Does Your Gender Affect Your Credit Score?- By Suzanne Woolley

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In the contest for the gender with the best credit, men win—but only by a hair.

The average credit score for men is 630 out of a possible 850, compared with 621 for women. What's more intriguing: Men maintain that credit edge even though their average overall debt and average credit card balance exceed the averages for women.

Men's higher wages may help explain the difference in results, which come from a study of users of the website Credit Sesame. While income isn't a factor in credit scores, 23 percent of men in the study, which sampled more than 2.5 million of the site's 7 million members, said they earned at least $75,000 a year, while only 18 percent of women reported earning that much. Greater financial flexibility makes managing credit easier, apparently.

Here are other ways the credit picture differs for men and women:
Women use a higher percentage of available credit 
The income gap strikes again here, leading to a bit of a Catch-22. If a higher income means you manage your credit better, you may get a higher credit score and a higher credit limit. A higher limit means that you can carry the same or a higher balance than the next person, but you'll be using a smaller percentage of your available credit. And utilizing a low percentage of your total credit is good for your credit score..

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Credit scores for both genders improve with age 
This makes sense, assuming consumers get smarter about how to use credit, and more aware of how important a good score can be, as they get older. Also, as the years add up, odds are you're paying down your mortgage and working to get rid of debt. Even if you have a high limit on your credit cards, you're likely (hopefully) able to draw on a lesser percentage of it than you did when you were younger.

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The benefits of age accrue more to men in credit scores. At age 65 or above, male users of Credit Sesame had a score of 705, while women in the same age range had a score of 690. Credit scores rose significantly for both genders after age 54.
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Male and female credit ninjas live in affluent coastal pockets
Three of the five ZIP codes with the highest credit scores for women were in New York City, with scores ranging from 728 to 733—and median household incomes, the Census Bureau shows, ranging from $100,763 to $115,485. The other two ZIP codes were in San Francisco (average score of 733); the 94114 ZIP code there has a median household income of just under $123,000.

The ZIP codes with the highest credit scores for men are in Arlington, Va. (745); Cupertino, Calif. (740); and New York (734). Cupertino, home to Apple's headquarters, takes the cake for the ZIP code with the highest median household income in the group, at $130,961. The median value of owner-occupied housing units in Appledom tops $1 million. But here's one thing about those folks not worthy of envy—how many annoying credit card solicitations they get in the mail.
In cities where men have the lowest scores, women score higher 
Here's a Pyrrhic victory: In six of the 10 ZIP codes where men's credit scores are the lowest, women's scores beat them. That includes places like Columbus, Ohio, and Detroit, where men have an average credit score of around 570. Women score five points higher.

That gender gap is also probably tied to income. Credit Sesame found that the unemployment rate for women in some of those cities is lower than it is for men. But the median incomes are very low—under $45,000 for Columbus and just more than $26,000 for Detroit—and the poverty levels are striking. The share of people living below the poverty level in Detroit is almost 43 percent. That compares with 4.3 percent in Cupertino.

"In some ways, it's good news that the study shows there isn't a huge discrepancy between the credit scores for men and women," says Stew Langille, Credit Sesame's chief strategy officer. "But it doesn't feel as equitable as it should."

Culled from Bloomberg.com

The IRS Says Identity Thieves Hacked Its Systems Again -By Jonathan Chew

FILE - This April 13, 2014, file photo, shows The Internal Revenue Service (IRS) headquarters building Washington. Although many small business owners hire accountants and attorneys to complete their income tax returns, taxes are a hassle. In a survey released in 2015 by the advocacy group National Small Business Association, nearly 60 percent of the owners surveyed said the administrative burdens were the biggest problems posed by federal taxes. And 85 percent of the more than 675 owners said they relied on a professional to prepare their returns. (AP Photo/J. David Ake, File)

Identity thieves attempted to breach computer systems at the Internal Revenue Service to file fraudulent tax refunds.

The criminals were especially after E-file PINs, which are used by some individuals to electronically file a return, the agency said in a statement released Tuesday. Around 464,000 unique social security numbers were involved, and of that total, 101,000 SSNs were used to successfully access an E-file PIN.

