Thursday’s need-to-know money news

Today’s top story: Beat the retiree crowds to these 5 places abroad. Also in the news: Better options for student loan repayments, the pros and cons of travel loans, and why millennials are piling up debt to keep up with their friends.

Beat the Retiree Crowds to These 5 Places Abroad
Before they become popular.

Student Loans: Are You Making Repayment Harder?
Finding better options.

Fly Now, Pay Later: Are Travel Loans a Good Deal?
Convenience comes at a cost.

Millennials Pile Up Debt To Keep Up With Their Friends, Survey Finds
FOMO.

Wednesday’s need-to-know money news

Today’s top story: 5 great ways to invest your tax refund. Also in the news: How to say no to being a bridesmaid, when to upgrade at the gas pump, and how to decode your financial aid letters.

5 Great Ways to Invest Your Tax Refund
The best ways to put your windfall to good use.

Ask Brianna: How to Say No to Being a Bridesmaid
While keeping your friendship intact.

Premium and ‘Top Tier’ Gas: When to Upgrade at the Pump
When the higher octane is necessary.

How to Decode Your Financial Aid Letters
Deciphering your offers.

Tuesday’s need-to-know money news

Today’s top story: What really happens if you don’t pay your taxes by April 17th. Also in the news: Getting tax audit help might be easier than you think, are you the right person for a do-it-yourself house kit, and 6 great TV episodes to watch after paying your taxes.

What Really Happens If You Don’t Pay Your Taxes by April 17
Cue the penalties.

Getting Tax Audit Help Might Be Easier Than You Think
Your tax software can help.

Are You Built for a Do-It-Yourself House Kit?
Do you have what it takes?

6 Great TV Episodes to Watch After Paying Your Taxes
Join The Honeymooners, Archie Bunker and Homer.

Beat the retiree crowds to these 5 places abroad

Coronado in Panama once had pristine beaches and not much else. Today the resort town is a haven for U.S. and Canadian retirees, with strip malls, fast-food joints and a lot of people speaking English.

“For all the world, it’s like you’re in a U.S. beach town,” says Kathleen Peddicord, publisher of Live and Invest Overseas, a site and newsletter for people who want to work, invest or retire abroad.

That kind of retirement destination appeals to many who are looking for an established expatriate community where they may not have to learn another language, says Dan Prescher, a senior editor at International Living, another site for people interested in life abroad. Places like Coronado or Boquete in Panama, Puerto Vallarta or Ajijic in Mexico and Ambergris Caye island in Belize have been welcoming North American retirees for years.

If you’re looking for places before they become popular, however, you may need to be even more adventurous than the typical expat. In my latest for the Associated Press, the next hot retirement destinations abroad, where couples can live comfortably on less than $2,000 a month.

Monday’s need-to-know money news

Today’s top story: How not to run out of money in retirement. Also in the news: How bountiful is tax-loss harvesting, what the (almost) end of credit card signatures means for you, and how your spouse’s student loans affect you.

How Not to Run Out of Money in Retirement
Making it through the long haul.

How Bountiful Is Tax-Loss Harvesting?
A gimmick or an advantage?

What the (Almost) End of Credit Card Signatures Means for You
Less time at the register.

How Your Spouse’s Student Loans Affect You
Everything from taxes to mortgages.

Q&A: What’s better, collecting Social Security early or blowing through retirement savings?

Dear Liz: I am married and six months away from my full retirement age, which is 66. I have not filed yet. My wife started collecting Social Security at 62 but does not get very much. We are both in excellent health and have longevity in the genes. We don’t own a home. I have around $960,000 in diversified investments. I take out around $7,000 to $8,000 a month to meet my monthly expenses. Fortunately, the markets have been good, helping my portfolio, but I am not counting on that to continue at the same pace.

Doesn’t it make more sense to be taking less money out each month by starting Social Security now? I know I would receive less money than waiting until 66 or later, but between my check and the spousal benefit my wife could get, I would reduce my annual living expense withdrawals from my account by close to 50%. This would give my portfolio more opportunity to grow, since I will not be taking out so much every month.

