Monday, October 22, 2012

More Americans Worry about Financing Retirement

Adults in Their Late 30s Most Concerned

Despite a slowly improving economy and a three-year-old stock market rebound, Americans today are more worried about their retirement finances than they were at the end of the Great Recession in 2009, according to a nationally representative survey of 2,508 adults conducted by the Pew Research Center.

About four-in-ten adults (38%) say they are “not too” or “not at all” confident that they will have enough income and assets for their retirement,¹ up from 25% in a Pew Research survey conducted in late February and March of 2009.

An analysis of these surveys also shows that concerns about retirement financing are now more heavily concentrated among younger and middle-aged adults than among those closer to retirement age—a major shift in the pattern that had prevailed at the end of the recession.

In 2009 it was “Gloomy Boomers” in their mid-50s who were the most worried that they would outlive their retirement nest eggs. Today, retirement worries peak among adults in their late 30s—many of whom are the older sons and daughters of the Baby Boom generation. According to a Pew Research analysis of Federal Reserve Board data, this is also the age group that has suffered the steepest losses in household wealth in recent years.

The new Pew Research survey finds that among adults between the ages of 36 and 40, 53% say they are either “not too” or “not at all” confident that their income and assets will last through retirement. In contrast, only about a third (34%) of those ages 60 to 64 express similar concerns, as do a somewhat smaller share (27%) of those 18 to 22 years old.

These findings stand in sharp contrast to the age pattern that emerged when the same question was asked in a Pew Research survey conducted in 2009. In that poll it was Baby Boomers between the ages of 51 and 55 who were the most concerned that their money would not last through their retirement years. Only 18% of those 36 to 40 years old were similarly worried they would fall short financially after they retire—a third of the share who express a similar concern today.

A companion Pew Research analysis of data collected by the Federal Reserve Board in its Survey of Consumer Finances suggests a reason that retirement concerns have surged among adults in their late 30s and early 40s.

The median net worth of this group has fallen at a far greater rate than for any other age group both in the past 10 years and since the beginning of the Great Recession.

Led by declines in home value, the median wealth² of adults ages 35 to 44 was 56% lower (in inflation-adjusted dollars) in 2010 that it had been for their same-aged counterparts in 2001— the steepest decline for any age group during that decade and more than double the rate of loss among those ages 55 to 64 (22%). (Household wealth is the sum of all assets, such as property cars, stocks and retirement accounts, minus the sum of all debts, such as mortgage, credit card debt and car loans.)

Expressed in dollars, the median wealth of those in the 35-to-44 age group in 2010 was $56,029 less than the median wealth that their same-aged counterparts had in 2000. In contrast, those ages 45 to 54 and 55 to 64 have lost about $50,000. With fewer assets to begin with, the median wealth of adults younger than 35 fell by a total of $5,270 between 2001 and 2010. The median wealth of those 65 and older increased slightly—making them the only age group whose net worth grew over what it had been for their same-aged counterparts a decade ago.

Retirement Worries Increase

Overall, a larger proportion of Americans are worried about their retirement finances now than in the final months of the Great Recession in 2009. The share of adults saying they are “not too” or “not at all” confident that they will have enough income and assets to last through their retirement years has grown from 25% in 2009 to 38% in the latest Pew Research poll.

In addition, surveys conducted by the Gallup Organization over a longer time period suggest that these concerns have grown steadily in the past decade, a trend that began before the housing market collapsed or the economy fell into recession.

According to Gallup, the percentage of adults who fear they will not have enough money to live “comfortably” in retirement has grown from 32% in 2002 to 66% last year. During that same period. the share who worry that they do not have enough money to retire increased by 12 percentage points, from 54% to 66%.

The Demographics of Retirement Anxiety

While many Americans worry about retirement finances, there are some differences among demographic groups.

For example, college graduates are much more likely than those who have a high school diploma or less to express confidence in their retirement finances (71% vs. 53%). Among those who attended college but do not have a bachelor’s degree, six-in-ten are sure that they will be financially prepared for retirement.

Those with household incomes of $100,000 or more also are significantly more confident than those earning less than $50,000 that they will have the financial resources to live on in retirement (79% vs. 51%).

