tv On the Money KOFY March 18, 2018 7:30pm-8:00pm PDT
hi, everyone. welcome to "on the money." i'm becky quick. america's retirement crisis, how one state is brewing up a new plan to fix it and why it could be the model for the rest of the country. could your next car or can of soda cost you more? how bad will i will the tariffs hit your wallet. >> relax, really. mindfulness at work can pay off for businesses and kpees. and teaching inner city kids of ins and outs of investing in real estate with real star power. j-lo, a-rod and a fau of the dreams that could turn into reality. "on the money" starts right now. >> announcer: this is on the money. your money, your life, your future. now becky quick. we begin with retirement. as pensions have largely
disappeared and smuggle businesses unable to afford retirement plans for many queues. millions are left on their own to save. but a new push by some states is making it easier. that's our cover story this week and sharon epperson has more. >> the beers we have on tap are on top. >> when the smuggle business owner zaded to go from a career in biology to beer his focus was crafting the perfect pint, gifting employees way to save for retirement may have been a goal. but not one allison was able to brew up on his own. >> you spend a lot of time and energy working with these people, developing relationships. and they become family. and you really want the best for them. you want them to be able to provide for themselves later in life. >> now thanks to a program that is the first of its kind in the country employees at reach break brewing are given the chance to save for their future true a state-run retirement plan called oregon saves. >> we're giving small businesses the same kind of opportunities
that some of the larger businesses have, low had been-cost sachgs for employees at no cost to the employers. >> about 5 a million american workers in the private sector are not offered a 140rk plan through the employer. most of them, 32 million work in smuggle business was fauer than 100 employees. >> some say why is that a problem? study after study shows that people are 15 times more likely to be saving for retirement if they're offered access through their employer. >> oregon saves requires employers not offering a 401(k) to automatically deduct 5% of the wages and send to an ira. workers can contribute a maximum of $5,500 a year. the plan is managed by the state and workers must opt out to not participate. but many given the chance are doing it. >> we have about 5,500 people
actively contributing to their accounts at this point. there are about 20,000 who are somewhere in the process when their pay periods take place. and in the end we expect that there will be about a million people who could potentially participate. >> reach break's tap room manager chris myrhhle abcing five% of wages to his plan says this is the first time he saved for retirement. >> it's always something in the back of your mind but you use the youth as an excuse, and say, i can just always do that later. and you know, now it's later. >> critics say there is too much paperwork for companies already offering 401(k) plans. yet more states are following oregon. seven have enacted legislation for their own retirement plan was illinois and california expected to roll out theirs this year. another 24 states have introduced legislation to start their own retirement plans. >> we are hopeful that other states will see the success that oregon is having in designing
and rolling this program out and make similar programs available in their states. >> josh allison hopes offering a retirement plan will attract the best employees who will help ensure customers come back. >> one thing that the savings plan will allow us to people will be able to view this as a long-term career rather than just stepping stone. >> cheers. >> programs like oregon saves aren't going to solve the retirement crisis on their own. with the current contribution limit of $5500 a here works need to find other ways to save. but advocates say it's a step in the right direction being becky. you know it sounds like a great idea. is there anydown side to any of this. >> there are some critics. some say it may be kwoftly to set up or more costly than expected. that there could be some difficult with adhering to the government rules whether irs rules and also they want to make sure it's not on russ oh on some
small businesses to try to have the responsibility. >> the right approach to sochlg the retirement crisis. joining us right now is sarah gill of the aarp and thank you for being here today. >> thank you for having me. >> you know, how big is the retirement crisis? why do you think states like oregon are taking it upon themselves to do something? >> well it's a really big issue that the country is dealing with today. recent aarp research shows 55 million americans doesn't have a way to save for retirement out of their regular paycheck every day. as you heard in the piece that's really important because they're 15 times more likely to save just by having access out of the regular paycheck. >> how important do you think it is for people to be able to save for retirement through the employer? how key is that? >> it's vital. what we know today is that roughly 40 million americans don't have anything saved for retirement at all. and in fact the average amount of money people put away is only
about $2,500. what we know is that one out of every two households at risk for financially insecure retirement. yet we can fix that by giving people access to payroll index o deduction at work. >> critics say the mandated plans may not be the best option and it offers limited option. do you think it's better up to the private market or states should get involved like this? >> that's a great question. my answer is that this is a private market solution. these programs going to be run very similarly to a college savings plan like a 529 plan but for retirement. so they're all run through public/private partnerships. and the employer has the right to go outen a open any program of their choosing. >> what do you think about the opt-out idea versus opting in. >> opting out versus in is really important. we mentioned earliyer that people are 15 times more likely to save if they can do so out of the regular paycheck. but beyond that it's 20 times
more likely if these plans at work use automatic enrollment. >> for the person that says i have too many other pressures whether students loans, trying to save money for a downpayment for a house. medical bills. there are reasons people don't save. what would you say to them. >> there are a lot of reasons. and i think it's really important to take into account all the pressures on the family budget. but i will say that saving early really saves money down the line because it's compound are interest. anything you put away today is better. don't get put off by think bag it in the big firkt sense try to put a little bit away today. >> is there a general number people should be thinking, look is it a 5%, 10%? what's the idea in terms of the multiple of currently salary. >> in terms of having a financially secure retirement, generally experts say you should anticipate saving so that you can spend 70% of the time sal ary or 12 times the total amount of the final salary. >> one more time i'm not sure i
