CBS This Morning: Free Credit Freezes

Americans can help fight identity theft by freezing their credit – now free of charge – at the three main credit-monitoring services. This new policy is part of a law called The Economic Growth, Regulatory Relief and Consumer Protection Act. Over a year ago, a hack of one of those credit services, Equifax, affected nearly 150 million people and exposed personal information including names, social security numbers and birth dates. I joined CBS This Morning to discuss the importance of freezing your credit, how to do it, and what to do if you are experiencing fraud.

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My Book, IRA Contributions and Rescuing Retirement

Okay, it’s time for a BIG announcement. My very first book, The Dumb Things Smart People Do with Their Money, is now available for pre-order!!

Do you have a “friend” who is super smart, has a great career, holds a graduate degree, has even saved a chunk of money for retirement, but who keeps making the same dumb mistakes when it comes to money? Is this “friend” you?

The book reveals thirteen costly mistakes you’re probably making right now with your money without even knowing it. Drawing on heartfelt personal stories (yes, money experts screw up, too), I argue that it’s not lack of smarts that causes even the brightest, most accomplished people among us to behave like financial dumb-asses, but simple emotional blind spots.

Click here for all the info on how and where to place your order. Thank you for the support!!

Now on to the latest radio show where we kicked things off with Virginia from Buffalo who is trying to solve a good problem. When is it time to stop contributing to her IRAs? Is there such a thing as having too much saved?

At a time when Congress can’t seem to agree on much, lawmakers are acknowledging that the main retirement savings vehicle, the 401(k), needs some fixing. Before you get too excited, the changes being considered are more like touch ups, rather than a complete renovation.

Early conversations include: requiring plan sponsors to let participants know how much their total savings would translate into monthly income; a repeal of the age limit on IRA contributions; a more liberal approach to pooled 401(k) plans, which would help more small businesses offer retirement benefits to their employees; and the option to use a portion of a tax refund to fund retirement.

While none of these ideas represents a game-changer for retirement savers, it would be the first major enhancement since 2006. But if lawmakers wanted to seek a more radical approach, they would consult with Teresa Ghilarducci and Tony James, co-authors of Rescuing Retirement: A Plan to Guarantee Retirement Security for All Americans, who claim that "The U.S. experiment with 401(k)s and IRAs, launched in the early 1980s, has failed miserably to deliver on its promises."

Ghilarducci, a labor economist and leading expert in retirement security, and James, Executive Vice Chairman of the investment firm Blackstone Group, have a detailed, well-researched and more extreme recommendation for rescuing the U.S. retirement system. It starts with a concept called a “Guaranteed Retirement Account” (“GRA”), which would be offered to every worker, "from Uber drivers to CEOs."

The GRA would be portable, whether you work for a number of different companies or for yourself – and each individual would control his or her account. It would be funded by a minimum 3 percent of salary, half contributed by the worker and half by the employer.

Perhaps the most interesting part of the GRA is that it fixes some of the big problems that are prevalent in current plans, the biggest of which is that right now, saving for retirement is voluntary. The GRA would mandate retirement savings for everyone, including those who work part-time or are self-employed.

If it all sounds too good to be true, I encourage you to check out the book. I was a cynic, but after reading it and interviewing Ghilarducci and James, I’m a convert.

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The Global Impact of the Financial Crisis

When we think back to ten years ago and the events of the financial crisis, such as the fall of Lehman Brothers and the bailout of AIG, it’s easy to only recall what happened in the U.S.

But in reality, the crisis was an enormous global mess, and one that actually started in Europe.

That’s why today we’re joined by Adam Tooze, professor of history at Columbia University and author of Crashed: How a Decade of Financial Crises Changed the World.

Tooze delivers an in-depth reinterpretation of the 2008 economic crisis as a global event that directly led to the shockwaves being felt around the world today.

In September 2008 President George Bush could still describe the financial crisis as an incident local to Wall Street.

In fact it was a period of dramatic global significance that spiraled around the world, from the financial markets of the UK and Europe to the factories and dockyards of Asia, the Middle East, and Latin America, forcing a rearrangement of global governance.

In the United States and Europe, it caused a fundamental reconsideration of capitalist democracy, eventually leading to the war in the Ukraine, the chaos of Greece, Brexit, and the eventual election of Donald Trump.

It was the greatest crisis to have struck Western societies since the end of the Cold War, but was it inevitable? And is it over?

Crashed is a narrative resting on three original themes:

  • The haphazard nature of economic development and the erratic path of debt around the world

  • The unseen way individual countries and regions are linked together in deeply unequal relationships through financial interdependence, investment, politics, and force

  • The ways the financial crisis interacted with the rise of social media, the crisis of middle-class America, the rise of China, and global struggles over fossil fuels

Given this history, what are the prospects for a stable and coherent world order?

“Better Off” is sponsored by Betterment.

