that are now being given away from websites and credit card issuers,” says John Ulzheimer, president of consumer education at CreditSesame.com. “It’s cool to see the momentum.”

The push for open access came from both market forces and the U.S. government. The hope is that consumers with ready access to their scores will make smarter financial choices, like not paying bills late.

So far, so good. “The anecdotal evidence we’re seeing from both lenders and consumers indicates people who know their FICO Scores tend to develop healthier credit habits than people who don’t know their scores,” says FICO spokesman Jeff Scott.

Discover, which has provided about 10 million scores a month for the past year, has seen customer questions evolve from basics to the minutiae of the many factors, such as your payment history and the amount you owe, that drive the credit score algorithm. The company added a specially trained customer service unit to deal with questions, says Discover President Roger Hochschild.

What consumers generally need to know is that credit data is collected by three reporting agencies—Equifax, TransUnion, and Experian—and there are a range of scores generated. Car dealers may use a slightly different score than mortgage lenders, for instance.

Most people will find that their scores do not shift much, month to month. At Discover, 80% see a move of less than 20 points a month, according to Hochschild.

Also, most volatility is at the high end, above 775, on scores that top out at just above 800. But that in itself is nothing to worry about. “When you move from 790 to 750, you’re still in the great range,” Hochschild says.

A score below 600 is considered bad, while roughly from 620 to 690 is average.

My score probably fluctuated because of some big charges last month. Even though I paid them off in full, it would have lowered my available credit temporarily.

How to Affect Change

Whatever score you see you on your monthly statement will be a good indicator of your general creditworthiness. If it shocks you, you can take action.

Order full copies of your credit reports to see the details. You can get one free report annually.

Do not bother calling the financial institution providing the score, as you are unlikely to get much detailed information, says CreditSesame’s Ulzheimer.

Sometimes a low score is simply a mistake or a matter of one reporting bureau not aligning with the others.

This happened to Kevin Yuann, director of credit cards at Nerdwallet.com, a credit card information website. He found that one bureau did not have a listing of an account the others had, so it gave him a lower score. He was able to get the bank to report the account to the credit bureau.

You will not be able to change an item like a ding for a late payment. But it is useful as a deterrent for the next time.

In fact, Discover’s Hochschild thinks this might be one of the most valuable things about ready access to one’s credit scores: “It’s like knowing your cholesterol.”

 

MONEY Financial Planning

10 Days to Total Financial Fitness

Bench press with gold painted weights
Gregory Reid

Presenting MONEY's 10-day program designed to pump up your finances for 2015. 

When you think about what kind of shape your finances are in nowadays, you may be feeling downright buff. Retirement plan balances are at record highs, home prices are back to pre-recession levels in most parts of the U.S., and the job market is the strongest it’s been since 2006.

No wonder Americans are more optimistic about their finances.

Given that, it’s understandable that some bad habits may be creeping back into your routine. Americans, overall, are slipping into a few: Household debt is at a record high, fueled by an uptick in borrowing for cars and college and more credit card spending. Vanguard reports that investors are taking risks last seen in the pre-crash years of 1999 and 2007.

What’s more, the financial regimen that’s been working well for you of late may not cut it anymore. In this slow-growth, low-interest-rate environment, both stock and bond returns are expected to be below average for several years to come.

To pump up your finances in 2015, you need to shake up your routine. The plan that follows can help you do just that. Every day for the next two weeks, we’ll target-train you for a different financial strength. This program includes seven quick workouts, inspired by the popular exercise plan that takes just seven minutes a day, that will push you to raise your game in no time at all. What are you waiting for?

See What Shape You’re In

Even if you’re a dedicated exerciser, you could be ignoring whole muscle groups, leaving yourself susceptible to injury. For example, 39% of people earning more than $75,000 a year wouldn’t be able to cover a $1,000 unexpected expense from savings, according to a 2014 Bankrate survey. So the first step is to establish your baseline by asking yourself these questions.

How are my vital signs? Tick off the basics: Check your credit, tally up your emergency fund (aim for six months of living expenses), look at how much you are contributing to your retirement plans, and get a handle on how you’re splitting up your savings between stocks and bonds.

Less than half of workers have tried to calculate how much money they’ll need for retirement, EBRI’s 2014 Retirement Confidence Survey found. Take five minutes to use an online tool that will show you if you’re on track, such as the T. Rowe Price Retirement Income Calculator.

What’s my day-to-day routine? The very first thing Rochester, N.Y., CPA David Young does with his clients is go over their spending. Budgeting apps, he notes, “make the invisible credit card charges visible.” As important as the “how much” is the “on what,” says Fred Taylor, president of Northstar Investment Advisors in Denver. Divide your expenses into the essential costs of living, investments in your future (savings, education, a home), and the discretionary spending you have the flexibility to cut.

