Money Management

2022 was a tough year for investors. Here, we tell you about the one group who didn’t lose their proverbial shirts. 

In 2022, the average retirement account shrunk by 23%. And yet, according to data from Fidelity Investments, Generation Z balances grew by 14%. While boomers and millennials were getting walloped, investors born between 1997 and 2012 were sailing along.

Let’s take a look at why that might be the case.

How it was done

On its podcast, Your Money Briefing, The Wall Street Journal spoke with financial reporting fellow Oyin Adedoyin to learn more. According to Adedoyin, Gen Z’s good fortune had nothing to do with investment savvy or even with beginner’s luck. It all came down to Gen Zers having less invested in the markets.

The average Gen Zer had an investment balance of around $6,000, compared to the average of $103,900 in all Fidelity retirement accounts. With less money invested, there was less damage that could be done.

The flip side of that coin

Lest anyone is tempted to believe that Gen Z’s 2022 experience illustrates the value of not investing, let’s look at two different scenarios. The first is a Gen Zer born in 2004, who puts the same amount into a 401(k) for 30 years. The second was also born in 2004 but thinks they’re playing it safe by not investing in a retirement account.

The average nominal return for the S&P 500 index over the past 30 years is 10%. For the sake of this illustration, we’ll say that Gen Zer No. 1 sees a more modest return of 7%.

Gen Z No. 1 invests $500 per month in their retirement account, never increasing the contribution. At the end of 30 years, their account is worth $566,765.Gen Z No. 2 decides the best move is to move their money to a high-yield savings account, paying a decent rate of 4%. Even if that rate remains stable for 30 years (it won’t), Gen Z No. 2 will end up with $336,510. That amount is certainly nothing to sneeze at, but it is $230,255 less than Gen Z No. 1 earned by investing.

Undeterred

As tough as 2022 was, Adedoyin says that Americans do not appear deterred. That may be because experienced investors understand that, historically, stocks lose on average 35% during bear markets. However, during bull markets, stocks gain an average of 114%.

Just as importantly, bear markets last an average of 292 days, while bull markets last an average of 992 days. Simply put, stocks have increased in value far more often than they’ve lost value.

2022 was a bad year for investors, but it wasn’t anything out of the ordinary in terms of historical performance.

Does this mean Gen Z is not interested in investing?

The fact that the average investment account balance for Gen Zers was $6,000 last year doesn’t mean they’re sitting out the opportunity to allow their money to grow.

According to Adedoyin, his reporting finds that Gen Z has a real commitment to investing, aided by a greater access to internet research than previous generations had.

Target-date funds

One reason that Gen Z had less invested in retirement last year is that they’re just getting started. A whopping 84% of Gen Z investors keep most of their investments in target-date funds. A target-date fund is a portfolio that shifts from stocks (considered more volatile but also more profitable) to bonds (considered stable but offer a lower return) as people age.

A target-date fund allows a Gen Z investor to invest more gradually over time. Many increase their savings rate by 1% per year until they hit 10% or more of their annual income.

It’s a matter of “set it and forget it,” as many Gen Z workers are not fully aware of how much they have in their 401(k) accounts. They are automatically enrolled in the system and make regular pre-tax contributions. The goal is to leave it alone and let it grow.

Perhaps that’s the best advice for any of us as we invest in our own futures. Don’t sweat the ups and downs when there is a long game to be played.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Dana George has positions in Target. The Motley Fool has positions in and recommends Target. The Motley Fool has a disclosure policy.

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If you’re a SNAP participant, you need to protect your benefits from criminals. Read on for common scams you should be aware of and learn how to stay safe. 

With the cost of living rising throughout the country, some Americans have difficulty affording food. The Supplemental Nutrition Assistance Program (SNAP) helps many U.S. households put food on the table — especially now when grocery prices are higher than in years past.

Unfortunately, there are scammers out there looking to steal benefits from others. If you’re a SNAP recipient, you should stay current on known scams so you don’t fall victim to theft. We’ve outlined a few known scams below so you can take extra precautions to protect your benefits.

Text message scams

According to the United States Department of Agriculture (USDA), there have been some complaints of scammers looking to steal benefits by text message. Scammers send texts alerting recipients that their SNAP EBT cards have been locked. The scammer will then ask the recipient to provide benefits information such as their card number and PIN, which puts their account at risk for fraud.

It’s never a good idea to reply to a text message or call a number provided by text message that relates to your SNAP benefits or your SNAP EBT card. If you receive such communication, it’s in your best interest to contact your local SNAP office directly so you can verify whether the message is legitimate and avoid a potential scam.

EBT card skimming scams

Criminals are also stealing SNAP benefits through card skimming techniques. They do this by attaching a device to a retailer’s card-swiping machine, which copies the EBT card information. Unfortunately, this type of scam can happen when you least expect it. Thieves also do this to steal debit card and credit card information, so be aware of this scam no matter how you pay.

