MONEY Phones

Sprint cuts rates in half to win AT&T, Verizon customers

The offer is the latest attempt by the third-largest carrier to compete with its larger rivals.

Sprint’s latest plan to compete with its two larger rivals? Woo AT&T and Verizon customers by offering to cut their phone bills in half if they switch to Sprint.

The Overland Park, Kansas company announced that deal on Tuesday, promising “unlimited talk and text” and a matched data allowance at half the rate of what current Verizon and AT&T customers are currently paying for their monthly plans. Billing it as “The Cut Your Bill in Half Event,” Sprint also promised to pay up to $350 toward customers’ early termination fees or installment bill balances in an offer that will officially launch on Friday.

Sprint CEO Marcelo Claure called it “the best value in wireless” in the company’s announcement. “It’s as simple as this: Bring Sprint your Verizon or AT&T bill along with your phone and we’ll cut your rate plan in half. That’s a 50 percent savings on your rate plan every month. And this great deal is not just a promotion. This will be the customer’s ongoing price,” Claure said in a statement.

The limited-time offer is a sign that Sprint, the nation’s third-largest mobile carrier, now sees price competition as the best way to battle AT&T and Verizon. Earlier this year, Sprint and its parent company — Japan’s SoftBank — backed off a $32 billion planto purchase smaller carrier T-Mobile US after the two sides failed to reach a deal that could have created a larger mobile company better suited to take on AT&T and Verizon.

Interestingly, Sprint’s new rate offer does not extend to T-Mobile customers.

MONEY retirement planning

Money Makeover: Married 20-Somethings With $135,000 in Debt—And Roommates

The Liebhards
Julian Dufort

A young couple gets some advice on how to save for the future even while saddled with loads of student debt.

Samantha and Travis Liebhard, both 24, met as college freshmen, married right after graduating in 2012, and quickly moved to Minneapolis so that Travis could start his graduate pharmacy program at the University of Minnesota—Twin Cities.

They face intimidating debts: Travis has racked up $135,000 in student loans and expects to incur another $60,000 before graduation. Barely making ends meet this year, the couple came up with an idea: Why not cut their $1,500 monthly rent in half by giving up their big two-bedroom apartment and finding room­mates to share a similarly priced four-bedroom unit?

So in September, two of Travis’s classmates moved in with the Liebhards. Now Samantha’s $40,000 salary in her public relations job and Travis’s $8,000 pay from a part-time hospital job seem like enough to get by on. Samantha complains about dishes in the sink and clothes left on the floor, but the four roommates get along well. “It’s helping me prepare to have children one day,” she jokes.

Retirement seems far away, given the Liebhards’ more urgent financial concerns, starting with the student debt. The couple also want to have kids and buy a house, but Travis won’t be making a full pharmacist’s salary of about $120,000 for another four years; after his expected graduation in 2016 comes a two-year residency, paying about $40,000 annually.

The Liebhards don’t know whether to save for re­tirement now or just focus on their debt. So far the couple have only $2,000 in the bank and $3,200 in retirement accounts. Samantha wants to get serious about saving for retirement, but Travis isn’t sure: “It’s hard for me to even think about retirement until we can real­ly do something about it.”

Helping the Liebhards navigate their options is Sophia Bera of Gen Y Planning in Minneapolis. The key to success, she says, is to have a reasonable spending plan and take incremental steps.

The Advice

Save in moderation: Given how much Travis owes, plus the 6.8% interest rate on most of his loans, repaying debt should indeed be the couple’s top priority, says Bera. So for now Samantha should only bump up her 4% 401(k) contribution to 6%—enough to get her full match. Her 401(k) portfolio—half in a 2020 target-date fund and half in a large-cap U.S. stock fund—is too conservative for her age and not properly diversified, says Bera. Her plan’s 2050 target-date fund, which is 80% in stocks, would be a better choice.

Bank some cash: Because the Liebhards have little saved for emergencies, Bera says they should put Travis’s $800 monthly pay­check­—the amount they are saving in rent—into a savings account; the goal is for that to reach $10,000, or three months of their net pay. Next, they need to budget Samantha’s $2,600 monthly take-home pay. Bera suggests $800 for the fixed costs of rent and phones, and $1,500 to be divided between discretionary spending and monthly essentials such as groceries.

