1. PF SMS iconsPF SMS icons
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https://learn.extension.org/events/2815
2016 Personal Finance Year in Review

2. Connecting military family service providers
and Cooperative Extension professionals to research
and to each other through engaging online learning opportunities
www.extension.org/militaryfamilies
MFLN Intro
Sign up for webinar email notifications at www.extension.org/62831

3. Today’s Presenter
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Barbara O’Neill, Ph.D
•Rutgers Cooperative Extension’s Specialist in
Financial Resource Management
•Outreach Coordinator for the Personal
Finance concentration area of the Military
Families Learning Network
•Author of over 1500 consumer newspaper
articles, over 120 articles for professional
publications and two books, Saving on a
Shoestring and Investing on a Shoestring

4. An Eclectic Collection of
Personal Finance Topics
This webinar may be the only in-depth
annual review conducted anywhere of
personal finance related research, events,
trends, legislation, and resources.
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5. Webinar Objectives
Present a 2016 “Financial Year in Review”
•Key findings from 2016 personal finance research studies
•Key findings from 2016 government data
•Key 2016 financial events and trends and products
•Key government legislation/policies affecting personal finances
•New or revised financial education resources in 2016
•Preview of expected 2017 personal finance changes
•Key take-aways of 2016 events for financial practitioners
5

6. Q1: What do you think was
the MOST significant
personal finance event of
2016?
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7. Key Findings from 2016
Personal Finance Studies
(Academic)
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8. Propensity to Plan: A Key to
Health and Wealth (3/16)
• Respondents reporting frequent planning behavior had
higher health behavior scores
• Respondents reporting frequent planning behavior had
higher financial behavior scores
• Respondents who had higher health behavior scores
had higher financial behavior scores
https://www.onefpa.org/journal/Pages/MAR16-Propensity-to-Plan-A-Key-to-Health-and-Wealth.aspx
8

9. Retirement Age and Life Expectancy
• Retiring after age 65 may help people live longer
• Risk of dying (any cause) was 11% lower for a one-year delay
from age 65 to 66
• Risk of dying fell further for people who retired between age 66
and 72
• Even people who retired for health reasons had lower risk of
dying
• Postponing retirement may delay natural age-related declines
in functioning
http://jech.bmj.com/content/early/2016/03/21/jech-2015-207097.short?g=w_jech_ahead_tab (Wu et al.)
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10. Home Equity as a Retirement Income
Strategy
• Pfau (4/16) study of use of reverse mortgages to
supplement portfolio withdrawals
• Opening line of credit at start of retirement and then
delaying its use until the portfolio is depleted
creates the most downside protection
• Key take-aways:
– Open RM line of credit at earliest possible age and leave
it unused as long as possible
– Lenders or government could eliminate this strategy
– RMs are not just something to use as a last resort
https://www.onefpa.org/journal/Pages/APR16-Incorporating-Home-Equity-into-a-Retirement-Income-Strategy.aspx
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11. Retirement Portfolio Math
• Isrealsen (1/16): A portfolio of 65% stocks and 35%
bonds/cash has historically had a 98% chance of
lasting 35 years
– Assumes a 4% withdrawal rate and a 3% COLA increase
• Retirees with portfolio balances equal to 12 times
their final working year salary can replace 60% of
their wages with a 5% withdrawal rate
http://www.aaii.com/journal/article/the-mathematics-of-retirement-portfolios
11

12. “Safe” Retirement Spending
“Feel Free” Retirement Spending Strategy (4/16):
Spending level where you have little worry about
depleting savings
•Person’s age ÷ 20
•Age 60: 60 ÷20 = 3% of savings
•Age 70: 70 ÷ 20 = 3.5% of savings
•Age 80: 80 ÷ 20 = 4% of savings
http
://www.investmentnews.com/article/20160622/FREE/160629965/this-simple-retirement-s
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13. Retirement Spending “Guardrails”
• Klinger (2016) studied retirement portfolio “failures”
(i.e., running out of money)
• Asset returns alone were not a good early warning
sign of failure
• Withdrawal rate ratio was a good indicator of future
portfolio failure
• Applying a guardrail to a retirement strategy could
help ensure a financially successful retirement
https://www.onefpa.org/journal/Pages/OCT16-Guardrails-to-Prevent-Potential-Retiremen
13