The USDA suggests that SNAP participants review their accounts regularly to ensure no unauthorized charges have been made. Additionally, examine the card machine to see if anything looks suspicious before swiping your EBT card in the checkout line. If it does, avoid using that machine. If you’ve fallen victim to card skimming, contact your local SNAP office immediately.

Website scams

There are also scammers looking to steal your SNAP benefits online. When visiting a website that mentions SNAP benefits, be cautious. Some scammers set up websites to collect personal information, including SNAP benefits information. If a website looks questionable or you’re unsure if it’s an official website, contact your local SNAP office first.

Tips to keep your SNAP benefits safe

Sadly, scammers are getting more creative and looking for new ways to trick everyday consumers. You have to be extra careful if you want to avoid fraud in your daily life. Below are a few tips that may help you avoid having your SNAP benefits stolen by thieves:

Choose a unique PIN. When choosing your SNAP EBT card PIN, make sure it’s not easy to guess. Choosing a unique PIN will make you less susceptible to theft.Never share your PIN with others. Similarly to your debit card PIN, your SNAP EBT card PIN should be kept secret. When using your card, cover the keypad so no onlookers see what you’re typing in.Check card readers before using them. Before you swipe your SNAP EBT card, check the card reader to see if anything looks tampered with or otherwise seems suspicious.Review your account. It’s a wise idea to review important accounts often. This includes personal finance accounts, like your bank accounts and credit cards. You should also regularly check your SNAP EBT account so you can spot suspicious activity quickly.

SNAP is a valuable resource

Despite a rise in scams in recent years, SNAP is a fantastic resource for those eligible for the program. If you’re a new SNAP participant, check out these little-known perks of SNAP benefits to learn how to use your benefits in more ways. We’ve also outlined a few tips to help you maximize your SNAP benefits so you can get more value out of the program.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Natasha Gabrielle has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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A writer shares her Aldi shopping experience. Read on to see what she’s saved and whether you should shop at Aldi. 

When a friend of mine introduced me to Aldi a little over a month ago, I was skeptical about shopping there. I liked the idea of keeping my credit card tab to a minimum in the course of buying groceries. But I knew that some of the lesser-known brands stocked by Aldi would not fly with my picky-eater kids. I also figured my savings at Aldi would be minimal given that I shop regularly at Costco and save money there.

In the end, shopping at Aldi over the past month has only saved me about $30. But hey, the more money I can keep in my bank account, the better. At the same time, going forward, I may not make Aldi a regular weekly stop.

How I’ve saved at Aldi

Buying certain produce items at Aldi has allowed me to save money over the past month. My kids eat a lot of cucumbers, for example, and at Costco, these cost $1.99 each. At Aldi, they’re $1.25 each, so I’m saving about $0.75 per cucumber.

Meanwhile, I commonly buy six cucumbers a week, or about 24 per month. So all told, I’ve saved around $18 on cucumbers alone by getting them at Aldi.

Grapes have been another area where I’ve saved. Costco grapes retail for $1.86 a pound, while Aldi grapes are $1.29 a pound. By my estimates, I’ve saved about $10 on grapes by getting them at Aldi.

Finally, Aldi blackberries are $1.29 for 6 ounces, or about $0.21 per ounce. Costco blackberries are $4.38 a pound, or $0.27 per ounce. The difference here isn’t so substantial, but blackberries are popular in my house, so I’ve saved around $2 by purchasing these at Aldi rather than Costco. So all told, I’ve spent about $30 less by buying these specific produce items at Aldi.

I’m not always going to make time for the extra trip

At this point, I know there are certain produce items I can generally scoop up for less at Aldi compared to Costco. And since my local Aldi is in the same shopping center as Costco, it’s easy enough to pop in before doing my Costco run.

But I’ll also be honest and say that for those weeks when I’m really busy, I may just skip the Aldi stop and stick to Costco since that’s apt to save me time. I’m all for spending less on groceries, but at the end of the day, I’m only looking at about $7 or so in weekly savings by stopping at Aldi. It’s enough of a savings for me to make the extra trip when I can, but when I’m swamped, it’s not worth it.

Since I’m self-employed, sometimes freeing up 15 or 20 minutes to work can be far more lucrative than saving $7. So while I still intend to shop at Aldi, I can’t say with certainty that I’ll shop there so regularly. The off-brands and limited selection make it so that I’m really only buying produce there, and a few select items at that.

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Have a tax refund coming your way? Read on for some great advice for making the most of it. 

This year, tax refunds are expected to be smaller than last year due to a number of pandemic-era benefits coming to an end. But that doesn’t mean you won’t end up with several hundred dollars in your bank account — or several thousand, depending on your tax situation.

That gives you a prime opportunity to put that money to good use. And if you’re not sure what to do with your refund, it pays to heed this great advice from financial expert Suze Orman.

1. Focus on credit card debt first

Credit card interest rates can be painfully high. It’s for this reason that so many people commonly get trapped in a cycle of debt. If you’re carrying a balance on a credit card, it pays to use your tax refund to pay it off or at least whittle it down.

