How to Double Your Nest Egg for Retirement - TIME Business

How to Double Your Nest Egg for Retirement

Posted: 13 Sep 2016 09:42 AM PDT

Most savers take an on-again, off-again approach to putting money away. They contribute what they can, when they can, and hope for the best. But consistent saving gets the best results, new research shows. This points up the value of strategies like automatic contributions and paying yourself first.
The Employee Benefit Research Institute examined 24.9 million 401(k) plan accounts at the end of 2014. Of those accounts, 8.8 million had a balance for four consecutive years and 3.5 million had a continuous balance seven years running. These consistent accounts held vastly higher balances than the typical account.

Looking at accounts with a four-year history, EBRI found that 19.5% had a balance of more than $200,000. That compares to just 10.7% of all accounts. Another 16.1% had a balance between $100,000 and $200,000, compared to 9.5% of all accounts.
The trend is even more visible in the seven-year period, which ran from 2007 to 2014 and included the financial crisis. At the end of that period, 26.9% of the consistent accounts had more than $200,000 and 19.3% had between $100,000 and $200,000. That compares to 10.7% and 9.5%, respectively, among all accounts.
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The consistent accounts also had higher median and average balances, EBRI found. For accounts in the four-year group, the average balance in 2014 was $138,553—nearly double the average of all accounts. The median balance among consistent accounts was $56,653—more than three times the median balance of all accounts.
The survey looked at year-end balances over the periods and eliminated any accounts that did not have a balance at each snapshot. Participants may or may not have contributed continuously. But they all maintained a balance and benefited from asset growth over the period. Individual accumulations vary greatly, depending on how much workers and their employers contribute and how much workers borrow or withdraw from their plan.
The study also points up the futility of jumping in and out of the market, trying to time highs and lows, which no one does effectively for long. The 2011-2014 period produced some outsized stock gains, returning 2%, 16%, 32%, and 13%. In that span, the average 401(k) balance among consistent accounts grew an average 17.3% a year and the median balance grew 19.7%.
Average annual returns were lower in the seven-year period including the financial crisis—but not as low as you might imagine, given the market’s 37% collapse in 2008. Over the entire period, the average balance of consistent accounts grew an average 11.2% a year and the median balance grew 15% a year.
Had you avoided the financial collapse, of course, you would have done better. But even having taken the market’s full fury over that tumultuous period, consistent accounts fared well. By staying invested, and sticking to a contribution regimen, consistent accounts bounced back quickly.
These results have little to do with investment selection. Consistent accounts have about two-thirds of assets in stocks, about the same as all accounts, EBRI found. The main differences were steady saving and fewer loans and withdrawals.
Saving through thick and thin over a long period works. Most 401(k) plans make it easy through automatic enrollment, automatic pre-tax contributions and automatic escalation of contributions each year. Don’t opt out. If these features are not available in your plan you can approximate the strategy with automatic contributions to an IRA. In this long-term game, consistency makes the difference.

Americans Are Making More Money, Except for the Ones That Aren’t - TIME Business

Americans Are Making More Money, Except for the Ones That Aren’t

Posted: 13 Sep 2016 10:21 AM PDT

Americans finally got a raise last year. The U.S. Census announced that the median American income rose more than 5% to $56,516. It’s the first significant raise in eight years and the biggest median income jump in 17 years.
The rising income tide lifted many boats. All ages saw an uptick in median income, which is the wage directly in the middle of what Americans make: 50% make more, and 50% make less. It was up among both genders, all four regions of the country and all races, except Asian, whose median income was the highest anyway, at more than $77,000. The reason for the hike, says Trudi J. Renwick, one of the assistant division chiefs at the Census Bureau, was largely the rise in employment.

Moreover, fewer people were living in poverty, with a drop from 14.7% to 13.5% in 2015, making this, says the bureau “the largest decline in poverty rates over the past 16 years.” And the decline in poverty also applied nearly across the board: all ages, all races except Asians and all regions except the Northeast.
But before we start popping the corks and proclaiming that the good times are here again, there were some depressingly stubborn figures emerging from the new report as well. For example, 10% of U.S. households live on less than $13,300 a year. Almost 20% of American children under the age of 18 live in poverty. More than 20% of Hispanics live in poverty and almost a quarter of African Americans. Women are still much more likely to be living in poverty than men.
A family is defined as living in poverty if they make less than what the policy wonks think they need to make to live. So a family of two adults and two kids would be living in poverty if their income was less than $24,036. For a family of three kids and one adult the number is a little less: $24,120. (Of course, that family’s chances of making that much are far less as well.)
In practice, this means that even as America recovers from the economic shocks of 2008, it has not solved some fundamental problems for its poorest citizens. In 2015, more than 43 million Americans, or the equivalent of the population of Argentina, did not have what they needed to get by. Worse, slightly more than 6% of Americans had even more meager means, less than 50% of the poverty level. That figure only went down half a percentage point in the past year.
To put that in real numbers: something like 20 million Americans live in homes that do not have even half of what they need to keep themselves housed and fed. The improving economy simply isn’t reaching far enough.

