Paycheck Chronicles

Frightening Figures Yield Not-So-Terrifying Trends


Five years ago, I used my October column to explore frightening financial figures dealing with everything from online security to military retirement.

With Halloween creeping up on us, it seems like a good time to see how those figures have changed in the past five years. Have they gotten scarier, or has the light of 1,827 days lessened their bite?

Read on. The answers may shock you.

Identity Fraud

The 2011 Javelin Strategy Identity Fraud Survey pegged the total amount of money lost in 2010 to identity thieves at a bone-chilling $37 billion. Given the growth in e-commerce since then, I expected the new number to be dramatically higher, but the same survey released in 2016 calculated 2015 losses at $15 billion, about a 60% decline. While $15 billion is still a large number, the downward trend is promising. Clearly, consumer awareness, transaction-monitoring services and bank email alerts have helped reduced the number. Continue to check your credit report, safeguard your personal information and operate with skepticism. If someone contacts you with an offer that seems too good to refuse, you probably should.

Student Loan Debt

This is a hot topic in the current presidential campaign, and for good reason: Americans owe more than $1 trillion in student loan debt. The five-year trend here is a no-brainer, right? According to The Wall Street Journal, the Class of 2011 left college with an average of $22,900 in student loan debt. Fast forward to the Class of 2016, and the debt load increased an astonishing 62% to $37,172. That’s a daunting figure that spells danger for our kids as they enter their working lives. The fix? Start saving today, make the plan to pay for it a key part and not an afterthought to your kids’ college plan, and finally, begin college with the financial end in mind. In other words, it might not make sense to leave school with a quarter of million in student loans to embark on a career that pays $35,000 per year.

Thrift Savings Plan

Participation in the TSP for the uniformed services has always been a bit sluggish, kind of like a slow-shambling zombie. However, over the past five years, it’s started to pick up speed. The current participation rate of 43.1% is a nice step up from 38.7% in 2011. Let’s keep the trend moving upward. That’s especially critical as the TSP is a cornerstone of the new Blended Retirement System that takes effect in 2018. If you opt for the new system, you’ll need to contribute at least 5% to get all of DoD’s matching funds, and if you stick with the old, more money for retirement means more flexibility and options.

Value of Military Retirement

In 2011, I estimated the lump sum value of a lifetime of military retirement checks an E-7 retiring from the military after 22 years would receive as about $725,000. Using the same calculation and assumptions today, that number rises to nearly $775,000. That’s no surprise. However, it does drive home the value of the traditional military retirement pension. Five years ago, I contrasted that number with what someone who left the service after 12 years would get: no retirement. I encouraged folks to consider continuing their service in the Guard or Reserve to ensure they could collect a retirement from Uncle Sam. That still makes sense today, but one positive aspect of the new Blended Retirement System is that almost everyone will have the opportunity to leave the service with something set aside for their future.

While not all of the updated numbers give us reason to howl with fright, they point out that some of us still have financial monsters in the closet.

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