understood that do what. >> you should expect to spend 70% of working income in retirement every year. when you add that up that looks like 12 times the final salary. that number can be intimidating. we suggest people take smaller boits of the apple and save five% or six% every paycheck. >> thank you for joining us today. we really appreciate it. >> sure. thank you for having me. now here is a look at what's making news heading into the new week "on the money." a toy story with a sad ending. toys "r" us is closing all or selling remaining 800 stores across the united states. the company is burdened by $5 billion in debt. also all this competition from online retailers. toys "r" us employs about 3,000 people and the closings will have a big impact on the toy industry as well pl erjts america's shoppers have been taking a breather lately. retail sells fell a tenth of a% well below ektations that's the
third straight month they've fallen. stock market stocks couldn't make up their mind. moving up and down because of the political new news out of washington. concerns about a potential trade war that ebed and flows. the nasdaq set a record on monday, the markets were mixed later in the week. and get ready for more crowded skies. oh, boy, an industry trade group for the airline industry is expecting an all-time high of 150 million passengers to travel on u.s. airlines between march 1st and april 30th. that's a 4% increase from the spring of 2017. and you thought those aisles were crowded now. up next "on the money," why you could spend more when you shop. what tariffs may mean to your wallet and where you feel them. later mindfulness training, what it is, how it works and why businesses may want to give it a try fors employees. look at how the stock market ended the week here.
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it was less than two weeks that president trump announced he would be raising tariffs on foreign steel and aluminum imported into this country. those tariffs are set to start late next week and could cost you. lindsey is the chief economist at a financial group and thanks for being here. >> thanks for having me. >> let's talk about the tariffs. they're increasing tariffs by 25% on steel, 10% on aluminum kbrts but it's not just hitting industrial products. it could be making consumer products more expensive as well. what concerns but this if anything. >> a tariff is essentially a tax for all intents and purposes. we really do expect a price increase on aluminum and steel specifically. but as you mentioned we also look for cost increases on all products that heavily rely on
steel and aluminum as a productive input. so when we talk about from the consumer standpoint pop can maker soup can makers, beer manufacturers, we do expect an increase in price somewhere around two to six cents per you know it. that doesn't seem like a lot. but when we talk about at an annual pace that's hundreds of millions of dollars. >> probably not somebody from buying a six pack but where could it really have an impact. >> well i don't think it will stop them from buying the six pack. they may cut back and switching from chick ton beef or other switches in the grocery basket. >> is there a list of winners and losers this creates? how do you line up the list of winners and loosers. >> from the trump administration perspective the intention was to provide proekts for the steel and aluminum industry. and you are talking about a couple hundred thousand jobs that see increased protection in
the u.s. and maybe some additional job creation in the sectors. but on the other hand you are talking about increasing prices and potentially squeezing out workers from other sectors that are relying on the inputs. and there you are talking about millions of workers. so certainly the potential loss offsetting the potential gain from these tariffs at this point. >> is there anything good that you see in the entire situation? could it be used as a negotiating tactic to tray and get better deals with some of our trading partners? >> well it could. and we're already seeing that as we enter into the last round of nafta negotiations. but i think when you look for a silver lining of the tariffs we have to remember there is a national security component. this is in part how the trump administration was selling it. we want to make sure we have a minimal manufacturing base here in the u.s. to protect domestic interests, particularly during a war-time economy. it's important that we do have certain protections in place. and for those fs of us that get on our high horse thinking the tariffs are against the
traditional american stance of free trade. we have to remember we have over 1,200 tare i was already in place on everything from cores ets to aspargz. >> corsets people still where those. >> with the high tare i was demand decreased. >> that's not the only reason. lindsey very quickly is this the beginning of a trade war? >> if we see a follow through with a lot of strong rhetoric that has come out from the overseas partners, and if that translates to the allies taking additional steps against us and which prompts the trump administration to take another round of tariffs, this could escalate into a trade war. but in and of itself strictly targeting aluminum and steel that's not enough at this point. >> thank you for your time great to see you. >> thanks very much for having me. >> um-hum. up next "on the money" more companies thinking outside of the box and letting you get inside your own head. how the practice of mindfulness
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draw the line with roundup®. trusted for over forty years. ♪ ♪ it's the volkswagen "smile, it's spring" sales event, where you will find great deals on award-winning suvs, that are sure to make you smile. with over 40 standard features and with america's best bumper-to-bumper transferable limited warranty. during the volkswagen spring sales event you can't help, but smile. do you know them? uh-uh. do you know them? uh-uh. it's the volkswagen "smile, it's spring" sales event. hurry in and you can get a $1000 bonus on new 2018 atlas or tiguan models. you have heard the word mindfulness. you might think it's about sitting still and meditating. but more companies are bringing mindful techniques into the workplace. leah weiss leads a class on it
at stanford and the. topic of her new book called how we work. thanks for being here today. >> thanks for having me. >> if mindfulness isn't the sitting and meditating and thinks what is it. >> mindfulness is the intentional use of attention. and so we don't have to only do it when we meditate. it doesn't mean we don't think we can do it any time. >> is it as easy as clicking a switch. >> one is anchoring your attention in your body, feeling your sensations in the body, feeling feet on the ground, the chair supporting you, a second one is movement. keeping your attention in your body while you move from one place to another or taking a stretch. and then the third is you can set reminders for yourself while you are working, like change the password to breathe so every time you log in it remind sflu take a deep breath. sounds like the opposite of multitasking. >> uni task something the name of the game.