Am I juicing my finances too much? In other words, how toxic is your borrowing? Your total debt matters. But the kinds of debts you have and the implications for your future are crucial too, says Charles Farrell, author of Your Money Ratios and CEO of Northstar. As a young saver, you shouldn’t be worried about high debts due to a house and education, Farrell says, as long as you can handle the payment, will be debt-free by your sixties, and are using debt only to fund investments in a low-cost or high-earning future, such as a low-maintenance home or new job skills. Farrell suggests in your twenties and thirties you should limit total mortgage debt to less than twice your family income. In your fifties, you should have a mortgage no higher than what you make. At any age, total education debt should not exceed 75% of your pay.

What’s my biggest weak spot? You need to guard against familiar risks, like insufficient insurance. But David Blanchett, head of retirement research for Morning-star, says you should also think about less obvious threats. Will new technology put your livelihood at risk? Are you counting on a pension from a financially shaky firm? Do you live in an area, such as Northern California, where home values hinge on the success of one industry?

Once you know how much progress you’ve made so far and what areas need the most work, you’re ready to get going on your financial fitness plan.

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MONEY

The 5 Funniest ‘Saturday Night Live’ Skits About Money

SATURDAY NIGHT LIVE: WEEKEND UPDATE THURSDAY, (from left): Amy Poehler, Seth Meyers, Kenan Thompson, (Episode 101, aired Oct. 9, 2008), 2008.
Dana Edelson—©NBC/Courtesy Everett Collectio

As the NBC comedy show celebrates 40 seasons on the air, here are MONEY's picks for the best sketches making light of awkward bank ads, the financial crisis, and more.

Over the course of a four-decade run, Saturday Night Live has taken aim at most of the trappings of American financial life—even the things you wouldn’t think were funny, like stock market crashes and consumer debt. In honor of the show’s star-studded anniversary celebration this Sunday, here are MONEY’s favorite SNL sketches about money, spanning nearly all of its 40 years.

1. Fix It! (Parts One and Two)

In these two Weekend Update segments, Kenan Thompson plays Oscar Rogers, a “financial expert” who describes a path out of the 2008 financial crisis.

Best line: “Fix it! It’s a simple three-step process. Step one: Fix! Step two: It! Step three: Fix it! Then repeat steps one through three until it’s all been fixed!”

 

 

In that one phrase, Thompson gives voice to the powerlessness and frustration felt by laid-off workers and pummeled investors worldwide. (We wonder what John Belushi’s samurai stockbroker would have to say about that.)

2. First CitiWide Change Bank

This 1988 commercial parody—featuring Jan Hooks, Kevin Nealon, and Jim Downey—highlights just how unimpressive financial services can be, in an ad for a bank that brags about offering change to customers. And they don’t mean it in the Obama way.

 

Best line: “We are not going to give you change that you don’t want. If you come to us with a hundred-dollar bill, we’re not going to give you two thousand nickels—unless that meets your particular change needs.”

Joking about how weak bank services are would be funnier if it weren’t so true.

3. “Don’t Buy Stuff You Cannot Afford”

Steve Martin and Amy Poehler play a couple in need of a budgeting intervention in this 2006 skit, featuring Chris Parnell as the author of a, shall we say, intuitively titled book about how to control spending.

Best lines:

Parnell: The advice is priceless and the book is free.”
Poehler: “Well, I like the sound of that.”
Martin: “Yeah, we can put it on our credit card!”

If only getting out of debt were as simple as the skit suggests; in reality, paying off loans and gaining financial stability can be hard no matter how smart or hardworking you are. But we’d still pony up for a copy of Stop Buying Stuff magazine.

4. Consumer Probe: Irwin Mainway

This 1976 classic features Candice Bergen as a reporter and Dan Aykroyd as the sunglass-sporting Irwin Mainway, purveyor of such children’s toys as Johnny Switchblade, Mr. Skin Grafter, Doggie Dentist, and Bag o’ Glass.

 

Best lines:

Bergen: “I just don’t understand why you can’t make harmless toys like these wooden alphabet blocks.”
Aykroyd: “You call this harmless? I got a sliver!”

5. Metrocard

Roseanne Barr plays a 24-hour hotline representative for the fictional “Metrocard” credit card in this 1991 sketch, which sends up confessional-style TV ads highlighting service. Phil Hartman plays a seemingly satisfied customer.

