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avoid-pitfallsToday’s top story: Retirement planning pitfalls you need to avoid. Also in the news: 2014 scariest credit cards, protecting yourself against credit card hacks, and three proposed changes to Social Security.

The Five Scariest Retirement Planning Pitfalls
Try to swing right over these.

2014’s scariest credit cards
How terrifying is a 36% interest rate?

7 Ways To Protect Against Credit Card Hacks
You can’t afford not to protect yourself.

Congress Proposes Three Changes To Social Security That Make Sense
For a change.

5 Things You Own That Cost More Than $500 a Gallon
You’ll never look at eye drops the same way again.

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Zemanta Related Posts ThumbnailToday’s top story: How to come back from a financial crisis. Also in the news: Simple ways to save for a house, tips on how to avoid ATM fees, and why you may be paying more for your home repair costs.

How to Bounce Back From a Financial Crisis
Slow and steady.

10 simple ways to save for a house
Every bit helps.

5 Ways to Avoid ATM Fees
Don’t give the bank any more than you have to.

Why You Soon May Have to Pick Up More Home Repair Costs
Your homeowners insurance deductible may be on the rise.

3 Spooks That Can Haunt Your Credit
Time for some ghostbusting.

Categories : Liz's Blog
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seniorslaptopMany people have trouble saving anything for retirement. But I hear from a fair number of people who are looking beyond 401(k)s and IRAs for more tax-advantaged ways to save.

Many have maxed out their 401(k)s at work, or had their contributions limited because they’re considered “highly compensated employees.” Some don’t have a workplace plan at all, while others want to save more than IRAs allow. Even catch-up provisions–which allow people 50 and over to contribute an extra $5,500 to 401(k)s and an extra $1,000 to IRAs–aren’t enough for some of these super savers.

So here are options for those who have maxed out and caught up:

Opt for an HSA. Health savings accounts, which are coupled with high-deductible health insurance plans, offer a rare triple tax advantage: contributions are tax deductible, gains grow tax-deferred (and can be rolled over from year to year), and withdrawals are tax free if used for medical expenses. Withdrawals are also tax free in retirement, which makes HSAs a potentially better vehicle for saving than the much-loved Roth IRA. (Some say yes, others no.) Speaking of which:

Consider a back-door Roth contribution. If you make too much money, you can’t contribute directly to a Roth. There is a workaround, according to IRA guru Ed Slott, that takes advantage of the fact that anyone regardless of income can convert a traditional IRA to a Roth. You can read more about the strategy here and the potential drawbacks here.

Start a side business. Small business owners are spoiled for choice when it comes to tax advantaged plans. The options range from SEP IRAs to solo 401(k)s to full-on traditional pensions (and baby, you can save a ton of money in those—as in hundreds of thousands of dollars annually). Talk to a CPA about which plan makes the most sense for you.

Use a 457 plan. These deferred compensation plans are often available to state and local public employees as well as people who work for some nonprofits. Like a 401(k), you’re allowed to contribute pre-tax money. Unlike a 401(k), you don’t get slapped with early withdrawal penalties if you take the money out before age 59 (although you will owe income taxes).

Contribute to a regular brokerage account. There’s no upfront deduction, but investments held at least a year can qualify you for favorable capital gains tax rates. This, by the way, is typically a much better option than variable annuities, which tend to have high costs and limited tax advantages for most people.

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late-payments-depression-400x400Today’s top story: The most depressing number in personal finance. Also in the news: The secret language of finance, the changes coming to IRAs and 401(k)s in 2015, and the money moves you should make by the end of the year.

This Is the Most Depressing Number in Personal Finance
Take a guess.

Translate This! How To Decode The Secret Language Of Finance
Like Rosetta Stone for banks!

IRA and 401(k) Changes Coming in 2015
You’ll be able to contribute more next year.

9 Money Moves to Make Before the End of the Year
Tick tock…

When Refinancing Your Student Loans Can Backfire
Thorough research is essential.

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crop380w_istock_000009258023xsmall-dbet-ball-and-chainToday’s top story: How high your credit score needs to be in order to refinance. Also in the news: Tips on getting out of debt from people who have paid off thousands, ways to save on monthly housing costs, and how to avoid the scariest credit card fees.

What credit score do I need to refinance?
Reaching the magic number.

How to Get Out of Debt: Lessons From People Who Paid Off $100,000
Learning from the masters.

4 Ways To Save On Monthly Housing Costs
Every little bit helps.

The 5 Scariest Credit Card Fees – And How to Avoid Them
Paying even an hour late could cost you big bucks.

