Student Loans | New Businesses & Retiring Well

Student loans & the economy: Currently, there are a total of 45 million people with student loans, and the average monthly student loan payment is around $200. When student loan payments resume in October, it will subtract roughly $9 billion from monthly consumer spending, or $100 billion yearly. This will mainly impact younger households:

Of course, this $100 billion drag on consumer spending will have implications beyond this younger group. Time will tell how far-reaching.

New Business Hotspots: The southeast area of the U.S. is a hotbed of new business activity, home to 9 out of 10 major metro areas with the newest business application per 1,000 residents last year. New business applications are an important measure of an area’s perceived economic health. A lot of people trying to start new businesses in a given city play a big economic role. As of 2021, more than 66.7 million Americans worked for companies with fewer than 100 employees, and those companies posted nearly $3.6 trillion in annual payroll, per census data.

The big picture is even more fascinating. Just over 5 million new business applications were filed nationwide in 2022, or 15.1 for every 1,000 residents. While that seems like a lot, it’s down about 6.6% from 2021, when nearly 5.4 million applications were filed nationwide, or 16.2 for every 1,000 residents. The highest-ranking cities were Miami, Atlanta, and Orlando.

Retiring Well: According to a recent article in the Wall Street Journal, thousands of Americans retire everyday short on cash, friendships, and plans. Many retirees say they realize too late how they could have prepared for a more financially secure and rewarding postwork life. Many say they would have focused on saving more money to cover their higher cost of living. Or they would have invested more time into building relationships, taking care of their health, or cultivating new pursuits.

Retirees say that retirement is so hard to prepare for because we often lack models of postwork life to emulate. Though our culture is full of images of professional success, we are a little hazier on what retirement success looks like and what it takes to achieve. Three lessons that retirees wish they had known:

• Investing in retirement means more than money—retirees don’t often realize how much their sense of identity is wrapped up in their careers. Many fail to grasp the need to plan for a different source of purpose in retirement.
• Relationships are the key to retirement—The Harvard Study of Adult Development notes that the best predictor of longevity, health, and happiness in later life is the quality of your relationships.
• Retirement is longer than you think—working a few more years past 65 can significantly increase your Social Security monthly benefits. Retirees often comment about how many more years they have in retirement than expected.
  If you’re looking for conversations on how to best prepare for retirement, we’re always available to be a voice. We understand it will look different for everyone and are happy to help you think through the various goals and implications we can consider together.

Business Briefing

• Amazon Shares Surge: Amazon reported Thursday that its sales jumped 11% in the second quarter, fueling a big increase in profit compared to a year ago. Sales reached $134.4 billion, up from $121.2 billion a year earlier, surpassing the $131.4 billion analysts expected. The news sent the online retail giant’s stock rising nearly 10% in after-hours trading late last week. Amazon shares had already gained 52% this year, making it one of the tech giants fueling this year’s rally. (Bloomberg)
• Apple Sales Fall: Apple reported Thursday that its revenue fell for the third straight quarter, the iPhone maker’s longest sales slide since 2016. The company reported iPhone revenue that fell short of analysts’ expectations. Apple’s smartphone line is a key profit engine, but net income was up 2.3% annually at $19.9 billion thanks to record revenue of $21 billion from the company’s service unit, driven by paid music and TV streaming and purchases on Apple’s App Store. (The Wall Street Journal)

If you need a laugh …

A cartoon made us chuckle recently … a little funny, a little too close to home, and a reminder that preparing for retirement is multifaceted!