14. Personal Traits of Savers
• Age- Willingness to save decreases until age 60 and flattens
• Economic Hardship in Early Life- Increases savings
• Savings Behavior in Youth- Increases savings
• Interest in Financial News- Increases savings
• Household Administration- Running a “tight” household
• A Sense of Control- More willing to set aside money now for
future spending
• Optimism Regarding the Economy- More willing to
postpone current consumption
http://www.aaii.com/journal/article/what-personal-traits-do-savers-share.mobile 14

15. Impulsiveness and Saving
• Research by Newcomb (7/16)
• When people focus on the future, they tend to be less
impulsive, regardless of their level of financial literacy
• High levels of impulsiveness and materialism were
associated with poor financial decision-making
• The strongest predictor of good financial decisions was
not financial literacy but focus on the future
http://www.apa.org/news/press/releases/2016/08/save-money.aspx
15

16. Key Findings from 2016
Personal Finance Studies
(Non-Academic)
16

17. “4% Rule” Withdrawal or Annuities?
• TIAA Institute Study (5/16): compared systematic
withdrawals to annuitizing
• Conclusion: Do both!
– Put half of savings into variable annuity
– Get additional income from withdrawals from stock and
bond portfolio
• Combination approach provided the best mixture of
both income and ending wealth
https://www.tiaainstitute.org/public/institute/research/lifetime-income/achieving-retiremen
17

18. 2016 EBRI Retirement Confidence
Survey (RCS)
• 69% of workers (or their spouse) had saved for
retirement
• Considerable gap between workers’ expectations and
retirees’ experience about leaving workforce
• 48% of workers (or spouse) had calculated retirement
savings need
• 54% of workers had < $25,000 saved (excluding
value of home and DB pension
– Includes 26% who have < $1,000
https://www.ebri.org/pdf/surveys/rcs/2016/EBRI_IB_422.Mar16.RCS.pdf18

19. Millennial Retirement Planning
• AICPA Study (3/16): Millennials have 2 major
obstacles to saving for retirement
– Student loan debt
– Pessimism and scars from the 2008 financial crisis
• Only half had started to save for retirement
• Half fear losing their savings in retirement
• Reassure millennials that time is on their side
– Time to invest
– Time diversification
https://www.aicpa.org/press/pressreleases/2016/pages/saving-is-a-top-priority-for-millennials.aspx
Journal of Financial Planning, September 2016, p. 14. 19

20. America Saves Week Survey
• 2016 survey: 49% of 1,004 respondents save at least
5% of income
• 43% save automatically outside of work
• 40% report good or excellent progress in “meeting
their savings needs”
• Those with “a savings plan with specific goals” save
more successfully than those without a plan
http
://www.americasavesweek.org/less-than-half-of-u-s-households-report-good-savings-progress-according-to-9
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21. Financial Fragility
Associated Press poll (5/16)
•75% of people in households making <$50,000/year
would have difficulty coming up with $1,000 to cover an
unexpected bill
•67% of people in households making $50,000 to
$100,000/year would have difficulty
•38% of people in households making >$100,000/year
would have difficulty
http://bigstory.ap.org/article/965e48ed609245539ed315f83e01b6a221

22. Cost of Child Care
New America study (9/16)
•Full-time care in a center for a child age 4 or under
costs > average in-state college tuition
– Child care center: $9,589
– Average college tuition: $9,410
•One-fifth of families use a “patchwork” approach
http
://www.fa-mag.com/news/finding-good--affordable-childcare-tough-in-any-u-s--state-2921
22

23. FINRAIEF National Financial
Capability Study (NFCS)
• 2015 findings released in Summer 2016
• Continuation of some positive trends in 2015 from 2012 study
(e.g., less difficulty paying bills)
• Percentage of Americans with health insurance increased from
78% in 2012 to 87% in 2015
• 34% of 27,564 respondents probably or certainly could not
come up with $2,000 for unexpected needs
• Half of respondents do not have an emergency fund of three
months expenses
http://www.usfinancialcapability.org/downloads/NFCS_2015_Report_Natl_Findings.pdf
23

