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Budgeting Covid Financial Literacy Retirement

Pandemic Economic Pain Hits Women Harder

Too many Americans are struggling with the economic impact of Covid-19. This on top of the pre-existing social conditions that negatively impact women, is making things even grimmer for their retirement, as is explored in this New York Times article.


Unequal job losses now will translate into smaller nest eggs and Social Security benefits down the road.

By Mark Miller

During the first months of the pandemic, Leah Tyrrell found that she could pull off a balancing act: working in sales for a San Diego clothing maker and caring for her three young daughters at home. Her hours had been reduced, and working remotely in the morning left her time to be with the children the rest of the day.

“At the time, I thought I could tackle it,” Ms. Tyrrell said.That changed in Augustwhen her employer started asking people to return full time. Her company was flexible, but something had to give — and since her husband was bringing home a bigger paycheck, she quit work to help her girls, ages 9, 8 and 5, with online school.

“It was a very tough decision, but we just decided that, especially having a third child in kindergarten on the computer, I would need to sit and guide her through what the teacher was talking about,” she said.

Retirement is still on the distant horizon for Ms. Tyrrell, 43, but she hopes the long-term damage to her nest egg will be minimal. She participated in her company 401(k) plan, which had a matching contribution, and aims to resume saving when she goes back to work after the pandemic recedes.

“When I do go back, I hope it will be with a company that provides a match, but I’ll definitely lose at least a year of any kind of savings,” she said.

The hit to her retirement resources — and to those of other women in her shoes — could be considerably deeper.

Policy experts have long acknowledged a gender gap in retirement security. Women tend to earn less than men, and they are more likely to take time off from work to care for children or elderly parents. Even brief career interruptions diminish wage growth, retirement savings and Social Security benefits, which are determined by wage history. Women also tend to outlive men, needing to stretch resources over more years. In particular, they face higher health care expenses in retirement. 

Read the full article here:

www.nytimes.com/2020/12/11/business/women-retirement-covid-social-security.html

Categories
Budgeting Financial Literacy

Understanding Cost Basis

Understanding your cost basis can save you pretty penny or three. Here’s a useful little primer on what cost basis is, and why it’s useful to understand, from the folks at Schwab.


Save on Taxes: Know Your Cost Basis

by www.schwab.com

Many people dislike thinking about taxes so much that they ignore the topic until filing season is upon them. Unfortunately, waiting until the last minute to deal with tax matters can lead to missed opportunities to potentially reduce your tax bill. 

Investors who include tax planning as part of their investing strategy could potentially see significant tax benefits over the long run, says Hayden Adams, CPA, director of tax and financial planning at the Schwab Center for Financial Research.

You shouldn’t just be thinking about capital gains and losses. Savvy investors know how to manage the so-called “cost basis” and holding periods of their investments to help reduce gains that are subject to taxes. Knowing your cost basis can be a valuable tool.

What is cost basis?

Simply put, your cost basis is what you paid for an investment, including brokerage fees, “loads” and any other trading cost—and it can be adjusted for corporate actions such as mergers, stock splits and dividend payments. This matters because your capital gain (or loss) will be the difference between the cost basis and the price at which you sell your securities. This cost is pretty easy to calculate—if you don’t reinvest dividends or dollar-cost average when you invest.

Read the full article here: 

https://www.schwab.com/resource-center/insights/content/save-on-taxes-know-your-cost-basis