Change Since 2009

Across most demographic groups, Americans are less confident now than just three years ago that they will have enough financial resources to last through their retirement years.

The decline in confidence is greatest among Americans with less education, those with annual family incomes between $30,000 and $74,999, and adults in their late 30s and early 40s.

Among those with a high school education or less schooling, the proportion confident about retirement finances declined by 14 percentage points to 53% between 2009 and 2012 . In contrast, concern fell by 9 percentage points among college graduates and 10 points among those who attended college but did not graduate with a bachelor’s degree.

The pattern was less uniform among income groups. Confidence dropped the least among adults with the highest and lowest incomes, while the pattern is mixed among those in the middle-income ranges.

Confidence about retirement finances declined by 9 percentage points among adults in families making at least $100,000 a year and by the same share among those earning less than $30,000.

In contrast, confidence fell the most (19 percentage points, to 51%) among those earning $30,000 to $49,999 and by 14 points in families with incomes of $75,000 to $99,999. At the same time, the proportion of those making $50,000 to $74,999 who are confident about their retirement nest eggs declined by 11 points.

Retirement Worries and Age

Concerns about retirement finances increased in every age group in the past three years but grew the most among adults 35 to 44, the latest Pew Research survey found. Older and younger adults express the most confidence that they will have enough financial resources in retirement, while middle-aged adults expressed the least confidence.

But in a marked change from the 2009 survey, adults in their late 30s and early 40s are now the least confident that they will outlive their money.

Among this younger age group, the proportion who are “not too” or “not at all” confident they will have enough to live on in retirement has more than doubled, from 20% in 2009 to 49% in the latest poll. Three years ago, adults in this age group were the least likely, along with retirement-age adults (19%), to express doubts about their retirement finances. Now adults ages 35 to 44 rank ahead of every other age group in terms of their concern about retirement finances.

A Pew Research survey conducted in September 2011 produced results that closely mirrored those in the latest poll. In that survey, 51% of respondents ages 35 to 44 were concerned about retirement finances, compared with 41% of 45- to 54-year-olds and 37% of those ages 55 to 64.

Again, the oldest and youngest respondents were the least concerned. Only about a quarter of those older than 65 (25%) and younger than 35 (27%) were worried.

The Late-30s Spike

To better understand the relationship between age and retirement worries, Pew analysts created a moving average indicator to more precisely track changes in retirement confidence over the age range.³

Since the results of the 2012 and 2011 polls were so similar, data on the retirement confidence question were combined to produce a sample of 4,511 cases.

The graph on the preceding page tracks the rise and fall of retirement worries from ages 18 to 75 in the 2011-2012 surveys. The second trend line plots retirement concerns over the age range from the 2009 Pew survey.

Overall, worries about retirement finances in the 2011-2012 surveys are comparatively low among those in their early 20s. For example, only about 27% of those ages 18 to 22 say they are not too or not at all confident they will have enough to live on in retirement.

But concerns begin to rise among adults in their early 30s and spike among those a few years older. Among adults 36 to 40, about half—53%—are not confident about their retirement finances. These worries slowly ebb among individuals closer to retirement age, dropping to about a third (34%) of those 60 to 64 and falling even further among older adults well into retirement age.

A very different pattern emerges when the moving average is plotted using 2009 data. Retirement concerns peak among those ages 51 to 55; among this group, about four-in-ten (42%) lack confidence that they have enough money for retirement.

In a further departure from the most recent pattern, adults 34 to 38 years old were the least likely of any age group in 2009 (13%) to express concerns about their retirement finances—roughly the same age group that expressed the most anxiety three years later.

Declines in Wealth

Why are thirty-somethings suddenly the most worried about their retirement finances? Federal data on changes in household wealth suggest one answer. In the past decade, households headed by adults ages 35 to 44 have lost the most wealth of any age group, and nearly all of those losses have occurred since the Great Recession began in 2007.

In the past 10 years, median wealth of households headed by adults 35 to 44 years old has dropped from $99,727 in 2001 to $43,698 in 2010, a 56% decline.

In contrast median wealth fell by 29% among households headed by adults ages 45 to 54 and declined by 22% among those 55 to 64 years old.