24. Identity Theft Aftermath
• Identity Theft Resource Center report: Identity Theft” The
Aftermath 2016
• 150 million Social Security numbers exposed in breaches
in 2015
• Takeovers of credit cards down (due to chips?) but new
account fraud and unauthorized use of debit cards, bank
accounts, and PayPal increased
• Nearly half of tax fraud victims were forced to borrow
money or apply for government assistance when they did
not receive refunds
http://www.idtheftcenter.org/images/page-docs/AftermathFinal_2016.pdf24

25. Key Findings from
2015 Government Data
25

26. Spending Patterns of Older Adults
• U.S. Bureau of Labor Statistics Study
(3/16):Spending patterns do not change significantly
in many categories until a person reaches age 75
• Spending drops significantly after age 75
• Clothing, transportation, entertainment decline
• Health expenditures increased beyond age 64
– $4,958 in age 55-64 group
– $5,956 in age 65-74 group
– $5,708 in age 75+ group
http://www.bls.gov/opub/btn/volume-5/spending-patterns-of-older-americans.htm
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27. Credit Card Debt
May 2016 Credit Card Debt Statistics:
•Average American household debt: $5,700
Households with and without revolving balances
•Average for balance-carrying households: $16,048
Remember, many households are carrying much more
•38.1% of all households carry some sort of credit card
debt (Census and Federal Reserve data)
https://www.valuepenguin.com/average-credit-card-debt
27

28. Baby Boomer Debt
2/16 Federal Reserve Bank of NY data
•Unprecedented debt loads for older Americans
•Average 65-year old borrower has 47% more
mortgage debt and 29% more auto debt than 65-year
olds in 2003
•Student loan debt among 65-year olds is a growing
category
http
://www.wsj.com/articles/new-york-fed-finds-large-increase-in-debts-held-by-those-over-a
28

29. Median Income Increase
9/16 Census Bureau report
•First gain in household income since 2007
•Largest annual gain since Census Bureau began
releasing data in 1967
•Median household income in 2015 was $56,516, up
5.2% ($2,798) from a year earlier after inflation
•2015 official poverty rate: 13.5% vs. 14.8% in 2014
http
://www.wsj.com/articles/u-s-household-incomes-surged-5-2-in-2015-ending-slid
29

30. Household Net Worth Increase
• Collective record of $89.1 trillion for all U.S.
households (Federal Reserve data)
• Generally driven by strong stock market and rising
home values and increased bank deposits
• More than 3 million households remain underwater
on mortgages
http://www.wsj.com/articles/u-s-household-wealth-rises-to-record-1474042043
30

31. “A Tale of Two Americas”
• National averages indicate recovery from the Great
Recession
• National statistics do not reflect the experience of
many people
• Income and assets of upper 10% of households are
skewing data used to measure economic health
• “Hollowing out” of mid-level positions in workforce
http
://bigstory.ap.org/article/6594cedbfa2140f3a766862ae7ef13c0/memphis-and-around31

32. Financial Fragility
May 2016 Federal Reserve Board study:
•46% of adults said they either could not cover an
emergency expense costing $400 or would cover it by
selling something or borrowing something
•31% of non-retired respondents had no retirement
savings or pension
http://www.federalreserve.gov/2015-report-economic-well-being-us-households-201605.pdf
32

33. Upper Middle Class Makes Gains
• Upper middle class is larger and richer than it has
ever been
– 29.4% of population in 2014
– 12.9% of population in 1979
• Study definition: household earnings of $100k to
$350k for family of three
http://www.wsj.com/articles/upper-middle-class-sees-big-gains-research-finds-1466554177
33

34. Q2: Any other interesting
2016 financial surveys
that you remember?
34

35. Key 2016 Financial Events and
Trends and Products
35

36. High-Deductible Health Insurance
Plans
• In 2016, FOR THE FIRST TIME EVER, over half of
workers- 51%- have a deductible of more than $1,000
for a plan covering a single person (vs. 46% in 2015)
• In 2017, 84% of large employers will offer high-
deductible plans
– 35% of large employers will offer ONLY high-deductible
plans (Kaiser/HRET survey)
http
://www.wsj.com/articles/employers-shift-higher-health-care-costs-to-workers-1476
36

37. Pullback on Employer Workplace
Wellness Benefits
• Decline in workplace wellness benefits designed to
cut employee health costs
• Examples include
– Onsite flu shots
– 24-hour nurse hotlines
– Health coaching
– Insurance premium discounts
• Measuring ROI for wellness programs is difficult
http://www.wsj.com/articles/employers-cut-down-on-wellness-benefits-1466395262
37