The thieves used personal taxpayer data that was stolen elsewhere to help generate the PINs, the agency said. No personal data was compromised or disclosed by IRS systems, and affected taxpayers will be notified by mail of the attack. “The IRS is also protecting their accounts by marking them to protect against tax-related identity theft,” the agency added.

Last week, the IRS temporarily could not accept many taxpayer returns after a systemwide computer failure occurred. The agency said this attack was unrelated to the outage.

This year’s attack follows a massive data breach at the IRS in 2015, when hackers stole information from 330,000 taxpayers to successfully file bogus tax refunds and obtain $50 million in federal funds.

A later inspector general report found that the computer system the IRS had been using to detect identity theft may have been vulnerable to hackers.

Culled from Fortune.com

Asia stocks down for 3rd day, Yellen testimony awaited

Asian stock markets fell for a third consecutive day Wednesday, beset by nerves about shaky global growth, falling oil prices and possible capital shortfalls at major European banks.
KEEPING SCORE: Japan's Nikkei 225 sank 2.3 percent to 15,713.39 and is down about 11 percent in the past month. Australia's S&P/ASX 200 shed 1.2 percent to 4,775.70. Stock benchmarks also fell in Southeast Asia, India and New Zealand. Markets are closed in China, Taiwan, Hong Kong and South Korea for Lunar New Year holidays. Hong Kong and Korea reopen on Thursday and China and Taiwan resume trading on Monday.
BANK DOUBTS: Investors are questioning whether European banks such as Deutsche Bank have sufficient capital after a slump in its share price and a record annual loss. Despite assurances from the German bank, some analysts expect it will need to issue new shares to raise billions of dollars, which is likely to further depress its share price. Banks also face economic headwinds that could slow lending and hurt profits. Some are also exposed to the slump in oil prices via their loans to energy companies. The nerves in Europe have spread to banks worldwide. In Asia, Mizuho Financial was down 3.5 percent in Tokyo and ANZ fell 1.9 percent in Sydney.
THE QUOTE: "The central bank life support trade of the past eight years has now created this coma-like scenario where markets cannot return to normal trading," said Evan Lucas, market strategist at IG in Melbourne, Australia. "The artificial support from central banks is at a crossroads. Central bank intervention will no longer create the holding pattern of the past year. Markets now believe banks are out of ammunition," he said in a market commentary.
FED SPEAK: Federal Reserve Chair Janet Yellen begins two days of congressional testimony Wednesday that is keenly awaited by markets. Since the Fed decided to raise its key interest rate from a record low in December, the U.S. economy has hit some turbulence. Lawmakers will likely have a lot of questions for Yellen about the future pace of rate hikes and the Fed's role in supporting the U.S. economy.
WALL STREET: U.S. stocks extended a losing streak Tuesday, closing slightly lower after spending most of the day wavering between gains and losses. The Dow Jones industrial average fell 12.67 points, or 0.1 percent, to 16,014.38. The Standard & Poor's 500 slipped 1.23 points, or 0.1 percent, to 1,852.21. The Nasdaq composite lost 14.99 points, or 0.4 percent, to 4,268.76. The latest losses pulled the three indexes further down for the year. The Dow is off 8.1 percent, the S&P 500 is down 9.4 percent. The Nasdaq is off 14.8 percent.
ENERGY: Brent crude, a benchmark for international oils, was up 49 cents at $30.80 a barrel in London. It fell $2.56, or 7.8 percent, to close at $30.32 the day before. It was about $60 a barrel a year ago and $109 two years ago. Benchmark U.S. crude was up 59 cents at $28.53 a barrel in electronic trading on the New York Mercantile Exchange. The futures contract dropped $1.75, or 5.6 percent, to close at $27.94 a barrel on Tuesday.
CURRENCIES: The euro rose to $1.1294 from $1.1289 the day before. The dollar fell to 114.58 yen from 114.95 yen.