Households headed by adults 35 and younger lost 35% of their wealth, though their initial holdings—and subsequent losses—are significantly smaller than those in other age groups, dropping from $14,864 in 2001 to $9,594 in 2010.

Wealth increased in only one group in the past decade. Among households headed by adults 65 and older, wealth increased by 2%.

Not only did adults in their mid-30s and early 40s lose the largest percentage of their wealth in the past ten years, but they also lost the most money.

In actual dollars, the median wealth of those 35 to 44 fell by $56,029 from 2001 to 2010. Among those 55 to 64, wealth declined by slightly more than $50,000, while adults ages 45 t0 54 lost slightly less.

Friday, October 19, 2012

Gold. What's new, what to expect.

Gold held up better than stocks, with the GLD down 1.1% on Friday, while the Dow lost 1.5% and Nasdaq tumbled 2.2%, dragged down by Google, and new weakness in Apple. Gold has experienced a remarkable bull market run from $250 an ounce in 2001 to $1,900 an ounce last summer, has not had an easy time of it since.
Three times it has plunged as much as 19%, and rallied back, only to run into resistance each time at $1,800. It is potentially doing so again.

That’s probably puzzling investors who have been seeing so many big-name analysts and fund-managers become very bullish for gold, with reasoning that seems sound.
The latest Reuters poll shows precious metals analysts have become more bullish for gold and silver than they have been in several months.

Even technical analysis was backing the bullish outlook. My technical indicators triggered a sell signal on February 19, almost exactly at that peak, but had me and my subscribers back on a buy signal in mid-August and back into a 20% position in the gold etf GLD.

The case for gold, at least from the fundamental side, still sounds bullish.
As Ray Dalio, chief investment officer at Bridgewater Associates, the world’s largest macro hedge fund recently told CNBC viewers, “We have a situation where there is too much debt, which leads to central banks printing money, which is bullish for gold.”

Other analysts add that fears of the looming ‘fiscal cliff’ in the U.S., and possibility that rating agencies will downgrade the credit rating of the U.S. again, are positives for gold over the next several months.

There is also the expectation that the Fed’s latest QE3 program will be inflationary, and gold is the traditional hedge against inflation.

Hats off too Sony! Good call...

You may have feared the consumer confusion that would come out of the Consumer Electronics Association's decision to rebrand 4K as Ultra High-Definition, and now Sony is doing very little to allay those concerns. The company has just sent us word that it "lauds the CEA's efforts," but will continue using "4K" for its current products and will brand future devices as "4K Ultra High-Definition (4K UHD)."

According to the statement, Sony is using its own branding in order to "ensure clarity for consumers and delineate between today’s and tomorrow’s technology" — a clear nod to the similarities beween Ultra High-Definition and the current High-Definition standard. Thankfully, Sony's nomenclature still includes the UHD branding, but we wouldn't be surprised if consumers think 4K UHD is better than UHD alone, even if they both adhere to the same standard. Now the wait commences to see which other manufacturers will come up with their own branding for the future of high-resolution televisions. Full statement below.

Just a quick note to let you know that as a leader at the forefront of new display technology such as HD, 3D and beyond, Sony lauds the CEA’s efforts to come up with a common language to describe the next generation high-definition technology. However, to ensure clarity for consumers and delineate between today’s and tomorrow’s technology, Sony will continue to use the 4K moniker for its products and will market its future products as 4K ultra high-definition (4K UHD).

Is the U.S. economy really on the rebound. Stats say yes. Will Wall Street care?

A railway engineer in Wilmington, California. American employers say there is a lack of skills in the US workforce to fill highly technical positions. Photograph: Rene Macura/Associated Press

The latest US employment data has confirmed that the American economy is on the path to recovery after the recession of 2008-2009, despite the slowdown engulfing other G20 nations.

Indeed, the pace of private sector job growth has been much stronger in this recovery than after the 2001 recession and is comparable to the resurgence after the 1990-1991 slump.

In the last 31 months, private sector employment rose by 5.2 million and the unemployment rate is now below 8% for the first time in nearly four years. But it is still more than two percentage points above the long-run value that most economists view as normal when the economy is operating near its potential.