Attack the debt: The $300 left over in Bera’s proposed budget should go toward paying down interest on Travis’s debt, even though he can defer repayment until after his residency; his current loans are accruing interest amounting to about $7,000 annually. Their payments will likely qualify the couple for an annual $2,500 student loan interest tax deduction over the next few years. Once Travis finishes his residency, Bera says, he should be able to pay off his loans in 10 years at the rate of $2,300 a month, while maxing out his 401(k) contributions ($17,500 is the current annual limit).

Though the Liebhards needn’t have roommates for­ever, says Bera, they should hold off on buying a home. “If you have student loans the size of a mortgage, you should avoid taking out a mortgage,” she says. Samantha is not so sure. “We can wait a few years after Travis graduates,” she says, “but once we have a child who’s able to walk, we’d like to have a place bigger than an apartment.”

More Retirement Money Makeovers:
4 Kids, 2 Jobs, No Time to Plan
30 Years Old and Already Falling Behind

MONEY retirement planning

Retirement Makeover: 30 Years Old, and Already Falling Behind

When she turned 30, Chianti Lomax had an epiphany: Her salary and savings weren't enough to buy a home or start a family. MONEY paired her with a financial expert for help with a plan.

Chianti Lomax grew up poor in Greenville, S.C., raised by a single mother who supported her four children by holding several jobs at once. Inspired by her mom, Lomax worked her way through high school and college; today, the Alexandria, Va., resident makes $83,000 plus bonuses as a management consultant.

But turning 30 last December, Lomax had an epi­phany: Her career and her 401(k)—now worth $35,000 —weren’t enough to achieve her long-term goals: raising a family and buying a house in the rural South.

Her biggest problem, she realized, was her spending. So she downsized from the $1,200-a-month one-bedroom apartment she rented to a $950 studio, canceled her cable, got a free gym membership by teaching a Zumba class, and gave up the 2010 Honda she leased in favor of a 2004 Acura she paid for in cash. With those savings, she doubled her 401(k) contribution to 6% to get her full employer match.

And yet, nearly a year later, Lomax has only $400 in the bank, along with $12,000 in student loans. Having gone as far as she can by herself, Lomax wants advice. As she puts it, “How can I find more ways to save and make my money grow?”

Marcio Silveira of Pavlov Financial Planning in Arlington, Va., says Lomax is doing many things right, including avoiding credit card debt. Spending, however, remains her weakness. Lomax estimates that she spends $500 a month on extras like weekend meals with friends and $5 nonfat caramel macchiatos, but Silveira, studying her cash flow, says it’s probably more like $700. “That money could be put to far better use,” he says.

The Advice

Track the cash: Silveira says Lomax should log her spending with a free online service like Mint (also available as a smartphone app). That will make her more careful about flashing her debit card, he says, and give her the hard data she needs to create a budget. Lomax should cut her discretionary spending, he thinks, by $500 a month. Can a young, single person really socialize on $50 a week? Silveira says yes, given that Lomax cooks for herself most evenings and is busy with volunteer work. Lomax thinks $75 is more doable. “But I’d like to shoot for $50,” she says. “I like challenging myself.”

Setting More Aside infographic
MONEY

Automate savings: Saving money is easier when it’s not in front of you, says Silveira. He advises Lomax to open a Roth IRA and set up an automatic transfer of $200 a month from her checking account, adding in any year-end bonus to reach the current annual Roth contribution limit of $5,500, and putting all the cash into a low-risk short-term Treasury bond fund.

Initially, says Silveira, the Roth will be an emergency fund. Lomax can withdraw contributions tax-free, but will be less tempted to pull money out for everyday expenses than if the money were in a bank account. Once Lomax has $12,000 in the Roth, she should continue saving in a bank account and gradually reallocate the Roth to a stock- heavy retirement mix. Starting the emergency fund in a Roth, says Silveira, has the bonus of getting Lomax in the habit of saving for retirement outside of her 401(k).