38. Percentage of Uninsured Americans
at Historic Low
• 2016 Survey: 8.8% of respondents lack health
insurance (versus 16% in 2010)
• Translates to 27.3 million people
• 15.9% of 25 to 34 year olds were uninsured
• 8.1% of 45 to 64 year olds were uninsured
• Around 40% of those under 65 were in a high-
deductible plan (versus 25.3% in 2010)
http://www.wsj.com/articles/percentage-of-uninsured-historically-low-1473220802
38

39. ACA Targeting Young Adults
• Big push to sign up uninsured young adults < age 35
• Using Twitter and Twitch (video game platform)
• Young adults help offset costs of older, sicker people
• Open enrollment: 11/1/16-1/31/17
• < 30% of those with coverage were age 18-34 (2016)
• Concern: Enrollment stagnation could lead more
insurers to drop out
http
://www.wsj.com/articles/obama-administration-to-appeal-to-young-adults-to-sign-up-for
39

40. ACA Health Plan Choices Shrink
• Kaiser Foundation estimate: There could be just one
option for coverage in 31% of counties in 2017 (vs.
7% of counties in 2016)
• Many insurers are losing money on ACA health
plans
• Humana and Aetna have withdrawn from market
• Remaining insurers seeing sharp premium increases
http://www.wsj.com/articles/health-insurers-pullback-threatens-to-create-monopolies-1472408338
40

41. ACA Tax Penalties
• Called a “shared responsibility payment” by the IRS
– In effect, an extra tax
– Substantially higher than 2014 amount
• Taxpayers owe the GREATER OF a flat assessment or a
percentage of income
• 2016 flat assessment penalty is $695 per adult ($347.50
per child) with a maximum of $2,085 per household
• 2016 percentage of income penalty is 2.5% of household
income, up to national average cost of a Bronze plan
https://www.healthcare.gov/fees/fee-for-not-being-covered/
41

42. Decline in Long Term Care (LTC)
Insurance Purchases
• Americans bought 105,000 LTC policies in 2015 (vs.
750,000 in 2000); 3.2 million boomers turned 65
• 70% of people turning 65 in 2016 will need some
type of LTC at some point in their lives
• 8 hours of daily care costs about $44,000
• A year of nursing home care costs $91,000
http://www.fa-mag.com/news/americans-need-long-term-health-planning---will-they-get-it-29081.html
42

43. Older Working Women
• Since 12/07, the share older working women (age
65+) has grown while the percentage of every other
category of U.S. worker- by age and gender has
declined or is flat
• 1 in 7 women work past 65 vs. 1 in 12 in 1992
• Projected to be 1 in 5 women by 2024
• Find job rewarding and/or financial need
http://www.wsj.com/articles/older-women-reshape-u-s-job-market-1456192536
43

44. Oldest Baby Boomers Turned 70
• 2.5 million living baby boomers (of 3.4 million born
in 1946) hit the “Big 70” milestone in 2016
• Can expect about 15 more years of life
• Increase in age 70+ people working; will be ¼ of
people age 70 to 74 by 2024
• Beginning of required minimum distributions: first
RMD in 2016 or 2017
• Never before have so many 70-year olds owed
money on their house
http://www.aarp.org/politics-society/history/info-2016/baby-boomers-turning-70.html
44

45. Bank Overdraft Fees
• 1/16 Article:
http://money.cnn.com/2016/01/14/investing/atm-overdraft-fees/
• Typical overdraft fee is $34
• CFPB Study: majority of overdrafts are made on transactions of
$24 or less
• CFPB Study: If someone borrowed $24 for three days and paid
an overdraft fee of $34, the APR would be 17,000%
45

46. Wells Fargo Scandal
• Wells Fargo fined $185 million for creating fake bank
and credit card accounts.
• Culture of unrealistically high sales targets
• >5,000 employees let go; CEO Stumpf stepped down
• Unwanted credit cards, fake PIN numbers, etc.
• Transfers to fake accounts often triggered overdraft
fees when original account balance ran low
• Take-Away: Check your credit report!
http://money.cnn.com/2016/09/30/pf/fake-bank-accounts/
46