Moreover, the number of long-term unemployed (27 weeks or longer) is about 40% of the total – the lowest share since 2009 but still far higher than at any time since the 1930s Great Depression and about double what it would be in a normal labour market. So the US labour market, while healing, is still far from where it should be.

That is partly because the job losses since the 2008 financial crisis were so large – twice as large as any recession since the Great Depression. In terms of US economic history, what is abnormal is not the pace of private sector job growth since the 2008-2009 recession ended, but rather the length and depth of the recession itself.

The downturn was a distinctive balance-sheet recession that caused sizeable declines in household wealth and necessitated painful deleveraging. Consistent with recoveries from such recessions, demand has grown slowly, despite unprecedented fiscal and monetary stimulus, and that explains why the unemployment rate remains high. Indeed, businesses cite uncertainty about the strength of demand, not uncertainty about regulation or taxation, as the main factor holding back job creation.

Public sector demand has also contracted, owing to state and local governments' deteriorating budgets. As a result, public employment, which usually rises during recoveries, has been a major contributor to high unemployment during the last three years. Despite a modest uptick in the last three months, government employment is 569,000 below its June 2009 level – a 30-year low as a share of the adult civilian population.

According to Hamilton Project calculations, if this share were at its 1980-2012 average of about 9.6% (it was actually higher between 2001 and 2007), there would be about 1.4 million more public sector jobs and the unemployment rate would be around 6.9%.

Recent reports suggest that there are more than three million unfilled job openings, and about 49% of employers say that they have difficulty filling positions, especially in information technology, engineering, and skilled trades. This has fanned speculation that a "mismatch" between workers' skills and employers' needs is a significant factor behind the elevated unemployment rate.

But there is scant evidence to support this view. The relationship between the unemployment rate and the job vacancy rate is consistent with patterns in previous recoveries. Nor is there anything unusual about the size of mismatches between job openings and worker availability by industry.

Such industrial mismatches become larger during recessions, reflecting greater churn in the labour market as workers move between shrinking and expanding sectors; but they decline as the economy recovers. This pattern also characterises the current recovery, and recent data suggest that mismatches between the demand and supply of labour by industry are back to pre-recession levels.

But, as the US economy recovers, technological change is accelerating, fuelling demand for more skills at a time when the workforce's educational attainment levels have plateaued. This is the real skills gap that existed before the 2008 recession – and it is getting worse over time.

The gap manifests itself in much higher unemployment rates for high school-educated workers than for college-educated workers at every stage of the business cycle. The gap also shows up in significant – and rising – inequality between the earnings of high school-educated workers and those with a college degree or higher.

Earnings gains have been especially strong for those with tertiary degrees, while the real wages of high school-educated workers, especially men, have fallen sharply. It is becoming increasingly difficult for workers with low levels of educational attainment to find high-paying jobs in any sector, even when the economy is operating near full capacity.

The US was the world leader in high school and college graduation rates for much of the twentieth century. Today it ranks in the middle of the OECD countries.

A major factor behind that relative decline has been the US school system's failure to ensure high-quality education for disadvantaged Americans, particularly children from poor, minority, and immigrant households. According to the most recent census, about one-quarter of children under the age of six live in poverty. They are less likely to have access to early childhood programmes that prepare them for school, and are more likely to attend schools that have high student/teacher ratios and that cannot attract and retain skilled teachers.

As a result of these and other problems, the average American secondary school student receives inadequate preparation in core subjects such as writing, mathematics, and analytical reasoning, which in turn reduces college enrolment and completion rates. The US experience is consistent with OECD evidence that students from countries with greater income inequality score lower on academic achievement tests. And a recent study by McKinsey suggests that the gaps in educational opportunity and attainment by income impose the equivalent of a permanent recession of 3-5% of GDP on the US economy.

To address the skills gap, the US must boost the educational attainment of current and future workers. That means investing more in education at all levels – in early childhood education programmes, elementary and secondary schools, community colleges, trade school programs for specific jobs in specific sectors, and financial aid for higher education. Above all, it means addressing the income disparities in educational opportunity and attainment.

Online socializing. Is it safe or private? Can It be?

