The countdown to the 2024 presidential election is ticking away, with under three months to go until November 5. Vice President Kamala Harris named Minnesota Governor Tim Walz as her running mate for the Democratic Party earlier this month. While the public learns more about Walz through his tenure as governor, member of Congress, and US National Guardsmen, what more can be Yahoo Finance senior columnist joins in interviewing Morningstar director of personal finance and retirement planning Christine Benz on Walz's finances and retirement savings, including the fact that Walz does not own a single stock, and thus, his net worth is estimated to be between $112,000 and $300,000.
His current salary is around $127,000 annually, which is higher than the median household income of $74,580, according to the 2022 Census. Because of his jobs as a public school teacher, National Guardsman, congressman, and governor, Walz likely has a pension. Benz notes that roughly 20% of workers have pensions, and one of the benefits of having a government-provided pension is that it is adjusted for inflation.
Yahoo Finance believes Walz's pension to be valued at up to $800,000 when accounting for his long political and military career and his time as a teacher. Benz recommends all Americans save for retirement in tax-deferred compounding accounts, which could be either a government or company provided plan. She also encourages investing accounts alongside pension or retirement account to have extra money in the case of long-term care, or a down payment on a home, for instance.
When it comes to Walz's opponent, JD Vance, Benz notes that he has a much larger portfolio, which she believes is also reflective of a generational divide. "JD Vance is someone who has had a career in the private sector. His investments reflect that.
It appears to be a pretty broadly diversified portfolio. Lots of individual stocks as well as a cryptocurrency position and some fixed-income positions." For more expert insight and the latest market action, click to watch this full episode of Wealth! Video Transcript We're joined now by Christine Ben, who is the Director of Personal Finance and Retirement Planning over at Morningstar.
Christine is also the author of How To Retire 20 Lessons for a happy, successful and wealthy retirement. Christine. Great to have you here with us.
I I wanna get your reaction as well. You just heard our own Carry Han and lay it out uh as to Walt's financial picture there. What is your assessment? Well, Kerry is absolutely right that uh Tim Waltz is one of a shrinking share of our population who is covered by a pension at work.
Uh I think roughly 20% of workers have pensions and the really nice thing about government provided pensions is that they do provide an inflation adjustment to help you uh stay whole with the cost of living increases. Sector pensions typically do not have that. And so they're less valuable.
But I think what's interesting is what Tim Walz doesn't have, which uh it doesn't appear that he has a lot of stock and bond assets that's increasingly uncommon uh to see someone with his income level, not have a portfolio side by side uh with his pension and typically workers, even those who do have pensions have the ability to invest in something of A 401k 403 B and they should avail themselves of those opportunities because you have the opportunity for long term compounding the earlier you get started the better. So Christine, what is he missing here in terms of not having equities and other investments in his portfolio? I understand that he has pension managers running some of that on the side that he has no control over. But from your take, what, what's he missing here? Well, one obvious category would be um having some tax deferred compounding, which you can get in the context of a company or a, a government provided uh retirement plan.
And that's a, a beautiful thing uh to be able to invest and see your money grow, but not owe any taxes on it from a year to year basis. It's, it's not um possible to see whether he has holdings in the thrift savings plan, which is something that government workers uh are able to avail themselves of the TSP the Thrift savings plan is a gold plated retirement savings vehicle. Anyone who has an opportunity to save within it should probably take advantage of it because you do have that opportunity for long term growth.
And you also, you know, if you have a separate silo of assets, even if you're covered by a pension that allows you to do other things with that money so you could cover long term care if you, you should have a need arise or you could, uh, you know, put a down payment on a home or whatever the case might be. You have more flexibility certainly than you have with that pension income. So, Christine, 11 other sort of sidelight here.
He, he actually doesn't own a home. Uh, he sold his home a number of years ago. How big is that? A part of someone's retirement plan having home equity? Well, oftentimes it is people's biggest source of net worth and as people age having that home ownership uh provides a really great hedge against inflation.
We've seen housing costs really go up over the past couple of years. People who own their homes and, and older adults tend to own their homes at fairly high percentages have effectively the hedge against those rising housing costs. So it's uh I I would say a, a pretty rare oversight for someone of his level of wealth.
I can understand why he he might not. But um it is a valuable asset and, and the biggest component of older adults net worth. That is another thing that can be a huge advantage if someone does have a long term care need.
If they say they need to move into a facility to get a higher level of care, the home can be a tremendous asset in that context. And Christine just lastly from what you've evaluated. What about JD Vance? What is the financial assessment of the Republican vice presidential nominee? It's a much larger portfolio.
And I think it's also reflective of a generational divide. JD Vance is someone who has had uh a career in the private sector. His investments reflect that it appears to be a pretty broadly diversified portfolio, lots of individual stocks, uh as well as a Cryptocurrency position and some fixed income positions, but a better diversified portfolio.
It's what I would expect of someone with a higher level of wealth. So, um I don't think a lot of surprises though, I will say that many investors, even those with significant levels of wealth do use exchange traded funds instead of baskets of individual um companies. But it does appear that JD Waltz has some private companies which are not generally investable in the context of a mutual fund or an exchange traded fund.
Interesting. All right, Christine Bens, Director of Personal Finance and Retirement Planning over at Morningstar and thanks to our very own, Carrie Han and you can check out Carrie's story up on Yahoo finance.com.
Thanks so much..