8 Online Banks That Let You Skip the Fees, Enjoy the Interest
Thinking outside the branch.

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Q&A: Fraud or forgetfulness?

Oct 27, 2014 | | Comments (0)

Dear Liz: I think I’ve been scammed, but my credit union has decided I’m simply forgetful. I noticed a debit to my checking account that I did not recognize from a merchant I cannot identify. The merchant name appears on my statement as simply “Portland Portland OR.” My credit union can tell me only that it is a used-merchandise store or secondhand store. I questioned the charge by email and replaced my card. Then I got a letter from the credit union upholding the charge, saying that my card and PIN were present at the time of the transaction. I never did learn the merchant’s name. Can this merchant really not be identified? The $10.48 in dispute is unimportant compared with the complete opacity of the supposed purchase. No name, no address, only a day and time. Is this mystery the best the banking system can do?

Answer: Your credit union could identify the merchant by contacting the card network that processed the transaction, but has apparently decided it’s not worth the effort, said Odysseas Papadimitriou, chief executive of Evolution Finance, which operates the CardHub.com card comparison site. You can demand the credit union identify the merchant for you, but there’s reason to believe this transaction is legitimate, he said.

It’s not just because a personal identification number was used, however, since PINs certainly can be stolen. Hackers have compromised keypads at Michael’s stores and Barnes & Noble, among other retail chains, while Target said encrypted PIN data were stolen in its massive database breach.
But the use of a PIN combined with the small amount of the transaction indicates the culprit here likely is forgetfulness rather than an identity thief, Papadimitriou said. ID thieves are unlikely to make one small transaction and then wait, he said.

“They try to extract the max they can before they get shut down,” Papadimitriou said.
Still, your experience should make you think twice about using a debit card for a retail transaction. With debit card fraud, you may have to fight with your financial institution to get the money back, since the transaction comes directly out of your checking account. With credit cards, you don’t have to pay a disputed transaction until the card company investigates.

Categories : Banking, Identity Theft, Q&A
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Dear Liz: My fiancé was married to a wealthy woman for over 10 years. Will he lose his opportunity to use her earnings record as the basis for his Social Security retirement benefits if we get married?

Answer: The short answer is yes. Spousal benefits for divorced people are available only to those who remain unmarried. Many people confuse spousal benefits with survivors benefits. Survivors benefits for widows, widowers and divorced spouses of the deceased can continue after the recipient remarries, but only if the remarriage occurs after age 60.
You shouldn’t assume that your fiancé’s spousal benefits necessarily will be larger than his own benefit. His ex could have been wealthy without being a high earner. Even if she did, 100% of his own benefit could be worth more than 50% of hers. To find out for sure, he needs to contact the Social Security Administration.

Categories : Divorce & Money, Q&A
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Dear Liz: In your column about saving loose change, another reason to keep a couple of coffee cans full of coins is for when we have the “Big One.” ATMs and banks and stores that rely on computers will be down, but loose change and small bills will be spendable.

Answer: Every disaster preparedness kit — which every home should have — should include some cash for emergency spending. But the cash should be in the form of bills, not change, which will add unnecessary weight to your kit if you have to evacuate. A few hundred dollars in bills are easily carried — not so the 20 or 30 pounds of change that make up an equivalent amount of spendable money.

Categories : Banking, Q&A, The Basics
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Energy_vampireToday’s top story: How to reduce your energy bill by killing off “energy vampires.” Also in the news: Tips on lowering your teen’s car insurance, hazards every student loan borrower should know, and what 2015’s retirement fund contribution limits will be.

This Tool Calculates How much You Pay for “Energy Vampires”
Driving a stake through your energy bill.

6 Tips to Lower the Cost of Your Teen’s Car Insurance
Unfortunately, they won’t lower your blood pressure.

6 Hazards Every Student Loan Borrower Should Beware Of
Don’t set yourself up for failure.

IRS Announces 2015 Retirement Plan Contribution Limits For 401(k)s And More
Find out what changes are in store.

The Best Day to Buy Airline Tickets
Start strategizing for holiday travel.

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imagesToday’s top story: How to tackle your financial demons this Halloween. Also in the news: What to keep an eye on during open enrollment, what next year’s cost of living increase will be, and why your tax refund check could be later than usual.

5 Financial Fears to Confront and Conquer This Halloween
Time to put your tough guy mask on.

What to watch for during open enrollment
Keep an eye out for plan changes.

Social Security benefits get another tiny raise
An average of $20.00 per recipient.

IRS Chief Warns of Possible Tax-Refund Delays
Your refund may be a bit late this year.

How Chess Players Can Win at Personal Finance
Thinking several moves ahead.

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