47. ACH Upgrades
• Automated Clearinghouse Network (ACH) for
electronic fund transfers ($42 trillion annually)
• 9/16: Big step toward real-time money movements
• Businesses can hold onto cash until day that
workers get paid instead of a few days later
http://www.wsj.com/articles/same-day-paycheck-deposits-finally-arrive40-years-later-1474668954
47

48. “Quiet Catastrophe” Report
• Smaller % of men age 25-54 are working today than near the
end of the great depression!
• If labor force participation was as high today as 2000, 10
million more Americans would have jobs
• Get by on government benefits and support by others
• Spend 5.5 hours a day watching TV and movies
• Nicholas Eberstadt monograph: Men Without Work: America’s
Invisible Crisis:
https
://www.washingtonpost.com/opinions/americas-quiet-catastrophe-millions-of-idle-men/2016/10/0
48

49. Millennials Living at Home
• For first time in modern era, living with parents edges
out all other living arrangements for 18- to 34-year-
olds (5/16 Pew Research Center Report)
• Just under a third (32.1%) of millennials live at home
(almost half in NJ)
• Impact on parents’ retirement savings, home
downsizing plans, etc.
http
://www.pewsocialtrends.org/2016/05/24/for-first-time-in-modern-era-living-with-parents49

50. Student Loan Debt
• Share of borrowers defaulting on student loans has
fallen modestly but remains high
• Just over 11% of 5.2 million students who left school in
FY 2013 have defaulted
– Default = go > 360 days without making a payment after
leaving school
• More students are finding jobs and increased use of
income-driven repayment plans that reduce payments
http://www.wsj.com/articles/fewer-students-are-defaulting-on-loans-after-leaving-college-1475083308
50

51. Free FICO Credit Scores
• 2013- Discover was first major card issuer to give customers
free access to FICO scores
• 2016- Most big banks now provide credit score access to
customers.
• An estimated 100 million Americans how have access to their
credit score
– Through their credit card or bank
• Does not impact credit score because people are not actively
applying for new credit
http
://www.usnews.com/news/business/articles/2016-03-09/banks-now-giving-customers-access-to-credit-scores
51

52. Tax Fraud Scams
• Explosion of fake e-mails and calls purporting to
come from IRS
• Some ask victims to pay a balance tied to the
Affordable Care Act (ACA)
• Some ask for payment with a prepaid debit card
• The IRS never initiates contact by e-mail or phone
http://www.wsj.com/articles/the-new-irs-email-scam-coming-to-your-inbox-1475143202 52

53. Tax ID Theft Cut in Half
• Unprecedented public-private crackdown
• Tax preparation firms and IRS shared information
• Prevented millions of dollars in fraudulent refunds
• Tax identity theft dropped 50% during first nine
months of the year
• More new safeguards planned for 2017
http
://www.usatoday.com/story/money/2016/11/03/irs-says-2016-crackdown-helped-slow
53

54. Predatory Installment Loans
• CFPB crackdown on payday loans has to increase in
predatory installment loans (“filling a void”)
• Installment loans are not in CFPB payday loan proposals
• Often carry triple digit APRs, but have longer repayment
periods, e.g., 6-12 months
• May be for a few thousand dollars, paid in a series of
installments vs. in a lump sum
• Customers still struggle to repay debt (balance declines
very slowly)
http://www.wsj.com/articles/a-payday-loan-alternative-gains-ground-1470603307
54

55. 40th
Birthday of First Index Fund
• 9/76- Vanguard 500 Index Fund opened (Jack Bogle)
with $11.3 million on assets
• Today: 20 million investor clients, including many
“Bogleheads”: https://www.bogleheads.org/
• > $3 trillion in passively managed assets
http://www.wsj.com/articles/jack-bogle-the-undisputed-champion-of-the-long-run-1472855372
https://gcalhoun.files.wordpress.com/2016/09/16-09-01-wsj-happy-birthday-to-the-index-fund.pdf
55

56. U.S. Homeownership Rate
• 7/16 Census Bureau Report: % of U.S. households
that own homes matched lowest level in 51 years
(1965, when the U.S. Census began tracking)
• Just 62.9% of households owned a home
• Peak of 69.2% in 2004
• Reasons include: rising property prices, high rents,
stagnant pay, student loan debt
http
://bigstory.ap.org/article/7874336198a5405f8bfaa2673a56dffe/us-homeownership-rate-629-percent-matches56