Ramp it up: Lomax should increase her 401(k) contribution to 8% immediately and then again to 10% in January—a $140-a-month increase each time. Doing this in two steps, says Silveira, will make the transition easier. Under Silveira’s plan, Lomax will be setting aside 23% of her salary. She won’t be able to save that much upon starting a family or buying a house, he says, but setting aside so much right now will give her retirement savings many years to compound.

Read next:
12 Ways to Stop Wasting Money and Take Control of Your Stuff
Retirement Makeover: 4 Kids, 2 Jobs, No Time to Plan

MONEY Kids and Money

4 Costly Money Mistakes You’re Making With Your Kids

parents cheering softball players
Yellow Dog Productions—Getty Images

Help your kids become financially literate.

When you’re a parent, it’s easy to get caught up in day-to-day money issues: Which brand of milk is a better value? Is Old Navy having a school uniform sale? How much lunch money is left in the kids’ accounts? But parenting is ultimately about the long view, with the goal of raising capable, self-sufficient adults. Dealing with daily details, we sometimes neglect important money issues that can have a huge impact on our kids — and on our finances — as they prepare for college and adult life.

The mistake: Not talking enough about money

Too many parents don’t talk about money with their kids at all. Others skirt topics they don’t know much about, like investing and debt. Parents are the main source of money information for children, but 74% of parents are reluctant to discuss family finances with their kids, according to the 2014 T. Rowe Price Parents, Kids, and Money Survey. That’s too bad, because ignorance about money can set your kids up to make bad decisions — and eventually pass those bad habits on to your grandkids.

The solution: Make financial literacy a family value

In her book, Do I Look Like an ATM?: A Parent’s Guide to Raising Financially Responsible African American Children, Sabrina Lamb details “the business of your family household.” Lamb, founder and CEO of WorldofMoney.org, says all families should work together on five financial topics: learning, earning, saving, investing, and donating time or funds to causes you value. She recommends a daily diet of business news, occasional meetings between the kids, your banker, and other financial advisors, and support of your older kids’ entrepreneurial goals.

The mistake: Believing in the “Scholarship Fairy”

A lot of parents pin their hopes on pixie dust when it comes to funding their kids’ college educations. Eight in 10 parents think their kids will get scholarships. In the real world, less than one in 10 U.S. students receive private-sector scholarship money — an average of $2,000 apiece, according to FinAid.org.

Even more unrealistic is the myth that great grades and high test scores will lead to a full scholarship. The truth, per scholarship portal ScholarshipExperts.com, is there are many more 4.0-GPA students than there are full-tuition awards, and only one-third of one percent (0.3%) of all U.S. college students earn a full-ride scholarship each year. The time to learn this hard truth is now, not when college acceptance letters start arriving.

The solution: Save something now (or accept that you can’t)

Accurate, real-time salaries for thousands of careers.

There’s a considerable body of literature out there on the merits of 529s, trusts, and other college savings options. Don’t let the details distract you from the real issue, which is that if you want to help finance your child’s higher education, you must save regularly, starting now.

If there’s no money to save, be honest with your kids about it. You can start educating them about ways to finance college through loans and cut costs with community college transfer credit and placement tests. It’s perfectly acceptable to expect your kids to take responsibility for their own higher learning as long as you prepare them properly to face that reality.

The mistake: “Investing” in extracurricular activities

Everyone’s heard about overscheduled kids with too many after-school activities. Not as much is said about the huge dent extracurriculars can put in your budget — hundreds or thousands of dollars each year for lessons, league fees, uniforms, and more. If you’re sacrificing because you think these activities will pay off when your child gets an athletic scholarship, remember that the Scholarship Fairy is rarely seen. The odds of any particular student getting even a small athletic scholarship at a Division 1 school aren’t significantly better than the odds of a student getting a full-ride academic scholarship.

The solution: Treat extracurricular activities as extras

If your child loves soccer, piano, or hip-hop and you have the time and money to spare, that’s ideal. But if it’s a choice between paying for extras and saving for college, save for college. Find cheaper after-school options for now, and don’t apologize for making that decision.

The mistake: Not teaching your kids to negotiate

There’s a big distinction between a child who’s been taught how to speak up when appropriate and one who’s been trained to be passive in the face of authority. The kids who know how to negotiate tend to earn more money as adults, even when they’re doing the same jobs as those who keep quiet. Salary.com found last year that workers who negotiated a raise every three years earned a million more dollars over the course of their careers than workers who simply accepted whatever they were offered.