Best lines:

Barr: “And then he gets really mad and tells me I’m supposed to help him! You know, like I’m his mom or something. So I say, ‘Why don’t you call home and have somebody wire you the money? Or call your company and tell them the problem? Or, better yet, why don’t you take a personal check out of your checkbook, roll it up real tight, and then cram it!'”

Hartman: “She gave me several options.”

TIME Greece

Greece and Euro Zone Take Modest Steps to Bridge Differences

Irish Prime Minister Enda Kenny, right, speaks with Italian Prime Minister Matteo Renzi, left, and Greek Prime Minister Alexis Tsipras in Brussels Feb. 12, 2015
Michel Euler—AP Irish Prime Minister Enda Kenny, right, speaks with Italian Prime Minister Matteo Renzi, left, and Greek Prime Minister Alexis Tsipras in Brussels Feb. 12, 2015

An imminent deal still appears to be some way off

(BRUSSELS) — Greece and its creditors in the 19-country eurozone took visible, if modest, steps Thursday to bridge their differences over Athens’ demands to lighten the load of its bailout, but an imminent deal appears still to be some way off.

Following weeks of haggling, the two sides made a series of encouraging noises at a summit of European Union leaders and even agreed to start technical discussions to inform a meeting of the eurozone’s finance ministers Monday. Investors are hopeful that a deal will be reached to avoid Greece’s exit from the euro — Greece’s main stock market closed about 6.7 percent higher Thursday.

“Europe always has been geared towards finding compromises,” said German Chancellor Angela Merkel. “Compromises are agreed when the advantages outweigh the disadvantages. Germany is ready for this.”

Merkel has faced a barrage of criticism in Greece for being the key cheerleader of the austerity policies that Greek Prime Minister Alexis Tsipras wants to consign to history. The Greek leader came to power last month on a promise to scrap the country’s bailout in favor of a new, lighter program. Despite the tensions surrounding their meeting, the two leaders exchanged warm greetings, holding each other by their elbows, and chatting amiably, if briefly.

Tsipras expressed his hope that a “mutually acceptable” debt deal can be secured next week at the eurogroup meeting and spoke in language that would likely cheer many of the skeptics in the eurozone.

“The Greek delegation will take part in these meetings with crystal clear proposals and we will try and convince, not blackmail, our partners about our proposals,” he said. “Our program will respect European rules …. we will keep balanced budget, respect the fiscal rules of the EU. We don’t want to go back to era of deficits.”

Tsipras also said his government will propose a set of reforms particularly dealing with the “shortcomings of the Greek state” such as corruption and tax evasion.

“The spirit that prevails in the European Union is a spirit of compromise to the benefit of all the parties,” he said.

In essence, the Greek government has said it won’t extend the current bailout program and its associated austerity and wants to negotiate a new bridge program that will tide Greece over the coming months and prevent a damaging exit from the euro. Tsipras and his left-wing Syriza party blame the current policies of budget austerity for choking Greece’s economy.

Despite a recent modest return to growth, the Greek economy is around 25 percent smaller than it was before the crisis and poverty and unemployment have swelled. Greece is lumbered by huge debts, which stand at around 175 percent of GDP, and it has repayments this year that it will have trouble meeting without outside help.

“The transition to a new program is the main subject of our negotiation,” he said. “The medicine that Greece has taken with this fiscal consolidation has devastated this country. This (the bailout) is over, forget it, it no longer exists.”

Without an agreed new program, Greece faces bankruptcy — and a possible exit from the eurozone, a development that would damage Greece’s economy, at least in the short-term, and throw global financial markets into turmoil.

Earlier, Tsipras following a conversation with Jeroen Dijsselbloem, the head of the eurogroup of finance ministers, agreed to allow representatives from his government to meet Friday with those from the European Commission, European Central Bank and International Monetary Fund to discuss technical matters regarding Greece’s current bailout. The findings will inform Monday’s eurogroup meeting, the last scheduled one before Greece’s bailout program expires after Feb. 28.

Dijsselbloem said he hoped, at the very least, that the discussions will clearly illustrate the issues, the extent of the differences between the two sides and “whether we could adjust the current program, put in the new ambitions and ideas of the Greek government, and still have a viable program to work on over the next months.”

However, he sought to downplay expectations that a deal on Monday would be ready to be signed.

“Let me seriously douse your expectations on that point,” he said. “It really will be difficult. We are politically far apart.”

It seems that Europe’s leaders are open to tweaking the policy requirements of the bailout to deal with the new Greek government’s priorities. However, they will want to see offsetting measures to increases in the minimum wage, say.

“A measure that is annulled must be replaced with another that has the same budgetary, fiscal impact,” said Jean-Claude Juncker, the president of the EU’s executive branch, the Commission. “It is on that basis that we will try to find an agreement over the coming days.”