57. New Respectability for Reverse
Mortgages
• Repackaged with 2013 consumer protections
– Homeowners can’t take all of their equity at once
– Protections for non-borrowing spouse (can remain in home
if certain conditions are met)
• Empirical research: No longer just a “last resort”
– Can extend life of savings; line of credit can help portfolio
recover after market downturns
– Can delay taking Social Security benefits until age 70
http://www.wsj.com/articles/new-math-on-reverse-mortgages-1458525888
57

58. Q3: Any other interesting
2016 financial events,
trends or products?
58

59. Key Government Legislation
and Policies Affecting
Personal Finances
59

60. IRS Waivers on 60-Day Rollover
Deadline for Retirement Plans
• 2016 IRS clarification of acceptable reasons for
waivers of 10% penalty and ordinary income tax
• Reasons include
– Financial institution and postal errors
– Misplaced distribution checks never received
– Severe damage to principal residence
– Death or serious illness in family
– Incarceration of taxpayer
https://www.irs.gov/pub/irs-drop/rp-16-47.pdf
60

61. DoL Final Fiduciary Rule
“Covered investment advice is defined as a recommendation
to a plan, plan fiduciary, plan participant and beneficiary or
IRA owner for a fee or other compensation, direct or indirect,
as to the advisability of buying, holding, selling or exchanging
securities or other investment property, including
recommendations as to the investment of securities or other
property after the securities or other property are rolled over,
transferred or distributed from a plan or IRA”
https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/fact-shee
61

62. DoL Fiduciary Rule Implications
• Aimed at eliminating exorbitant fees and commissions
• Financial advisors who provide guidance on retirement
plan assets are required to recommend what is in the
best interests of their client
• Compensation paid to advisors must be “reasonable”
• Expect adjustments in retirement services market
procedures (takes effect in April 2017)
http://www.investmentnews.com/article/20160509/FEATURE/160509939/the-dol-fiducia
62

63. Changes to Social Security
Claiming Strategies
• Beginning May 2016, married couples are no longer
able to file for- and then suspend- receiving benefits for
the purpose of making their spouse eligible to take
spousal benefits
• Age 62 by 12/31/15 (born 1953 or earlier): restricted
application for spousal benefits only still allowed at full
retirement age (FRA)
• Still have one-time right to withdraw application for
benefits within 12 months after benefits begin
https://www.onefpa.org/journal/Pages/JUN16-Redo-Strategies-When-Can-You-Redo-a-Prior-Social-Security-
63

64. New FAFSA Timeline
• Free Application for Federal Student Aid (FAFSA)
• Can file as early as October 1 instead of next year
• Can use actual income tax data instead of estimated
data from returns not yet filed
• May get earlier financial aid offers from colleges
• Take-aways:
– Submit FAFSA as early as possible
– Realize capital gains on assets before January 1 of
student’s sophomore year of HS to avoid having money
count as income
http://www.kiplinger.com/article/college/T042-C000-S002-new-strategies-to-get-more-financial-aid.html
64

65. 2016 Military Topic: Military Lending
Act (MLA)
• Military Lending Act (MLA) Final Rule changes in effect 10/3/16
• Extends MLA protections, including 36% Military Annual Percentage Rate
(MAPR) cap, to a wider range of credit products, including credit cards.
• Modifies MAPR to include fees for credit-related ancillary products sold in
connection with the credit transaction, finance charges associated with
consumer credit, and certain application and participation fees.
• Provides a safe harbor for creditors ascertaining whether a consumer is
covered by the final rule's protections.
• Modifies existing prohibition on rolling over, renewing or refinancing
consumer credit.
• Subjects creditors to civil liability and administrative enforcement for MLA
violations.
https://www.fdic.gov/news/news/financial/2015/fil15037.html
65

66. 2016 Military Topic: Blended
Retirement System (BRS)
Authorized by the National
Defense Authorization Act (2016).
Three Pillars:
1.Retirement pay or pension
2.Automatic contributions, plus
matching contributions, to TSP
3.Continuation pay at mid-career
point
66

