Spreading Holiday Cheer: Year-End Tipping Guide
Welcome to the Cutting Room Floor, a newsletter where I round up all my personal finance articles, put out exclusive content and interviews, and flag my favorite job listings from around LinkedIn.
Here's a little tip about life: No one really knows what they're doing.
When we're young, we assume grown-ups do. But they don't.
(This knowledge is very freeing, by the way.)
The same is true when it comes to year-end tipping for the important people in our lives. Who should we tip? How much? And if we just don't have extra cash to spread around -- then what?
It's a tricky question, because these are people we interact with all the time -- babysitters, our kids' teachers, mail carriers, hairstylists. You want them to feel valued and appreciated.
To help with all this stuff, Bankrate has an annual survey on the subject. The general vibe: We are so back.
After a tough couple of years with inflation eating into our pocketbooks, the percentage of people who are planning holiday tips is back up -- as are the amounts.
By the way, this doesn't apply to those tip-seeking automated kiosks or iPad screens that drive us all crazy. This is for the real, helpful people in your life.
For Reuters , here is my little guide to help you figure out what to do this holiday season. Special thanks to my old buddy Ted Rossman , as well as national etiquette expert Diane Gottsman of the Protocol School of Texas, and Monique K. for lending her personal insights.
Happy tipping!
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Fun numerical tidbits from my overflowing inbox
3.7%: The safest starting annual withdrawal rate from your retirement funds, according to new research from Morningstar . This, according to their 2024 State of Retirement Income report -- which is lower than the traditional rule-of-thumb you might have heard, of 4% a year. Erring on the side of caution is always good, I guess, if you can afford it. But, a couple of things: The reality is the most Americans don't have such a sizable 401(k) that they can take out such a small amount. And secondly, every year of your retirement isn't going to look the same -- you're more likely to be traveling around and spending more at 65, say, than at 90. Heck, I'm 52 and I'm already pretty tired!
$132,300: The average 401(k) balance reported by Fidelity Investments in its new Q3 analysis. This is a new high, by the way -- and compares to $129,200 in IRAs, and $119,300 in 403(b)s. A reflection of a robust jobs situation, and a stock market that has been on an extended run. (I worry that young investors don't even remember what a bear market looks like -- it's not pretty!!) Fidelity now reports 544,000 401(k)-created millionaires, and 418,000 IRA-created millionaires, so if you're one of those folks -- hey, cheers to you, let's celebrate those wins.
61%: Percentage of people who received a pay boost over the last 12 months -- either because of a raise, or switching jobs, or both, according to a new salary survey from Bankrate . The bulk of pay boosts come from those who stayed in their current position. While that's good to hear, it is down a bit from last year (64%) -- and 59% of people say that their pay has not kept pace with rising household expenses. All in all, it's a job market that can be best described as 'frozen in place,' says Bankrate's economic analyst Sarah Foster .
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"In Test of Adult Know-How, America Comes Up Short," Douglas Belkin , The Wall Street Journal
"What Professional Organizers Know About Our Lives," Jennifer Wilson, The New Yorker
"Being Single Used To Make Me Feel Like a Failure. Not Anymore," Nicola Slawson , The Wall Street Journal
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Recommended by LinkedIn
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Until next time!
-CT