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Archive: Economy Watch

Congress Asks Bush to Help Seniors on 401(k) Withdrawals

President Bush on Tuesday signed legislation that temporarily suspends a tax penalty for senior citizens who do not take a minimum withdrawal from their 401(k)'s and other retirement accounts in 2009. But dozens of Republican and Democratic members of Congress are asking the President to help senior citizens whose retirement savings plans have been hit by market losses this year. Spearheaded by Rep. Spencer Bachus (R-AL) and Rep. Rodney Frelinghuysen (R-NJ), 61 members of Congress on Friday asked the President to direct Secretary of the Treasury Henry Paulson to waive the so-called required minimum distribution rule for 2008. Retirees older...

 

By Nancy Trejos | December 24, 2008; 07:00 AM ET | Comments (15)

Senator Asks Credit Card Companies to Comply with New Rules

U.S. Senator Robert Menendez (D-NJ) is calling on the nation's credit card companies to comply with federal regulators' new rules against "unfair and deceptive practices" sooner than they have to. Last week, the Federal Reserve, the Office of Thrift Supervision and the National Credit Union Administration finalized a new set of regulations that would ban such practices as raising interest rates on existing balances unless a payment was more than 30 days late, charging late fees without giving the borrower a reasonable amount of time to pay and applying payments so that debts with higher interest rates are repaid last....

 

By Nancy Trejos | December 23, 2008; 07:00 AM ET | Comments (1)

FDIC Criticizes Banks' Overdraft Fees

Banks received an estimated $1.97 billion in overdraft protection fees in 2006, representing 74 percent of the $2.66 billion in service charges on deposit accounts that they reported, according to a Federal Deposit Insurance Corporation study released this week. In fact, total overdraft fee income made up about 6 percent of the total net operating revenues earned by banks. The findings confirmed that overdraft programs have become lucrative for banks even as consumer advocates have fought against them because they typically come with significant fees. Consumer advocates, as well as the Federal Reserve, have especially criticized banks for automatically enrolling...

 

By Nancy Trejos | December 5, 2008; 07:00 AM ET | Comments (1)

The Cost of Christmas Carols

You think your budget is tight this Christmas. Just think how the poor folks suffered in 1780. That is the year the lyrics to the popular "Twelve Days of Christmas" were written, at least according to Wikipedia. Among the many presents that my poor true love had to dig up were five golden rings, seven lords a-leaping and 12 drummers drumming -- and this was way before Life Took Visa! In today's dollars, the full set of items would cost you $21,080.10, according to an in-depth analysis by PNC Bank this week. That's an 8 percent increase over last year,...

 

By Ylan Mui | December 4, 2008; 07:00 AM ET | Comments (0)

A Knee-Jerk Reaction to a Loss in Retirement Savings

If you think you're the only one losing money in your 401(k), think again. In its analysis of 2.7 million employees' plans, Hewitt Associates, a global human resources consulting company, found that the average 401(k) balance dropped 14 percent in 2008 to $68,000, down from $79,000 last year. In just two months, on average, employees have lost 18 percent of their assets, with some losing up to 30 percent. This is how American workers are responding: They're moving their 401(k) retirement savings into less risky investment funds. According to a study released this week, the amount of 401(k) assets in...

 

By Nancy Trejos | November 26, 2008; 07:02 AM ET | Comments (0)

If You Need Help, You're Not Alone

In another sign of how much consumers are hurting these days, more and more of them are turning to credit counselors for help. The National Foundation for Credit Counseling (NFCC), the largest national nonprofit credit counseling organization, reports that the number of calls to its National Locator Line, which automatically connects consumers with counselors, has set new records each week. In October, calls were up 70 percent over the same month in 2007. Year-to-date, the number of calls is up 31 percent over the same period last year. Meanwhile, year-to-date visits to the organization's Web sites through Oct. 31 are...

 

By Nancy Trejos | November 20, 2008; 01:15 AM ET | Comments (0)

The Return of Layaway

You thought it was a relic of your parents' -- or even your grandparents' -- generation. But layaway is making a comeback. This week, Sears reinstituted layaway in its stores across the country after a hiatus of nearly two decades. Company spokesman Tom Aiello said customer demand for the service, which allows shoppers to put merchandise on hold with a small down payment and pay it off over time, has spiked as the economic downturn lingers on like a bad cold. Sears phased out layaway in 1989 because of waning demand, though it kept the service in its jewelry department,...

 

By Ylan Mui | November 19, 2008; 07:01 AM ET | Comments (2)

Monday Round Up

Welcome to another installment in our semi-weekly round-up of Stories To Help You Weather the Recession. (I've given up tacking on Financial Crisis cause I think the R-world pretty much sums things up.) First up is your money. Financial planner and analysts say now may be a good time to put money into certificates of deposit. In flush times, four percent interest seemed laughable. Right now, it's looking pretty darn good. Nancy Trejos wrote about seniors older than 70 and 1/2 who face a unique situation. By law, they have to withdraw money from their retirement counts by the end...

 

By Annys Shin | November 17, 2008; 12:06 PM ET | Comments (0)

Retirees Worried Their Savings Won't Last and Recession-Proof Jobs

Howdy. It's Monday. And not just any Monday. It's the day before what David Broder would say has been "The Best Election Ever"--that is if he was a 20-something who had nothing better to do but watch VH-1 all day. (This weekend he wrote a piece on how Obama v. McCain was the best election he's ever covered, topping even the 1960 JFK v. Nixon contest! Take that Gore v. Bush!) So I know you've got hours of staring at red-and-blue colored maps ahead of you. Not to mention the headache you'll probably get watching the outlines of Ohio, Virginia,...