The solution: Teach your kids how to deal

Show your kids the ins and outs of deal making through trading games, doing some haggling at garage sales, and expecting them to keep their word. You can find specific age-appropriate suggestions here.

By talking about money and business a little each day, being realistic about college planning, and giving your kids the skills to advocate for themselves, you’ll give them long-term advantages when it comes to understanding and earning money. That’s a valuable legacy to pass from one generation to the next.

MONEY retirement planning

Five Takeaways on Retirement from the Midterm Elections

With Republicans controlling Congress, expect a push to cut Social Social and Medicare benefits—and maybe new ideas to encourage savings.

Retirement policy wasn’t on the ballot in last week’s midterm elections. But the new political landscape could threaten the retirement security of middle-class households.

With Republicans in full control of Congress, expect efforts to cut Social Security and Medicare benefits. And more Republican-controlled statehouses mean more efforts to curtail state and local workers’ pension plans. One positive note: Congress and the White House could find common ground on some promising ideas to encourage retirement saving.

Here are five policy areas to watch that could affect your retirement security.

SOCIAL SECURITY

The midterm results boost the odds that Social Security cuts will be in the mix if the brinkmanship over the federal debt ceiling or budget resumes.

Social Security does need reform. Its retirement trust fund will be exhausted in 2034, when revenue from payroll taxes would cover just 77% of benefits. Meanwhile, the disability program will be able to pay full benefits only through 2016. If Congress doesn’t act, 9 million disabled people will see their benefits cut by 20%.

Republicans have advocated higher retirement ages, less generous cost-of-living increases and means-testing of benefits. Some Democrats have fought for expansion of benefits and revenue for the program but haven’t been backed by President Obama or congressional party leaders.

How deeply could benefits be slashed? If previous conservative proposals are any guide, anywhere from 15% to 20%, with young people taking the biggest hit.

MEDICARE

The GOP has pushed Medicare reform plans that would “voucherize” the program, replacing defined benefits with a set amount of cash that beneficiaries could use to shop for coverage in a Medicare exchange. That would raise premiums for seniors in traditional Medicare by 50% in 2020 over current projections, according to the Congressional Budget Office.

AFFORDABLE CARE ACT

The ACA isn’t a retirement program, but it has helped older Americans by beefing up Medicare benefits covering older people who had trouble obtaining insurance and were too young for Medicare. This year the rate of uninsured 50- to 64-year-old Americans fell from 14% to 11%, according to the Commonwealth Fund.

The percentage would be smaller if the U.S. Supreme Court hadn’t given states an opt-out option on Medicaid—it has been expanded in only 27 states and the District of Columbia. Meanwhile, congressional Republicans continue to threaten funding, and the ACA faces a new Supreme Court threat. If the court rules that tax subsidies on marketplace premiums can’t be offered on the federal exchange, exchange insurance marketplaces will be on life support in all but 13 states with their own exchanges.

PENSIONS

Republicans will control 31 governors’ offices and 30 state legislatures, the most since the 1920s. That means we can expect the attack on public sector pension benefits to accelerate.

The National Association of State Retirement Administrators and the Center for State & Local Government Excellence reviewed pension reforms by 29 states this year and found reductions in annual benefits ranged from 1.2% (Pennsylvania) to 20% (Alabama); the average across all states was 7.5%.

RETIREMENT SAVING

A grand bargain on the federal budget could limit pre-tax contributions to 401(k) accounts, an idea floated regularly in tax reform discussions. And ideas aimed at helping lower-income households save for retirement could gain ground. The Obama Administration has asked Congress to create a national automatic IRA option and is rolling out a limited version called the MyRA.

Meanwhile, Senator Marco Rubio (R-Florida) has called for a government-sponsored 401(k)-style account for Americans who don’t have a plan at work. He would like to open up the federal Thrift Savings Plan to private-sector workers. That’s attractive because the TSP boasts low costs, a short and easy-to-understand set of investment choices and options to convert savings into an annuity stream at retirement.