67. Breaking the BRS Down
• 1% automatic DoD contribution to TSP after 60 days of service
regardless of SM’s contribution; 2 YOS vesting
• Up to 5% base pay match for TSP deposits through 26 YOS
• Serve 20 years, get 40% of highest 36 months of average
base pay
• One-time continuation bonus paid out at 12 years to SMs who
serve 4 more years: 2.5x monthly base pay (military has
discretion to increase amount for skills, retention)
• Anyone with < 12 years of service as of 12/31/17 is eligible to
sign up for the BRS
• Opt-in period is calendar year 2018
• SMs who joined before 1/1/06 grandfathered in current system
67

68. 2016 Military Topic: Military Family
Lifestyle Survey (Blue Star Families)
• Third annual survey in 2016
• Increases understanding of unique needs and
challenges of military families
• Almost 7,000 respondents in 2015
• 2016 findings released in December 2016
https://bluestarfam.org/2016/04/blue-star-families-launches-2016-annual-military-family-lifestyle-survey/
68

69. DMDC Surveys
• DoD Defense Manpower Data Center (DMDC)
• Methodology vs. Blue Star Families studies:
http://download.militaryonesource.mil/12038/MOS/Surveys/ADS
• 2016 Active Duty Spouse Survey Results (7/16):
http://www.militaryonesource.mil/footer?content_id=293017
69

70. Q4: Any other interesting
2016 financial legislation
or policies?
70

71. New or Revised Financial
Education Resources in
2016
71

72. Annual Limits Relating to
Financial Planning
http://www.cffpinfo.com/annual-limits/
72

73. Next Gen Personal Finance
• Significant changes to several units
– Created new Types of Credit unit
– Revamp of Managing Credit unit revamp
• New Products:
– Question of the Day
– Data Crunches
– Interactive Library
– Forms and Statements (Coming Soon!)
• New Lessons: Entrepreneurship, Identity Theft & Philanthropy
• Expanded NGPF Assessment Bank with Pre and Post-Tests and
• Launched Professional Development opportunities
– NGPF Summer Institute
– Professional Learning Community
– Q&A Forum
• Had 52 guests on the NGPF Podcast, including Barbara O'Neill!73

74. NEFE
SAM (Smart About Money): http://www.smartaboutmoney.org/
•Three courses (Emergency Fund, Transportation, Housing) were
added
•Five Money Basics courses were added on basic concepts such
as: credit/debt, employment, insurance, investing, and
spending/saving.
•Comprehensive worksheets have been added.
•Typical questions (and answers) were added to a section called
Common Money Questions.
•The site is mobile responsive and can be viewed on smartphones
and tablets.
74

75. NEFE
Evaluation Toolkit: http://toolkit.nefe.org/
The Evaluation Toolkit Manual was revised by the Claremont
Evaluation Center. The Financial Education Evaluation
Manual helps financial educators understand the purpose
and goals of evaluation and provides a basic overview of the
evaluation process.
CashCourse: https://www.cashcourse.org/
New CashCourse content for 2016:
•5 CashCourse coursework modules translated to Spanish
•New Budget Wizard student budgeting tool
•7 new articles on insurance, contributed by the NAIC
75

76. NEFE White Paper on Financial
Education Evaluation
Perspectives on Evaluation in Financial
Education: Landscape, Issues, and Studies
10 sections about different audiences and topics
for financial education
http://toolkit.nefe.org/Portals/0/NEFE%20Evaluation%20White%20Paper%20Oc
76

77. CFPB
http://www.consumerfinance.gov/adult-financial-education/
77

78. Jump$tart Coalition
Making the Case for Financial Literacy 2016:
http://jumpstart.org/assets/files/Making_the_Case_2016_UpdateMay2016.pdf
78

79. eXtension Student Loan Fact Sheet
Series
•College Savings Options
•Paying for Education and Training Beyond High School
•Types of Student Loans
•Student Loans: Responsible Borrowing
•Determining Your Student Loan Servicer and Loan Balance
•Choosing a Federal Student Loan Repayment Plan
•Federal Student Loan Consolidation and Forgiveness
•Recovering from Student Loan Default
•Student Loans: Later Life Impacts
•Student Loan Legislation: Changes You Need to Know
http://articles.extension.org/pages/72895/student-loans
79