 

By Annys Shin | November 3, 2008; 10:07 AM ET | Comments (0)

Yet Another Victim of Global Financial Crisis: Your Retirement

Americans are scaling back their contributions to their retirement savings plans, a new study has found. In a survey conducted by Opinion Research Corporation on behalf of TD Ameritrade Holding Corporation, 35 percent of respondents said they have reduced their contributions to their 401(k) or other similar retirement plans. Sixty-three percent said they have completely suspended their contributions. Half of them said the financial strain caused by the economic downturn was the reason for tucking less money away for retirement. Thirty-two percent blamed unemployment and 25 percent attributed the decrease to health care costs. The people cutting back most were...

 

By Nancy Trejos | October 29, 2008; 10:59 AM ET | Comments (0)

What Do Consumers Think About the Bailout?

On Monday, Federal Reserve Chairman Ben S. Bernanke said Congress should consider implementing a second stimulus package. According to at least one survey, though, many Americans are not yet convinced that the $700 billion bailout package already approved by Congress is even going to work. In a survey commission by Truecredit.com and conducted by Harris Interactive, only 1 percent of the 2,021 adults polled said they believe the bailout initiative will be "very effective." Sixty-two percent said they believe it will be at least somewhat effective at improving the current economic climate. Truecredit.com, which is run by Transunion, one of...

 

By Nancy Trejos | October 21, 2008; 07:05 AM ET | Comments (2)

I'm Dreaming of a Cheap Christmas

Usually, I am all about Christmas. I love Christmas, not least because my birthday is the day before and because I also love cookies. But this year, the holiday season conjures up images of large credit card statements, small bank accounts and an evil Grinch who goes by the alias "Dow Jones Industrial Average." Apparently, I'm not the only one in this mess. The National Retail Federation, a trade group, today released the gloomy results of its holiday shopping survey: Consumers plan to spend an average of $832.36 on holiday shopping this year, up 1.9 percent from last year and...

 

By Ylan Mui | October 16, 2008; 12:23 PM ET | Comments (0)

The Financial Crisis and YOU: Some Helpful Links

As the financial crisis has unfolded, many of my colleagues have been compiling information for consumers, from details such as whether they can still use their Wachovia bank card, to whether or not they should buy that pad in Brooklyn. Some are based on your questions so keep them coming at http://washingtonpost.com/yourmoney. Here are links to those pieces: The Crisis and Your Pocket Book series are answers to reader questions. You can check out the installments so far here: The Crisis and Your Pocketbook 3 The Crisis and Your Pocketbook 2 The Crisis and Your Pocket Book Getting in Touch...

 

By Annys Shin | October 15, 2008; 01:58 PM ET | Comments (0)

Got Your Money in a Credit Union? You Too Are Safe

The National Credit Union Administration wants you to know that your money is safe not just in banks, but in the nation's more than 8,000 credit unions. The NCUA is to credit unions what the Federal Deposit Insurance Corporation is to banks. So when Congress passed the bailout plan that raised FDIC insurance limits from $100,000 to $250,000 until the end of 2009, the NCUA agreed to go along with the new limits. In all the discussions about the bailout plan, there has been little talk about credit unions. That's because credit unions have been largely untouched by the subprime...

 

By Nancy Trejos | October 10, 2008; 10:12 AM ET | Comments (2)

The Economy that Stole Christmas

Every fall, retailers try to lower the bar for expectations of holiday performance. They warn of tough times and slow sales, and then cheer when -- surprise! -- things aren't all that bad on Dec. 26. But this year is different. This year, retailers have legitimate reasons to worry, just like the rest of us. In a story this morning, I wrote about the real pressures that retailers are facing for the first time in nearly 20 years. The industry reported additional sales numbers today that feed those worries. Abercrombie & Fitch said sales at stores open at least a...

 

By Ylan Mui | October 9, 2008; 03:55 PM ET | Comments (2)

Shoppers? Yes, They Still Exist

My colleague Kendra Marr was out chatting with shoppers yesterday -- yes, there are still some people shopping, though retail sales figures might have you thinking otherwise. Caleb Huey, a 19-year-old junior at American University, said he was feeling guilty about his new winter wardrobe, but he couldn't stop himself from blowing most of his paycheck from his job at a marketing company. "With the economic downturn, I've been shopping more," he said. "I makes be feel secure to go out and buy more things. I don't know why." In fact, while he was shopping in Georgetown yesterday, someone stole...

 

By Kathy Lally | October 9, 2008; 01:04 PM ET | Comments (1)

Credit Card Debt Is Up

No surprise here. Credit card debt is ticking up. TransUnion, one of the three main credit bureaus, reported that in the second quarter of this year, national credit card debt per borrower increased 2.63 percent to $1,717 from the previous quarter's $1,673. That is also an 8.6 percent jump from a year ago, when average debt was $1,581. What state has the most debt-ridden people? Alaska, with $2,494 per borrower. What state has the least? Iowa, with $1,281. How are we faring around here? The District of Columbia has the fourth highest average debt, with $2,009 per borrower. The District...

 

By Nancy Trejos | September 17, 2008; 07:12 AM ET | Comments (0)

Even the Small Loans Can Hurt

When we think about abusive lending practices, we often think about credit cards and subprime mortgages. But folks, there are many types of loans you can get out there that can get you into trouble. Recently, the Consumer Federation of America, the Consumers Union, and the National Consumer Law Center rated states on how well they protect consumers from excessive interest charges on four types of loans: auto title loans, which are short-term, usually lasting no more than 30 days; payday loans, which are small-dollar, short-term loans that borrowers promise to repay out of their next paycheck; six-month $500 unsecured...

 

By Nancy Trejos | September 9, 2008; 07:42 PM ET | Comments (1)

 

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