Another idea I like: the “baby Roth.” The plan’s architect projects that an initial contribution of $500 to an infant’s Roth IRA, with subsequent annual contributions of $250, would grow to $131,800 at age 65, versus $35,300 for an account started at age 25.

It’s disappointing that few candidates campaigned on ideas that would help the middle class build retirement security. Democrats could have boasted about how the ACA is helping older Americans. And polls show that expanding Social Security and keeping Medicare strong are winning issues across partisan divides and demographic groups.

MONEY 401(k)s

The Big Flaws in Your 401(k), and How to Fix Them

Falling Short book cover

Badly designed 401(k) plans are a key reason Americans are headed towards a retirement crisis, a new book explains. Here are three moves that can help.

Every week seems to bring a new study with more scary data about the Americans’ looming retirement crisis—and it’s all too easy to tune out. Don’t. As a sobering new book, Falling Short, explains, the crisis is real and getting worse. And if you want to preserve your chances of a comfortable retirement, it’s time to take action.

One of the most critical problems is the flawed 401(k) plan, which is failing workers just as they need more help than ever. “The dream of the 401(k) has not matched the reality,” says co-author Charles Ellis. “It’s turned out to be a bad idea to ask people to become investing experts—most aren’t, and they don’t want to be.”

When it comes to money management, Ellis has plenty of perspective on what works and what doesn’t. Now 77, he wrote the investing classic Winning the Loser’s Game and founded the well-known financial consulting firm Greenwich Associates. His co-authors are Alicia Munnell, a prominent retirement expert who heads the Center for Retirement Research at Boston College, and Andrew Eschtruth, the center’s associate director.

What’s wrong with the 401(k)? For basic behavioral reasons, workers consistently fail to take full advantage of their plans. Most enroll, or are auto-enrolled, at a low initial savings rate, often just 3% of pay— and they stay at that level, since few plans automatically increase workers’ contributions. Many employees borrow money from their plans, or simply cash out when they change jobs, which further erodes their retirement security. Even if investors are up to the task of money management, their 401(k)s may hamper their efforts. Many plans have limited investing menus, few index funds, and all too often saddle workers with high costs.

When you add it up, investor mismanagement, along with 401(k) design and implementation flaws, have cost Americans a big chunk of their retirement savings, according to a recent Center for Retirement Research study. Among working households headed by a 55- to 64-year-old, the median retirement savings—both 401(k)s and IRAs—is just $100,000. By contrast, if 401(k)s worked well, the median amount would have been $373,000, or $273,000 more. As things stand now, half of Americans are at risk of not being able to maintain their standard of living in retirement, according to the center’s research.

Can the 401(k) be fixed? Yes, the authors say, if employers adopt reforms such as auto enrollment, a higher automatic contribution rate, and the use of low-cost index funds. But even those changes won’t end the retirement crisis—after all, only half of private sector workers have an employer-sponsored retirement plan. Moreover, Americans face other economic challenges, including funding Social Security, increased longevity, and rising health care costs.

To address these problems, authors discuss possible policy changes, such as automatic IRAs for small businesses and proposals for a new national retirement plan. Still, major reforms are unlikely to happen soon. Meanwhile, there’s a lot you can do now to improve your odds of a comfortable retirement. The authors highlight these three moves to get you started:

Aim to save 14%: The best way to ensure that you actually save is to make the process automatic. That’s why few people consistently put away money without help from a company retirement plan. If you save 14% of your income each year, starting at age 35, you can expect to retire comfortably at age 67, the authors’ research shows. Start saving at age 25, and put away 12%, and you may be able to retire at 65. If you get a 401(k) matching contribution, that can help your reach your goal.

Choose low-cost index funds. One of the smartest ways to pump up your savings is to lower your investment fees—after all, each dollar you pay in costs reduces your return. Opt for index funds and ETFs, which typically charge just 0.2% or less. By contrast, actively managed stock funds often cost 1.4% or more, and odds are, they will lag their benchmarks.

Adjust your goals to match reality. You 401(k) account isn’t something you can set and forget. Make sure you’re saving enough, and that your investments still match your risk tolerance and goals—a lot can change in your life over two or more decades. The good news is that you can find plenty of free online calculators, both inside and outside your plan, to help you stay on course.