Brain cannot actually multi-task - CNN

You've got a smartwatch on your wrist, Siri in your palm, and emails notifications popping up on your computer screen all day long. Nope, you're not the only one who's been trying to master multi-tasking all these years.

Yet, the truth is our brains can't actually multi-task. Why? 

Our minds are programmed to think about just one thing at a time. So what we're really doing is switching from one chore to the next and back again ... and it's not helping our productivity. Worse yet: We're not being mindful of why or how we're doing each task, because we're so rushed to move on to the next one.

In fact, we finish about 50 percent less when attempting to tackle a few duties at once, instead of focusing on each one individually, says James Rouse, naturopathic doctor, author of Think Eat Move Thrive and co-founder of Healthy Skoop.

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While experts used to give tips on how to improve multi-tasking skills, that approach to plowing through a to-do list is no longer in vogue. What they advocate works better: Being present in the moment so you can concentrate on one activity -- and one activity only. In other words, single-tasking. (Translation: Putting your phone away, way more often.)

To help you get more done in less time, de-stress and actually enjoy life a little more, we had Dr. Rouse share his tips on becoming a better single-tasker. So stash away your smartphone, turn off your email notifications and read on for the need-to-know. Your challenge: Do not do 101 other things while reading this article.

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7 Productivity Tips for Living in the Moment

1. Start with one change.

Your Brain on Multitasking

Eating lunch while catching up on email; G-chatting while writing a work proposal; scouring social media during a corporate meeting. Are you guilty of these multi-tasking crimes? Don't worry, so is everyone else. What you should do instead is pick one activity and focus on it, knowing that you'll see better results from your efforts. "People think of single tasking as underachieving," says Dr. Rouse. "We have to dispel the myth that if you're only doing one thing you're not doing as much." Putting more energy into one thing really means you'll get more out of it.

Approach your day-to-day differently by choosing one activity that you'll solely concentrate on this week. That could mean eating breakfast mindfully, putting your phone in a drawer while checking emails in the afternoon or simply commuting to work without your normal podcast or book. The more you learn to let go of distractions (even during small tasks), the more you'll be able to expand that streamlined focus into other projects.

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2. Encourage single-tasking with others.

"Multi-tasking is contagious," says Dr. Rouse. "We're social creatures who see people doing three or four things at one time and we want to emulate what we see. So it's hard not to multi-task when you're surrounded by it." To counteract that, eliminate disruptions when you're around other people. If you're out for drinks with a friend or having dinner with your family, put your phones away and turn off the TV so everyone is present for that time. (Seems simple, but do you ever actually do it?)

Having your phone in your pocket or face down on the table doesn't count, either. As soon as you feel the vibration of a text or see your device light up, your mind will instantly go elsewhere. "No matter how much willpower you think you have, you won't be able to resist all the other things going on around you," says Dr. Rouse. "So don't even allow yourself that temptation."

3. Begin your day the right way.

Lots of people sleep with their phone by their bed, but we challenge you to put it across the room. That way, you won't feel obligated to check it before you even put your feet on the ground in the morning. Bringing technology into your sleep space has a way of triggering distractions and stress, Rouse says. Not to mention, it can keep you from getting enough zzz's. Start your day with a light stretch or a deep breath, so you're present right from the start.

4. Take a walk outside.

Study: Multitasking hinders youth social skills

One of the best, most mood-boosting ways to learn to single-task is to get outside more often, says Dr. Rouse. It's not just the endorphins that will instantly make you feel happier. Walk without your phone and you won't be tempted to check emails or respond to texts. Then you'll be able to tune into the sights, smells and noises around you. Don't have time for a mid-day hike? If you've been running around doing what felt like 100 things at once, take a 10-minute stroll outside when you get home from the office. We promise it'll have some pretty great payoffs, and even if you have more work to do, you'll feel much more focused afterward.

5. Schedule time for your toughest task.

Whether you often put off a to-do like writing, drawing or creating lesson plans, set aside the same time every day to tackle it, even if the creative juices aren't flowing. "The greatest way to avoid distraction is to avoid procrastination," says Dr. Rouse. If at noon every day, you sit down and just start typing, your brain will adjust to it. Then, the work will flow better -- without you feeling like you need to check Facebook for hours until a great idea pops in your head.

6. Give someone a squeeze.

Think about the last time you gave someone a really big bear hug. Time seemed to stop in that moment, right? Whenever you need just a few seconds to get grounded and have a moment of Zen, Dr. Rouse suggests snuggling up to someone to bring you back to the present. In fact, hugs release the hormone, oxytocin (aka the "love" or "bonding" hormone), which can help reduce stress.

7. Never stop trying

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We get it, focusing on just one activity at a time can seem impossible. Life often pulls us in different directions, so it's hard to stay straight. But as long as you keep working at single-tasking -- try it with different duties throughout the day or week -- the better you'll get, the more you'll accomplish and you'll feel relaxed and productive. Dr. Rouse's favorite way to look at it: "To the expert's mind, nothing is possible. But to the beginner's mind, everything is." Being a student at single-tasking will make it more enjoyable and easier.