Many of Greece’s European creditors, particularly Germany, are hesitant to give in to Greece too easily for fear of setting a precedent for countries that run up excessive debts. The 240 billion euros (currently $272 billion) in rescue loans Greece is getting come from taxpayers in other countries.

Many analysts think Europe will once again achieve a deal at the last-minute, with Greece agreeing to a bailout extension provided the required budget austerity measures are eased and Greece implements reforms.

MONEY Love and Money

Why Cupid Is a Tightwad

In the new normal, fiscal prudence is sexier than ripped abs or buns of steel

When it comes to romance, who needs good looks? These days, Cupid is all about smart budgets and a sterling balance sheet, according to the latest findings on love and money.

A whopping 78% of Americans in a relationship say they prefer a partner who is good with money over one who’s physically attractive, according to a recent poll from rewards credit card Citi Double Cash. More than half believe their partner is looking out for their financial future.

Which is not to say Cupid is blind—but the arrow-slinging god of desire may simply be smarting from the Great Recession. Only recently have jobs and wages begun to show much strength. In this new normal, financial survival is sexier than ripped abs or knowing your way around a wine list. So it is that 52% of Americans expect their valentine this year to order takeout, not take them out, according to a love and money study from Ally Financial.

The Ally study also found that 55% are attracted to potential mates with strong budgeting and saving strategies. Specifically, 21% are attracted to those who pay as they go and avoid debt of any kind, while 18% are attracted to those who know how to chase down and seize a bargain. Just 3% are attracted to a suitor who appreciates the finer things and has a high credit card limit.

These findings help explain the rise of a dating site like creditscoredating.com, which seeks to address the concerns of the fiscally prudent lovelorn.

Yet love and money will always have an oil and water quality. People in a relationship are more than twice as likely to say they are the saver and that their mate is the spender in the union, according to a poll from SunTrust. About half agree that they and their partner have different spending habits. And among those who cop to relationship stress, the top cause is financial behavior.

The good news is that two-thirds say they do not have serious recurring arguments with their partner about money, Ally found. So this Valentine’s Day why not go cheap? The data suggest your date will adore you for it.

Read next: This is the sexiest financial habit

MONEY Aging

Are You Mentally Fit Enough to Plan for Retirement?

Book with money in it
iStock

People's ability to make sound financial decisions declines with age—even as their confidence about it doesn't.

In this era of “self-directed” retirement (no pensions, you make all the investment choices) postponing making a real plan poses a particular risk to future security. Not only are the logistics of planning hard enough—when to collect Social Security, how to budget for expenses, what to do with savings—but the decline in cognition that accompanies normal aging has a measurable negative impact on the ability to make sound financial decisions.

In 2010, researchers at the Center for Retirement Research at Boston College tested the financial literacy of a group of older people in the Chicago area by asking them questions such as the relationship between bond prices and interest rates, the value of paying off credit card debt, and the historical differences between stock and bond returns. They then retested the group every year and found that, among some participants, even while their knowledge of personal finance and investing was eroding, they remained just as confident about managing “day to day financial matters.” And perhaps because they remained so confident, more than half of them retained primary responsibility for handling their finances as their ability to do so was becoming increasingly compromised. (Other studies have shown that financial literacy scores decline by about 1 percentage point a year after age 60. )

One particular area of concern, and one that is often overlooked when discussing the future income of retirees, is the level of debt that older Americans are taking on near or at retirement. Debt later in life is problematic for obvious reasons: Payments can strain your income at a point where active earning years are ending; debt offsets asset accumulation, which you may be forced to reduce in order to service the debt; and finally, leveraging large housing debt in particular may leave older Americans with less resources to finance an adequate retirement.

Recent data from the Employee Benefit Research Institute (EBRI) shows that the percentage of American families with heads ages 55 or older that had debt increased from 63.2% in 2010 to 65.4% in 2013, with housing debt as the major component. Moreover, the percentage of families with debt payments greater than 40% of their income also increased, from 8.5% in 2010 to 9.2% in 2013.

Just because you have debt does not in and of itself mean you’re in financial danger. Nor does growing older automatically throw you into the kind of cognitive decline that could seriously impair your financial decision-making. But now that individuals are fully responsible for their own retirement security, part of that responsibility must certainly include the possibility that time may leave you less rather than more equipped to make the right decisions. As the saying goes: hope for the best but plan for the worst.

Konigsberg is the author of The Truth About Grief, a contributor to the anthology Money Changes Everything, and a director at Arden Asset Management. The views expressed are solely her own.

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