If you’re behind in your savings, consider working a few years longer if you can. By delaying retirement, you give yourself the opportunity to save more, and your portfolio has more time to grow. Just as important, each year that you defer your Social Security claim between the ages of 62 and 70 will boost the size of your benefit by 8% a year. “You get 76% more at age 70 than you will at age 62,” says Ellis. If working till 70 isn’t your idea of an dream retirement, then you have plenty of incentive to save even more now.

More on 401(k)s:
Why Millennials are flocking to 401(k)s in record numbers
Why your 401(k) may only return 4%
This Nobel economist nails what’s really wrong with your 401(k)

MONEY retirement planning

Why Detroit’s Pension Deal Is a Warning to Retirement Savers

The Renaissance Center city skyline and the Detroit River viewed from Milliken State Park, Detroit, Michigan.
In Detroit retirees face steep pension cuts, which raises big questions about the financial security of workers elsewhere. Ian Dagnall—Alamy

The Motor City is counting on the market to keep its pension promises—a lot like under-saved 401(k) plan participants.

Guaranteed lifetime income has become the obsession of retirees, policymakers and the financial industry. Yet as the public pension debacle in bankrupt Detroit shows, we may never find a solution that completely eliminates the risk of your money running out.

The judge in Detroit’s closely watched proceedings said the recent deal the city cut with its retirees bordered on “miraculous,” as reported in The New York Times. That may be. But the deal still left the city’s 32,000 current and future retirees with diminished benefits and no certainty that they won’t be asked to give up more down the road. Their fate is largely in the hands of the markets—as is the case for millions of workers saving in 401(k) plans, and even many of those still covered by a private pension.

The problem is that there is only so much money we are willing to throw at the retirement savings crisis, an issue that has been exacerbated by an economy that until recently was growing far below potential. Every leg of the retirement stool is underfunded, including private pensions, though they are in the best shape. Many public pensions are in deep trouble. Social Security is on course for a funding shortfall. Personal savings are abysmal.

When government revenue or corporate profits or personal income are too low to allow for setting aside enough money for the future, we can only hope that the markets bail us out. In Detroit’s case, pension managers are counting on average annual returns of 6.75% for the next 10 years. That might happen, and it’s a lower expected rate of return than many public pensions are counting on. But given that stocks have already had a nice run, and that the bond portion of any portfolio will almost certainly come up far short of that mark, it’s probably an optimistic target. That means the city will likely have to raise taxes or cut pension benefits at some later date.

Private pensions face similar math, which is why many companies have frozen their plans or dropped them. Still, those that remain are generally on more solid footing. Profits have been strong and regulators hold companies to a higher funding standard. But by some estimates such stalwarts as IBM, Caterpillar and Dow Chemical will need to pay extra attention to their pension funding in coming years. The equation became more difficult recently, now that the Society of Actuaries has updated its mortality tables, which added a couple years to the life expectancy of both men and women at age 65.

Individuals in self-directed savings plans, such as 401(k)s, face their own funding problems. Workers may not have done the retirement income math but, like many pension managers, they haven’t been putting away the money they’ll need, while hoping for strong market returns to make it all work out. If they stay invested, and stocks keep chugging higher, they may be fine. Otherwise they will have to save more going forward or plan on spending less later—the do-it-yourself equivalent of raising taxes or having their benefits cut.

The good news for individuals is that you can act now on your own—you don’t have to stand by while a committee of actuaries and accountants blows smoke around the issue and kicks the problem further down the road. Steps you can take immediately include saving at least 10% of everything you make. Aim for 15% if your kids are gone and the mortgage is paid. Make sure you get the full company match in your 401(k) and automatically escalate contributions each year.

Young workers, especially, need to act now. Those just starting out are far less likely to have a private pension and more likely to suffer from future Social Security cuts. Many seem to have got the message. Millennials expect employment income and personal savings to account for 58% of their retirement income, Bank of America Merrill Lynch found. That compares to just 35% for boomers.

But even with greater savings, guaranteed lifetime income can remain elusive. As life expectancies have stretched, and interest rates have remained low for nearly a generation, fixed-income annuities have become relatively expensive. Even the so-called safe withdrawal rate of 4% per year now strikes some experts as too high for peace of mind. The push is on to make 401(k) savings more easily convertible into lifetime income. That would help because the big insurers that stand behind the promise of lifetime income are a lot more reliable than a city like Detroit.