And while you’re at it, you may want to see if you qualify for a 0% introductory interest rate credit card. If you have a remaining balance after applying your tax refund, transferring it over and getting a break from accruing interest could make your debt easier to knock out.

2. Ask yourself what specific financial need you have

Maybe you’ve been putting off a big home repair due to a lack of money. Or maybe you really need to take a class to boost your job skills so you can seek out a higher-paying role, but a lack of money has been holding you back. These are the sort of things you might consider spending your refund on if you don’t have a nagging credit card balance to deal with.

3. Build some near- or long-term savings

Your next tax refund could make it possible to build yourself some financial security. And there are a couple of ways to go about that.

First, if you don’t have enough money in your savings account to cover at least three full months of essential living expenses, use your tax refund to boost your emergency fund. In fact, Orman suggests accumulating up to a year’s worth of bills in emergency savings. That buys you a ton of protection in the event of a recession, when jobs tend to be lost and finding work can be difficult.

If you’re feeling confident in your emergency fund, you can focus on building long-term savings. That could mean contributing your refund to an IRA account you withdraw from in retirement.

Now, Orman happens to be a big fan of Roth savings accounts, which give you tax-free withdrawals. That’s a huge benefit to enjoy in retirement, when money might get tight.

You may want to consider putting your refund into a Roth IRA. And if you’re saving in a workplace 401(k) plan, see if there’s a Roth option there, too. The upside of putting your refund into a workplace retirement plan is that your employer might match your contribution to some degree.

There are some people who won’t be getting a tax refund at all this year. But if you have a pile of money coming your way from the IRS, think about the ways you can use it to save yourself money and improve your financial picture. Also, think about how you can use your refund to eliminate a source of stress in your life (like a home repair hanging over your head). Addressing stress points could have a really big impact.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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Your healthy retirement is the golden years spent without serious illnesses. Read on to learn which countries have the longest healthy retirements. 

If you want the longest “healthy retirement” — that is, those years spent without serious illness or injury — the data has a strong suggestion: move to Europe. Specifically, France, Luxembourg, Greece, Spain, or Belgium.

According to a recent Bloomberg study, which compiled life expectancy data from the World Health Organization (WHO) and effective labor exit ages from the Organization for Economic Cooperation and Development (OECD), these five countries have the longest healthy retirements among the world’s top 38 economies.

The United States, on the other hand, ranked low for healthy retirements, falling in the bottom five countries for both men and women.

What does ‘healthy retirement’ even mean?

According to Bloomberg, a healthy retirement boils down to two factors:

Effective retirement age: The average age workers retire from their jobs. This is different from a country’s official pension age (or “normal” retirement age), which is the age workers can draw benefits from a pension system.Healthy life expectancy: The average number of years retirees live in good health with no serious diseases or injuries.

A healthy retirement, then, is the difference between the year you retire and the year you begin to experience serious health problems or injuries.

For instance, men in France typically retire at age 61.8 and remain healthy until they’re 78.5. That means, they have around 16.7 years of healthy retirement. Women in France also retire at 61.8 but on average they remain healthy until they’re 80.8, giving them 20 full years of healthy retirement.

Let’s compare that to the U.S.

Men in the U.S. often retire at 67.9 and can expect to remain healthy until they’re 75.6. That means, they have around 7.7 years of healthy retirement. Women, on the other hand, have slightly longer retirements: they typically retire at 66.5 and stay healthy until they’re 77.1, giving them 10.6 years.

Which countries have the longest healthy retirements?

Bloomberg doesn’t rank every country, only the 38 registered with the OECD. According to its data, here’s how these countries rank, from longest to shortest healthy retirements:

Keep in mind these rankings may not align with your personal experience. For instance, there are very likely men and women in Mexico who live longer, healthier lives than certain men and women in France.

Another shortcoming: Bloomberg bases its ranking on data that was obtained in 2019. Since both WHO and OECD will not release new data until 2024, we won’t know which countries enjoy the longest healthy retirements post-pandemic.

How can you live a longer, healthier retirement?

If you want a long, healthy retirement, you can generally do two things. You can make positive changes to your health, so that you live longer without serious illnesses or injuries. Or, you can save more money now and retire earlier than the average effective retirement age for your country.

Health conditions aren’t always in our control. But how we spend and save money generally is. Consider the following:

Invest early. Opening a brokerage account and investing at an early age gives your money more time to grow. Conversely, if you’re closer to a retirement age, you’ll likely need to invest large sums to give your retirement a boost.Invest in growth and stability. Growth investments come with more potential for large returns, but they come with risks, too. Safer investments, like bonds, can bring more diversification and stabilize your portfolio.Move to a country with a lower cost of living than the U.S. You could look at Costa Rica, Greece, or Poland. These countries have cheaper living costs and per the list above, their healthy retirements are longer than the U.S. (be sure you know the requirements before you consider moving).

If you’re looking to retire early, work on the above tasks to put your personal finances on the right track.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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