Culled from AP

Near-retirees, don't make this common mistake-Steve Vernon

If you're within five years of retirement and haven't yet developed a plan for your retirement paycheck, including strategies to protect it from stock market declines, you might be in for an unpleasant surprise when you finally decide to leave your job. Worse yet, if you're significantly invested in target date funds (TDFs), you could really have a rude awakening.
The problem is many 401(k) plan participants think if they just invest enough money in a TDF, that's all the "planning" they need to do. While that "Look, ma! No hands!" attitude might be sufficient when you're more than five years away from retirement (10 is even better), it's downright dangerous as you near the retirement finish line.
If you decide to invest your savings to generate your retirement paycheck, there's usually a one-to-one correspondence between the change in your account balance at the start of your retirement and the amount of your initial retirement income. For instance, a 10 percent gain in your investment account translates into a 10 percent increase in the part of your retirement paycheck that's generated from that savings.
While that's great news when the market goes up, it unfortunately affects your paycheck if the market goes down. So, a 25 percent drop in the value of your account just before retirement usually translates into a 25 percent drop in your retirement paycheck. Near-retirees in 2008-2009 who were fully invested in TDFs experienced losses in that magnitude.
As a result, many older workers decided to delay retirement, while others were forced to retire on a retirement income that was smaller than they had expected. The significant stock market drop in January of this year is evoking scary memories of the 2008 crash.
A better approach
If you're within five to 10 years of retirement, you should be learning about the various methods you can use to generate a retirement paycheck from your savings, how much income these methods will generate and what their pros and cons are. You should also be developing a strategy for when to start Social Security benefits for yourself and, if you're married, for your spouse.
One effective retirement planning strategy is to decide how much of your total retirement income you want to protect from stock market declines. Common retirement income generators (RIGs) that protect against stock market declines are Social Security, pensions, deferred or immediate income annuities, systematic withdrawal plans invested significantly in bonds and bond ladders.
Many retirees may not need to protect all or even most their retirement income if they can tolerate some fluctuations in their retirement income as an acceptable risk for the potential gain if stocks do well. One way to determine how much of your retirement income to protect is to estimate your essential living expenses and protect most or all of that income. Then invest the remainder of your savings to generate a paycheck that covers your discretionary expenses, such as travel, hobbies and gifts.
A deeper look
A recent report from the Stanford Center on Longevity (SCL) in collaboration with the Society of Actuaries (SOA) analyzed various methods you can use to protect retirement income in the period leading up to retirement. This report demonstrates the trade-off between the predictability of retirement income and the potential for gains from favorable stock market returns. (I was a co-author, with Wade Pfau and Joe Tomlinson.)
One analysis projects retirement incomes under expected, favorable and unfavorable economic scenarios for a married couple, both currently age 55 with $300,000 in savings at that age. They plan to retire and start their income at age 65.
When this couple invests fully in a TDF until age 65 and uses a systematic withdrawal plan (SWP) to generate retirement income, the amount of initial annual income under the unfavorable scenario is 37 percent less than the amount under the expected scenario. Clearly, this couple would experience a significant shock under the unfavorable scenario.
Instead, if the couple fully invested their assets at age 55 in a deferred income annuity (DIA) that starts at age 65, the amount of initial annual income at retirement under the unfavorable scenario is only 15 percent less than the amount under the expected scenario. While a drop of this magnitude isn't good news, it's not nearly as much of a shock as investing in a TDF.
The protection offered by a DIA has a price -- limited upside potential. In the above example, when the couple invests in the TDF and uses a SWP to generate retirement income, the amount of initial income at retirement under the favorable scenario is 62 percent higher than the income under the expected scenario. This would be a very pleasant surprise! The comparable increase using the DIA is only 18 percent.
Another disadvantage of a DIA is that once you commit, usually you can't change your mind and withdraw your money without severe restrictions or penalties, whereas you can always withdraw money from a TDF. As a result, most people won't want to devote a large portion of their savings all at once to a DIA.
The SCL/SOA study also modeled a laddered approach that devotes a portion of savings each year between ages 55 and 64 to buy a DIA that starts income at age 65. This approach projects retirement incomes under the unfavorable, expected and favorable scenarios that are less volatile than the full TDF approach but more volatile than buying the DIA at age 55. So, a laddered approach represents a possible compromise between the two methods.
Low-cost DIAs and immediate annuities aren't commonly offered in 401(k) plans, although you can access these products from an IRA. If you're approaching retirement and your 401(k) plan doesn't offer annuities, or if you're uncomfortable with annuities, an alternative is to determine the portion of your retirement savings (and resulting retirement paycheck) that you wish to protect from stock market declines. Invest those savings in your plan's bond fund or stable value fund, and invest most or all of your remaining savings in stocks. This might well result in a different asset allocation between stocks and bonds than your plan's TDF.
By the way, for the above analyses, the expected scenario is defined as the median scenario under a stochastic forecast. Both the unfavorable and favorable scenarios have a 10 percent chance of happening, according to the forecast. Before you dismiss these scenarios as unlikely, consider that before 2008, a crash of that magnitude was considered highly unlikely.
One more note: All projections of retirement income in the study were adjusted for inflation.
If you feel uncomfortable investigating these strategies on your own, you may want to find a qualified and unbiased financial planner to help you. Nobody said "do it yourself" retirement planning would be easy, but it's certainly better than trying to retire during a stock market crash.