Read Next: Retirees Risk Blowing IRA Deadline and Paying Huge Penalties

MONEY Savings

Is Outliving Your Savings a Fate Worse Than Death?

Most people are worried about running short of cash in retirement, surveys show. But with a little planning, and a bit more saving, you can ease those anxieties.

When faced with the prospect of outliving their money, most people might toss and turn at night or obsess about where to slash their budgets.

Others have a more extreme reaction: wishing for early death.

“I can always put a bag over my head when the money runs out” was what Jeannine Hines’ husband told her when she asked what he planned to do if their cash ran out before they died.

“He would rather die than be left penniless,” says Hines, a 58-year-old piano teacher from Maryville, Tennessee.

Her husband has company. A new survey from Wells Fargo shows 22% of people say they would rather die early than not have enough cash to live comfortably in retirement.

Other surveys bear those numbers out. One by financial-services company Allianz of people in their late 40s found 77% worried more about outliving their money in retirement than death itself.

Of that survey’s respondents, those who are married with dependents are even more terrified, with 82% saying that running out of cash is a more chilling prospect than death.

“These are pretty sobering statistics,” says Joe Ready, director of Wells Fargo Institutional Retirement in Charlotte, North Carolina. “It speaks to the overwhelming stress people have about money.”

Financial planners like Rose Swanger of Advise Finance in Knoxville, Tennessee, hear about these extreme money fears all the time.

But Swanger says she does not believe people have an actual death wish; they just do not know what they will do if they outlive their cash. “So they get scared, and freeze up, and become irrational,” she says.

In one respect, collective despair is simply an acknowledgement of how much—or rather, how little—we are saving.

The Wells Fargo survey also discovered that 41% of those in their 50s are not putting anything aside for retirement, and 48% admit they will not have enough money to survive in their golden years.

Experts suggest taking a deep breath and refusing to let money fears overwhelm you. Social Security awaits in old age, and friends and family to help get you through lean times. And you can deploy multiple strategies to help prevent a penniless future.

SETTING GOALS

Instead of throwing up your hands, set a goal that is actually achievable

“Save a small amount, then a little more, and once it starts to add up, you will see your levels of stress and worry start to lower,” says Michael Norton, a Harvard Business School professor and co-author of the book “Happy Money: The Science of Smarter Spending.”

There are other ways to gain control of the situation.

“You may have to delay retirement by a couple of years, you may have to find ways to supplement your income, and you may have to reduce your standard of living both now and in retirement,” says Wells Fargo’s Ready. “All of those are ways of focusing on the reality of where you’re at, instead of just giving in to despair.”

But is this death wish that emerges in surveys really about us? Dig a little deeper into people’s anxieties about outliving their money, and you often find out it is all about the kids.

Parents feel like failures if they cannot leave an inheritance, and they certainly do not want to become financial burdens on their adult children.

“To a lot of people that’s a fate worse than dying,” says Norton.

So instead of worrying yourself into paralysis, let go of all that parental stress and anxiety.

You do not have to leave behind a huge estate; the kids will be fine. And if you have to lean on your family in old age? Hey, it is what humans have done for eons.

Our retirement challenges may be formidable, but they are certainly no reason to hope that death arrives any sooner than it has to.

More about retirement:

How much money will I need to save for retirement?

Can I afford to retire?

How should I invest my retirement money?

MONEY Savings

How Blended Families Can Overcome Their Savings Obstacles

THE BRADY BUNCH
Unlike TV's "The Brady Bunch," real-life blended families often face big financial challenges. Courtesy Everett Collection

Remarrying brings special savings hurdles and leaves blended families further behind, new research shows.

The nuclear family went out of fashion 40 years ago, and what has replaced it is a far cry from TV’s blissfully blended Brady Bunch. Modern families include more same-sex, single-parent and multi-generational make-ups—and, new research shows, these households have special savings obstacles.

Today, just 19% of U.S. households are married heterosexual couples with young children vs. 40% in 1970, according to Census Bureau data. The rise of non-traditional families is reshaping household economics and, it seems, deepening the nation’s savings crisis.

