Posts by KembleFinancial

Student Loan Debt: Implications on Financial and Emotional Wellness

This Prudential study reveals how student loan debt for many graduates has become a profound source of both financial and emotional stress, compromising their ability to establish families and households, save adequately for retirement, and protect themselves against unexpected life events.

Key findings include:

  • Americans are starting to question whether college debt is “good debt”.
  • Many students borrow for school without understanding the terms of their debt.
  • Student loan debt is impacting borrowers’ financial and emotional wellness.
  • Current students and graduates alike continue to affirm the benefits of going to college.
  • Graduates’ experiences suggest a better way forward for current and future students, and they recommend best practices and action plans.
  • College costs, debt can impact the ability to save, buy a home, and socialize with others

The survey findings highlight both the troubling and encouraging facts surrounding student loan debt. Of concern is the trend showing many students don’t know what type of loans they took out, their loan terms, or if they had a co-signer for their loans.

The positive takeaways confirm that the vast majority of graduates and current students say they would still go to college even if they had known more about the financial challenges when they started. And they continue to value the potentially life-changing benefits of higher education.

To help others make smarter choices about paying for college, the study presents some best practices and action plans for future students, current students, and recent graduates.

To view the full report, download Student Loan Debt: Implications on Financial and Emotional Wellness.

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Black and Hispanic Households Face Retirement Challenges

The December 2018 National Retirement Risk Index (NRRI) research release explores the retirement preparedness of black and Hispanic households, with findings that are worthy of discussion and analysis. Over the 10 years from 2007 to 2016, the percentage of black households at risk of not being able to maintain their standard of living in retirement rose from 52 to 54 percent while the number of Hispanic households at risk rose from 51 to 61 percent. By contrast, during that same period, the percentage of white households at risk rose from 42 to 48 percent.

While the research points to a worsening retirement security gap, it doesn’t address the full extent of the challenges facing black and Hispanic households. For instance, median income for black and Hispanic households was not only much lower than white households in 2016, it had declined since 2007. In addition, a stunning 41 percent decline in Hispanics’ median housing wealth during that period accounts for much of the retirement risk increase for Hispanic households, as Hispanics were especially impacted by the downturn in housing prices between 2007 and 2016.

The findings of the Center for Retirement Research (CRR) are consistent with those of Prudential’s Financial Wellness Census™, which surveyed more than 3,000 adults about their financial health. In the study, blacks and Hispanics reported significantly less retirement savings and are more likely to worry about their financial future. Yet in a bright spot, among households with incomes above $50,000, a greater percentage of black and Hispanic households feel they’re on track to help their children with a down payment of a home, and more are on track to reduce or pay off student loans

Closing the retirement security gap will not be easy, but here are a few things that could help:

  • Increase partnering between private corporations and nonprofit institutions.
  • Improve access to workplace retirement plans.
  • Engage financial services firms in grassroots marketing partnerships with trusted community leaders.
  • Increase access to financial wellness programs.
  • Read the full report on Black and Hispanic Households Face Retirement Challenges.

Read the CRR Issue Brief, Trends in Retirement Security by Race/Ethnicity.

The National Retirement Risk Index (NRRI), published by the Center for Retirement Research (CRR) at Boston College, measures the percentage of working-age households at risk of being unable to maintain their pre-retirement standard of living during retirement.

Prudential is the exclusive sponsor of the National Retirement Risk Index.

This is being provided for informational or educational purposes only and does not take into account the investment objectives or financial situation of any client or prospective clients. The information is not intended as investment advice and is not a recommendation about managing or investing your retirement savings. Clients seeking information regarding their particular investment needs should contact a financial professional.

The Prudential Insurance Company of America and its affiliates Newark, NJ.

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