Culled from moneywatch in CBS.

The Contributory Pension favors Millennial – Odunze Reginald C

Who are the Millennial, according to Millennial Legacy, “Millennial are the generation born between 1982 and sometime in the early 2000’s. However, these boundaries aren’t set in stone. Some definitions have the Millennial Generation starting as early as 1978 and starting as late as 1985. Basically, if you born a little earlier than 1982 and you consider yourself to be more Millennial than Generation X, that is your opinion. Or if you were born in or just after 1982 and you feel that you are more Gen X than a Millennial, the same applies. It is really up to the individuals born during the cusp years (late 1970’s to early-mid 1980’s) to decide which generation they feel a stronger connection to”

Continuing it stated that “The digital generation is providing some hope for the retirement crisis. After watching their parents suffer through two major financial bubbles and the weakest economic recovery on record, the majority of millennials are placing money aside for retirement — as long as they have a job.”

By my simple calculation, the first batch of millennial are expected to access their retirement benefit between the period 2039 and 2042. And the real millennials are expected to access their retirement benefit between 2050 and 2060. Will it be enough? Will it match the value of the bond of their predecessors?  This therefore calls for an individual’s calculation of the estimated pension pot based on your expected date of retirement.

Wikipedia noted that “In a defined contribution plan, contributions are paid into an individual account for each member. The contributions are invested, for example in the stock market, and the returns on the investment (which may be positive or negative) are credited to the individual's account. On retirement, the member's account is used to provide retirement benefits. Defined contribution plans have become widespread all over the world in recent years, and are now the dominant form of plan in the private sector in many countries. For example, the number of defined benefit plans in the US has been steadily declining, as more and more employers see pension contributions as a large expense avoidable by disbanding the defined benefit plan and instead offering a defined contribution plan.

Continuing Wikipedia noted that “In a defined contribution plan, investment risk and investment rewards are assumed by each individual/employee/retiree and not by the sponsor/employer and these risks may be substantial. The "cost" of a defined contribution plan is readily calculated, but the benefit from a defined contribution plan depends upon the account balance at the time an employee is looking to use the assets. So, for this arrangement, the contribution is known but the benefit is unknown (until calculated).”

One of the key beneficiaries of the defined contribution scheme has been the millennial, and so what is its impact on the pension. The impact is far reaching as the millennial is believed to contribute more than the generation X. the reason is that they came when pension is well structured having moved from the defined benefit of the National Provident Fund, NSITF  that were products of defined benefit scheme.

Contributions then were small and its attendant problems, it becomes difficult then to have a meaningful contribution , the impact of no data base, corruption and Government inability to provide these fund as at the time of retirement made the scheme to be a nightmare.

But the millennial came during the time of Pension Reform Act 2004 and with the recent amendment leading to Pension Reform Act 2014. The Millennial  are better equipped to benefit from the pension scheme.

Odunze Reginald is the Lead Consultant, Chareg Consulting, a management and marketing  consultant  a social media and social marketing consultant , you can visit our twitter anchors @dunzereg, @regydunze, find us on Facebook @ Reginald odunze and reginaldodunze.com, at google+ @ Reginald Odunze and at Linkedin@reginald odunze.