>> companies are starting to use this. which companies? >> mindfulness has become a $1.1 billion industry. >> wow! >> and 23% of companies have programs. they are seeing what with he know through the research which is that it increases not only health and well being but productivity. companies like aetna have seen that and in the bottom line have a chief minefulness officer and measuring the impact to the tune of $3,000 a year per employee in increased productivity. >> gallop pl poll found through third of employees aren't engaged at work. is that part of what's driving all of this? what if the employees don't want to be engaged? >> employees don't know how to -- what they are supposed to do or how to keep the attention where it needs to be. what people are minding in the leadership development and when they try to create healthier company cultures, if you create opportunities for mindfulness for the intentional use of attention then people get more
done and they also have more well being while doing it. >> you study with the dalai lama. what did you take away from that and how much is incorporated into this. >> i bring in -- i translate what i spent a hundred tais, six months learning in retreats into actionable tools that people can use quickly in their busy lives today. >> i can learn all this from the book. >> you can. >> leahy, i want to thank you for your time today. >> thanks for having me. >> we appreciate it. up next "on the money" a look at the news for the week ahead. and real estate lessons from a-rod and j-lo, why the new yor >> real estate is a way out of the hood. the fastest samsung ever demands t-mobile, the fastest network ever. right now get the new samsung galaxy s9 for half off. ♪ when this guy got a flat tire
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here are the stories coming up that may impact your money this week. on tuesday we'll get a read on the services sector with the philadelphia fed non-manufacturing index. and guess what it's also the first day of spring. yeah! . about time. on wednesday existing home sales for february will be released appear we'll be getting announcement on interest rates from the federal open market committee. the fed is widely expected to increase rates. on friday the durable goods report for february will be released and get ready for cuteness overload. it's national puppy day. i smell puppies on set coming next en. efrmts most people in a city
think ofabling as a home but it can be an investment. big time stars helping inner city kids learn process investing in real estate. our diana olick has more on kids swinging for the fences. >> these kids are the bronx aren't heading into a baseball game. they're taking a step toward a brighter future. part of a program called project destined. designed to teach teens the fundamentals of finance. specifically investing in real estate. >> we want to help them understand you can make money from real estate and have a good life from real estate. >> it's the brain child of cedric bobo who launched it two yearsing a in detroit and then brought on former yang ooh legend alex rd rodriguez who run as real estate development firm. he brought to the bronx. >> i was born right down the street in washington heights i loved baseball and i loved business. and real estate is a way out of the hood. >> the kids attended seminars
learning how to value and finance apartment building. >> we had to talk to a lawyer and banker. we also had to talk to a broker. >> four two bedroom amounts. >> then they pitched purchase offers for two building shark tank style to a panel of experts in the yankee board room. including fellow bronx naturive jennifer lopez. >> to teach this to kids who don't have the harvard education or the opportunities is to me beautiful. because it's not just about kind of your life wsh it's about owning your life, it's not owning a property. it's managing everything about your life. >> holding the final competition at yankee stadium one of new york's most iconic pieces of real estate not only draws the kids in but makes it exciting. what's more important to the founders is not just that the kids take a swing at real estate, but that they follow through. >> we give 20% of the profits to to a eye 1 c 3 that issues
scholarships everywhere we issue a scholarship if you continue to be engaged. it's in the classroom and online. >> i never knew i would be able to invest in something so real it's on the market, to now being presented it in front of like millionaires. >> but sometimes million dollar dreams can come true. project destined has established itself now in four cities. and they are definitely not stopping there. they may actually be here in d.c. this summer. plans are no the works. they're talking to people on the ground. real estate investors from the local market that's the important part to get them involved in teaching the kids. becky. >> diana ayou saw in the shark tank style panel lined up. what did you think of the pitches? what did you take away from it. >> it was amazing. they knew all the lingo. cap rates, mortgages, mortgage rates, they had learned so much
in such a short time. and it was really just an honor to work with them and be part of that for a while. >> amazing. thank you for bringing that. great to see you. folks that's the show for today. i'm becky quick. thank you for joining us. next week, tax moves that you should make now before they disappear. each week keep it right here. we're "on the money." have a great weekend. and we'll see you next week.
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