Dear Lifehacker,

After the Violentacrez debacle, I've realized that it's easy for people to find out who I am online. I'm not doing anything too egregious, but I'd just rather people on Reddit and other forums not know who I am. Is there any way I can be anonymous while still being a part of a community?
Sincerely,
Anon Plussed

Dear AP,
Being anonymous online means different things to different people. A lot of people are just worried about advertisers and other companies tracking them. Extensions like Adblock Plus, Ghostery, and Do Not Track Plus, can help with that. But if you're part of an online forum, you're facing a different kind of problem: anonymity from other users. That's a lot harder to keep.

Go Anonymous with Secure Browsing and Fake Names
We've talked about creating a fake identity to stay anonymous online before and the process is pretty simple. First off, start with all the anonymous browsing tips above. You also want to use a VPN to create a private network, proxy server, or browse the internet with Tor to completely anonymize your browsing. You can also take it a step further and use an operating system specifically designed for anonymous browsing.

Once that's set up, you need to create a fake identity for every web site you go to. If you use the same handle across multiple places, someone is bound to figure you out. To do this, create a disposable email address for every site you sign up for, and never log into those services without taking the steps mentioned above.

Being anonymous also means you can't really share that much information about your real life. To a point, this is great—but that means you have to always watch what you're sharing with others. Revealing your work, hometown, voice, or accomplishments means you're opening yourself up for someone to figure out who you are. Even a simple picture might reveal where you live or work, so be careful.

What You're Missing When You Go Anonymous in a Community
Even with fake IDs, VPNs, and disposable email addresses, there's always the chance you'll slip up and be found. But more so than that, going anonymous means you're missing out on some of the best parts of online communities: actually meeting people in real life and sharing anything you've done.

Most major online communities have meetups of some kind (we've been known to do it once and a while too), and it's part of the allure of being in an online community. At some point, you're bound to meet someone at a convention, meetup, or even just talk on the phone. Personally, I've played countless games online with people from the Something Awful forums, and it's always incredibly interesting to hear them interact with each other. They're not even my friends and I could still recognize them on the street if I heard them talking.

Anonymity also means you miss out on some of the benefits of using your real identity. As we've mentioned before, writing reviews of products can net you free stuff, but you have to use your real name to benefit. Being anonymous also makes it difficult to share anything you've made—whether it's a DIY project on Instructables, a video on YouTube, a song on Bandcamp, or whatever else.

It ends up boiling down to figuring out exactly what you want from an online community. If you're simply looking for a sounding board to unleash all your thoughts without worrying about judgement, anonymous is probably the way to go, and it's not hard to do. However, if you want to build something larger from an online community, it might be best to be somewhat transparent with your identity, and practice the same restraint for conversations as you do in real life.

That said, just because you want anonymity on one forum doesn't mean you can't use your real identity elsewhere. Just make sure you choose to represent yourself accordingly, and follow the precautions above every time you sign on.

Google search becoming less relevant? Here's a new perspective.

Here's Why Google Could Disappear in Five Years

CNBC.com | October 19, 2012

Google may be on its way out as the dominant player in search, according to one analyst — and could even "disappear" in as little as five to eight years if the competitive pressures that ultimately claimed other search giants start to take root.

In the wake of a surprisingly weak earnings report, Eric Jackson, Ironfire capital founder and managing member, said Google Google [ GOOG 678.06 -16.94 (-2.44%) ] could easily find itself fending off the woes that eventually took hold at embattled Yahoo! [ YHOO 15.935 -0.065 (-0.41%) ].

"They could disappear in five to eight years and disappear in the sense that Yahoo used to be the king of search. Now, for all intents and purposes, Yahoo has disappeared," Jackson said Thursday on CNBC's "Squawk on the Street".

The primary reason Google may lose its search dominance is because the company is facing the same mobile problem as Facebook [ FB 18.92 -0.055 (-0.29%) ], Jackson said. (Read More: Google Has the Same Mobile-Ad Problem as Facebook)

"If Facebook saw a deceleration in their sales and their growth lead to a halving of their stock price...why wouldn't it also be something that is very negative for Google as it continues to play out?" he said.

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