Blended families, where parents have remarried with young children, are the biggest segment of the new-look household. About 75% of divorced people remarry. In roughly 43% of all marriages it is the second time around for at least one member of the couple, and 65% of remarriages involve children from a previous marriage. In such families, the average level of savings is $158,600, vs. $264,300 for traditional families, according to a new Love Family Money study from Allianz.

Only 46% of blended families believe they are on track towards their financial goals vs. 60% of traditional households. Some 55% of blended families live paycheck to paycheck vs. 41% of traditional families; and 30% of blended families say they are not saving any money vs. 20% of traditional families.

Behind this struggle, in many cases, is the financial stress of a broken household, Allianz found. Parents in blended families are more likely to say that they or their partner brought financial baggage to the marriage, and a third cite insufficient monetary support from their ex as a major problem keeping them from saving. They often find it difficult to merge their financial resources and plans, which means they tend to wind up with multiple, and frequently competing, goals within the household.

Some 35% say they and their partner have different financial priorities that are difficult to navigate. They are almost twice as likely to feel less aligned as a family than those in a traditional household. Yet there is some good news. Perhaps because they have a hard time planning as a unit, blended families are more likely to talk about money and take steps to teach their children to budget and save, Allianz found.

How can blended families overcome their struggles? With the rise of non-traditional households more financial firms are weighing in. It’s not enough to talk to the kids about money. Couples need to talk to each other and develop mutual goals and a plan for getting there. Agree on a fair distribution of responsibility. To get on the right path to your financial goals, start is by finding ways to trim your major expenses, then make a budget that leaves room for saving. If you can’t free up much cash to put away now, start small and increase that amount with future raises. It’s also important to take a careful look at wills and legacy planning, since you want to protect your family financially as long as possible.

More on marriage and money:

Retirement makeover: 4 kids, 2 jobs and no time to plan

7 ways to stop fighting about money and grow richer, together

Common money problems; uncommonly smart solutions

MONEY Banking

Why the Right Bank for You Might Not Be a Bank

Postage stamp printed in USA, dedicated to the 50th Anniversary of Credit Union Act.
Sergey Komarov-Kohl—Alamy

The best place to park your cash might be a credit union—a nonprofit financial cooperative that serves a select population.

MONEY recently released the results of its 2014 Best Banks survey, which awarded 11 banks honors for low fees, high interest rates and other customer-friendly policies. But it’s possible the best place for you to park your cash might not be on that list.

Rather than a bank, you may be better off with credit union—a nonprofit financial cooperative that serves a select population, like workers at a specific company or residents of a certain county.

Credit unions tend to offer better terms than banks. According to WalletHub, they pay an average 0.23% on $10,000 in savings—twice the average of banks in our study—and 73% offer free checking.

Also, credit unions are known for having more personal customer service, owing to the fact that they are owned by members and are often small (some have just one branch).

Because of their size and membership requirements, credit unions weren’t included in MONEY’s survey, but you can use these steps to find yourself a winner:

Look under rocks.

“We’re pretty sure everybody in the country is eligible to join at least one credit union—and probably several,” says Bill Hampel of the Credit Union National Association.

Start at asmarterchoice.org and nerdwallet.com/credit-union. Also check with your town, employer, alma mater, and religious institution. And ask family which ones they belong to.

Do a smell test.

Compare the yields to the averages at MONEY’s best midsize banks—at least 0.15% on checking and 0.56% on savings. (Online banks pay more but don’t offer the comparable personal attention.)

Also find out if the credit union has fee-free accounts, and if not, check the minimum-balance requirements to make sure you’d avoid a maintenance fee.

Get out the ruler.

Small credit unions often have just one branch. But about half belong to the CO-OP network, which offers you -access to more than 5,000 shared branches and almost 30,000 ATMs.

To avoid costly fees when you get cash, see if your best option has its own or partner ATMs near your home and work. If you’ll use teller service, make sure the branch is easily accessible.

Of course, CUNA reports that 88% of credit union members are offered mobile apps and 55% allow check deposits via smartphone—so you might not need a teller after all.

See MONEY’s 2014 list of the Best Banks in America

Try out MONEY’s Bank Matchmaker tool to find the best bank for you

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