80. Rutgers Cooperative Extension
High School Lesson Plans
•Risks and Benefits of Entrepreneurship (85k PDF)
•Compound Interest: Your Best Friend or Worst Enemy (106k PDF)
•Know the Score: Credit Score Modeling and Impacts (360k PDF)
•The Impact of Inflation (128k PDF)
•Monetary Transaction Tools (572k PDF)
•Civic Financial Responsibility (511k PDF)
•Insuring and Protecting Property Insurance (112k PDF)
•Comparing Insurance How Health Insurance Works (973k PDF)
•Values, Goals, and Financial Decisions (252k PDF)
•Spending Plan/Budget: Your Financial Road Map (112k PDF)
•Interest: The Cost of Borrowing Money (126k PDF)
http://njaes.rutgers.edu/money/
80

81. Road to Financial Wellness
Pit Stop Video (Phroogal)
https://njaes.rutgers.edu/money/road-to-financial-wellness.asp
81

82. Q5: Any other new financial
education resources
developed in 2016?
82

83. Preview of Expected
2017 Personal Finance
Changes
83

84. Social Security
Social Security Feature 2017 2016
Maximum Taxable Earnings $127,200 $118,500
Quarter of Coverage $1,260 $1,300
Earnings Limit (for benefits < FRA) $15,720 $16,920
Maximum Social Security Benefit $2,639 $2,687
0.3% COLA for Social Security beneficiaries in 2017
https://www.ssa.gov/news/press/factsheets/colafacts2017.pdf
84

85. Health Savings Accounts
HSA Feature 2017 2016
Contribution Limit Self-Only: $3,400 (+ $50)
Family: $6,750
Self-only: $3,350
Family: SAME
Catch-Up Contribution $1,000 SAME
High Deductible Health
Plan (HDHP) Minimum
Deductibles
Self-Only: $1,300
Family: $2,600
Self-Only: SAME
Family: SAME
85

86. 2017 Retirement Savings Plan
Contribution Limits
• Increases in income phase-outs for IRA savers
• Increases in AGI limits for the saver’s credit
• Increase in overall defined contribution plan limit: up to
$54,000 (from $53,000 in 2016)
• SAME 401(k)/403(b)/TSP maximum contribution limit of
$18,000 for 2017
• Same $6,000 maximum catch-up limit
http://www.forbes.com/sites/ashleaebeling/2016/10/27/irs-announces-2017-retirement-plans-
contributions-limits-for-401ks-and-more/#6d21270556e2
86

87. Inflation-Adjusted Limits to Take
Effect in 2017
• Standard deduction for singles up $50 to $6,350
• Standard deduction for couples up $100 to $12,700
• Standard deduction for heads of household up $50 to $9,350
• Maximum EITC of $6,318 (3+ qualifying children)
• Estate tax exclusion amount will rise to $5,490,000 from
$5,450,000 in 2016
https://www.irs.gov/uac/newsroom/in-2017-some-tax-benefits-increase-slightly-due-to-
inflation-adjustments-others-are-unchanged
87

88. Comments? Questions?
oneill@aesop.rutgers.edu
@moneytalk1 on Twitter
Have a wonderful holiday season and a great new year!

89. Connect with MFLN Personal Finance Online!
MFLN Personal Finance
MFLN Personal Finance @MFLNPF
PF SMS icons
PF SMS icons
89

90. Evaluation and
Continuing Education Credits/Certificate
MFLN Personal Finance is offering 1.5 CEUs for
AFC-credentialed participants and CPFC-
credentialed participants for today’s webinar.
Please complete the evaluation and post test at:
https://vte.co1.qualtrics.com/jfe/form/SV_7Tzx9RwK3BDJsc
5
Must pass post-test with an 80% or higher to receive certificate.

91. MFLN Intro
91
We invite MFLN Service Provider Partners
to our private LinkedIn Group!
https://www.linkedin.com/groups/8409844
DoD
Branch Services
Reserve
Guard
Cooperative Extension

92. Upcoming Event
The Foreclosure Process
• Date: Tuesday January 24, 2017
• Time: 11:00 am Eastern
• Location: learn.extension.org/events/2814
To connect with MFLN Personal Finance visit:
https://blogs.extension.org/militaryfamilies/personal-finance/

93. www.extension.org/62581
93