Archive for November 14th, 2012

November 14, 2012

Quick links – Parents burdened by ‘crushing’ student loans; young voters turned out in record numbers; longing for pensions

by Grace

——  ‘Child’s Education, but Parents’ Crushing Loans’  (New York Times)

There are record numbers of student borrowers in financial distress, according to federal data. But millions of parents who have taken out loans to pay for their children’s college education make up a less visible generation in debt. For the most part, these parents did well enough through midlife to take on sizable loans, but some have since fallen on tough times because of the recession, health problems, job loss or lives that took a sudden hard turn.

And unlike the angry students who have recently taken to the streets to protest their indebtedness, most of these parents are too ashamed to draw attention to themselves.

Related:  Paying student loans in your 20s, 30s, and beyond interferes with saving for retirement (Cost of College)

——  College students voted in record numbers with most supporting Obama.

According to Fair Elections, 19 percent of all voters this year were between the ages of 18 and 29, which is a percentage point higher than the turnout of young voters in the 2008 presidential election.

Spaulding said while total number of young voters remained “on-par” with the numbers from 2008, in some states, such as California, the percentage of voters under 30 years old increased by over 5 percent.

He attributes the spike in young voter turnout to the increasing ease of voter registration. Many first time voters are uninformed as to how and where to register which eventually causes them to miss out on voting entirely, he said. Spaulding said the rise of online registration is one of the biggest factors in increasing participation.

Obama support slipped, but remained higher than for Republican candidate.

In some battleground states, tallies show, their ballots were decisive factors in the president’s victory….

… Sixty percent of young people voted for him, compared with 66 percent four years ago….

… As in 2008, the edge young voters gave to Mr. Obama proved decisive in some states. According to Circle, in the battleground states of Florida, Ohio, Pennsylvania, and Virginia, if young people had not voted or if only half of them had supported the president, Mr. Romney would have won.


——  
Employees lust after pensions, but the memory may be better than the reality.

… In several head-to-head questions, researchers asked whether workers would prefer it if their employers offered them a guaranteed retirement benefit (essentially a pension) or other perks. A large plurality – 49% — chose the pension over the opportunity to earn a bigger bonus….

… A generation ago, pension plans were offered to more than four out of five private-sector workers; today it’s fewer than one in three. Pensions have largely been replaced by defined contribution retirement plans like 401(k)s, which were hammered along with stock and bond prices during the financial crisis….

There’s also some evidence workers may be looking at the past with rose colored glasses. Another recent study from the Investment Company Institute, the mutual fund industry’s trade group, argues exactly that. Its findings: In 1980, payments from private pension plans accounted for only about 8% of retirees’ overall income, compared to 53% for social security. (The rest came from other sources, ranging from other forms of government help to dividends on stocks.)

Since most 401(k)s are stocked with mutual funds, of course, the institute has a lot to gain from promoting the current 401(k) system. But the study is still worth note. The explanation: While many workers had access to pension plans thirty years ago, many failed to collect full benefits because of various factors. Switching jobs, for example, tended to reduce employees’ standing under formulas plans used to calculate payouts. The government moved to fix these problems with new laws in the 1970s and ‘80s, but by then the move to 401(k)-type plans was already underway.

“There’s a persistent misconception that there once existed a time when private sector workers typically retired with full pension benefits,” says ICI senior economist Peter Brady. “Many actually received little or nothing.”

Were pensions as great as you remember? (WSJ MarketWatch)

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