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Avoid These 5 Financial Pitfalls

Avoid These 5 Financial Pitfalls

Fall will officially start on September 22nd, which means that you may have already seen Halloween candy displayed along the aisles of your local grocery or drug store. It also means that the kids are back to school and you can now redirect your attention back to your money issues, before the onslaught of the holiday season sucks you in. To help, here are 5 Financial Pitfalls to avoid before the end of the year.

Planning After a Sudden Loss

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We can do all the planning we want in life, but sometimes things just happen, including the sudden loss of a loved one. That's the case with Steve from Cleveland who is trying to navigate things after the loss of his father.

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Target Date Funds and Robots, AI, and Automation

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We're kicking things off this weekend with Susan from Chicago who is in the process of reevaluating her 401(k) and is wondering which target date fund she should be using? Should she even be using a target date fund? Or are there better alternatives? 

Next up was Katrina from Alabama who is trying to game plan for retirement. Up until now almost everything has been saved in traditional 401(k) plans...should she and her husband start using the Roth feature?  

The robots are coming, the robots are coming!!

Okay, so maybe we’re not yet living in a world that looks like the movie Terminator, but it’s safe to say that changes are coming to the workforce as we know it. Robots, artificial intelligence, and driverless cars are no longer things of the distant future. They are with us today and will become increasingly common in coming years, along with virtual reality and digital personal assistants.

That’s what we’re talking about today with Darrell West, a decades-long connection of mine who is vice president and director of Governance Studies and the founding director of the Center for Technology Innovation at the Brookings Institution. In his latest book, The Future of Work: Robots, AI, and Automation, West explores the current state of the workplace, how technological innovation will disrupt it and why government policy needs to change to help workers adapt to it.

If companies need fewer workers due to automation and robotics, what happens to those who once held those jobs and don't have the skills for new jobs? And since many benefits are delivered through employers, how are people outside the workforce for a lengthy period of time going to earn a living and get health care and social benefits?

Throughout the pages of this book, West argues that society needs to rethink the concept of jobs, reconfigure the social contract, move toward a system of lifetime learning, and develop a new kind of politics that can deal with economic dislocations.

West presents a number of proposals to help people deal with the transition from an industrial to a digital economy:

  • Broaden the concept of employment to include volunteering and parenting and pay greater attention to the opportunities for leisure time
  • Workers will need help throughout their lifetimes to acquire new skills and develop new job capabilities
  • Political reforms will be necessary to reduce polarization and restore civility so there can be open and healthy debate about where responsibility lies for economic well-being

It’s a fascinating read about what faces us in the days ahead...a discussion that should take place sooner rather than later.

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The Financial Crisis Ten Years Later

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Where has the time gone? It was ten years ago this week that the U.S. financial system was brought to its knees.

To help us retrace the events of that period, we’re joined today by Gretchen Morgenson, investigative reporter at the Wall Street Journal.

As the financial crisis was unfolding, Morgenson was working for the New York Times, and subsequently co-authored Reckless Endangerment: How Outsized Ambition, Greed, and Corruption Led to Economic Armageddon.

There’s no one more qualified to walk us down memory lane and remind us of just how bad things actually were. In case you’ve forgotten, consider this timeline:

  • 9/15/2008: Lehman Brothers files for Chapter 11 bankruptcy protection. On the same day, Bank of America announced its intent to purchase Merrill Lynch for $50 billion.
  • 9/16/2008: The Federal Reserve Board authorized the Federal Reserve Bank of New York to lend up to $85 billion to AIG under Section 13(3) of the Federal Reserve Act.
  • 9/16/2008: The net asset value of shares in the Reserve Primary Money Fund fell below $1 per share, primarily due to losses on Lehman Brothers commercial paper and medium-term notes. When the Reserve fund “broke the buck,” it caused panic among investors who considered money market accounts nearly the equivalent of bank savings accounts.
  • 9/19/2008: To guard against a run on money market funds, the Treasury Department announced that it would insure up to $50 billion in money-market fund investments at companies that paid a fee to participate in the program. The year long initiative guaranteed that the funds' values would not fall below the $1 a share.
  • 9/20/2008: The Treasury Department submitted draft legislation to Congress for authority to purchase troubled assets (the first version of TARP).
  • 9/21/2008: The Federal Reserve Board approved applications of investment banking companies Goldman Sachs and Morgan Stanley to become bank holding companies.

All this in just one week!! An incredible moment in the history of this country, and it was only ten years ago.

“Better Off” is sponsored by Betterment.

Have a money question? Email us here or call 855-411-JILL.

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Financial Crisis Anniversary 10 Lessons

Financial Crisis Anniversary 10 Lessons

The traditional anniversary gift for a tenth anniversary is tin or aluminum, so to honor the milestone of ten years since the financial crisis, let’s make a pinky swear and vow not to turn a tin ear to what happened and learn some important lessons.