Break from the Grind February 27, 2018

Tooth Fairy Cash Gifts Dropped in 2017

While the Original Tooth Fairy Poll has typically served as a good indicator of the economy's overall direction, tracking with the movement of Standard & Poor's 500 index for 12 of the past 14 years, the latest poll shows the Tooth Fairy hasn't quite been able to keep up with the market's hot pace.
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From an all-time high of an average $4.66 in 2016, the Tooth Fairy’s cash gifts dropped to an average of $4.13 in 2017, according to the Original Tooth Fairy Poll sponsored by Delta Dental.

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The Original Tooth Fairy Poll has typically served as a good indicator of the economy’s overall direction, tracking with the movement of Standard & Poor’s 500 index for 12 of the past 14 years. The December 2017 poll shows the Tooth Fairy hasn’t quite been able to keep up with the market’s hot pace—with an 11% cash payout decrease from 2016, while the S&P 500 saw a total return in 2017 of almost 18%.

Even though the average price of a tooth dropped, the Tooth Fairy still paid out a healthy $271 million for lost teeth across the nation. Those looking under their pillow for their first lost-tooth payout took far less of a hit, receiving an average $5.70 per tooth, only a minor drop from 2016 which saw a $5.72 payout.

The Tooth Fairy visits 84% of the nation’s households with children. Fifty-five percent of parents confess that the Tooth Fairy may have missed a visit at some time. While the Tooth Fairy leaves money at 95% of the homes it visits, some parents say the Tooth Fairy also leaves a small toy or game (47%), a letter from the Tooth Fairy (35%) or a tooth brush (31%) in addition to or instead of money.

Tooth Fairy payouts are highest in the West with $4.85 ($6.76 for the first tooth), followed by the Northeast at $4.35 ($6.45). In the South the Tooth Fairy gave an average of $4.12 ($5.68), while in the Midwest the average was $3.44 ($4.37).

The Original Tooth Fairy Poll was conducted between December 13 and December 28, 2017, among a nationally representative sample of 1,007 parents of children ages 6 to 12.
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Data and Research February 27, 2018

Millennials Need Help to Save Adequately for Retirement

A report from the National Institute on Retirement Security shows that 66.2% of working Millennials have nothing saved for retirement.

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The retirement outlook for many Millennials is dismal, according to a new report from the National Institute on Retirement Security, “Millennials and Retirement: Already Falling Short.”

The report finds that 66.2% of working Millennials have nothing saved for retirement. While 66% of Millennials work for an employer that offers a retirement plan, only 34.3% are participating in the plan.

The Institute also found that only 5% of Millennials are saving adequately for retirement, which it recommends to be between 15% and 22% of salary.

There is a significant gap between Millennial Latinos and other racial and ethnic groups in terms of participation in retirement plans. Only 19.1% of Millennial Latinos and 22.% of Latinas participate in a retirement plan. By comparison, 41.4% of Asian men and 40.3% of Millennial white women participate in a plan.

Just over four in 10, 40.2%, of Millennials said employers’ eligibility requirements, such as having a minimum tenure on the job or working a minimum number of hours, have kept them from participating in the plan. However, when they are eligible to participate, 90% of Millennials enroll in the retirement plan.

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Twenty-one percent of Millennials are worried about their retirement security. Nearly half, 47%, are worried they will not be able to retire when they would like to, and 67% are concerned they will outlive their savings. More than nine in 10, 92%, say the nation’s retirement system is under stress and needs reform.

The Institute says that Millennials face more challenges than older generations, specifically higher life expectancy, lower income replacement from Social Security and less likelihood that they have a pension. They also have faced depressed wages, high unemployment and structural changes to the U.S. economy, most notably the Great Recession. Thus, the Institute says, they will need to save more than older generations.

The National Institute recommends seven steps to help improve the retirement outlook for Millennials:
  • Expand defined contribution plan eligibility for part-time workers
  • Reduce waiting periods for workers to become eligible to participate in a retirement plan
  • Increase auto enrollment
  • Increase employer matches and default contribution rates
  • Provide education to increase awareness of the benefits of employer matches
  • Promote and educate Millennials about the Savers’ Credit
  • Protect and strengthen Social Security
The National Institute on Retirement Security’s full report can be downloaded here.

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