I wish I could cut my expenses or could earn more income but cannot at this point. I am shooting for not taking more than 5% a year out of the portfolio going forward.

Answer: You’re right that something needs to change, because your withdrawal rate is way too high.

You’re currently consuming between 8.75% and 10% of your portfolio annually. Financial planners traditionally considered 4% to be a sustainable withdrawal rate. Any higher and you run significant risks of running out of money.

Some financial planning researchers now think the optimum withdrawal rate should be closer to 3%, especially for people like you with longevity in their genes. Chances are good that one or both of you will make it into your 90s, which means your portfolio may need to last three decades or more.

So even if you start Social Security now, you’ll need to reduce your expenses or earn more money to get your withdrawals down to a sustainable level.

Generally, it’s a good idea for the higher earner in a couple to put off filing as long as possible. The surviving spouse will have to get by on one Social Security check, instead of two, and it will be the larger of the two checks the couple received. Maximizing that check is important as longevity insurance, since the longer people live, the more likely they are to run through their other assets. Your check will grow 8% each year you can delay past 66, and that’s a guaranteed return you can’t match anywhere else. In many cases, financial planners will suggest tapping retirement funds if necessary to delay filing.

But every situation is unique. Your smartest move would be to consult a fee-only financial planner who can review your individual situation and give you personalized advice.

Q&A: The ins and outs of inherited IRAs

Dear Liz: I have questions about inherited IRAs. A friend has designated me and three others as beneficiaries of her IRA. Is this to be considered community property with my husband? How can I inherit this as “sole and separate property”? Must taxes be paid on this? Also, may I give gifts of cash to relatives beforehand rather than naming them as recipients of my IRA and burdening them with taxes? If I do not name survivors to my IRA, what happens to my hard-earned money after I die?

Answer: Inheritances are considered separate property in every state, including community property states. If you commingle the funds — by depositing a withdrawal in a jointly held checking account, for example — then that money potentially becomes community property. You should consult a tax pro or financial planner about the rules governing non-spouse inheritors, since they’re somewhat complicated. You’ll pay income taxes on withdrawals from regular IRAs you inherit, but typically not from Roths.

You’re welcome to give anyone as much as you want, and they won’t have to pay taxes on the gift. You could owe taxes if you give away enough money, but that’s unlikely. You have to file a gift tax return if you give more than $15,000 per recipient in a given year, but you won’t actually pay gift taxes until the amounts you give away over that annual exclusion limit exceed your lifetime limit, which is currently $11.2 million.

If you’re concerned about taxes, though, naming people as IRA beneficiaries is often a smarter tax move than not doing so and having your estate inherit the money.

If your estate is the beneficiary, the money typically would have to be paid out to your estate’s heirs — and taxed — faster than if specific people were named. Your heirs might have to empty the account within five years, or the IRA custodian may opt to distribute the whole amount to the estate in one taxable distribution. Naming people, on the other hand, may allow the option of stretching the IRA, which means taking distributions over their lifetimes. The tax-deferred money that remains in the account can continue to grow. This is another topic to discuss with your advisor.

Friday’s need-to-know money news

Today’s top story: 12 freebies and deals for Tax Day 2018. Also in the news: 3 ways parents can help grown kids own a home, why your parents’ financial advice is probably wrong (for you), and what you should know about getting an advance on your tax refund.

12 Freebies and Deals for Tax Day 2018
A little something to ease the pain.

3 Ways Parents Can Help Grown Kids Own a Home
Ground rules are important.

Your Parents’ Financial Advice Is Probably Wrong (for You)
However well-intentioned.

Thinking about getting an advance on your tax refund? Here’s what you should know
Watch for hidden fees.

Thursday’s need-to-know money news

Today’s top story: 4 ways to curb your online shopping enthusiasm. Also in the news: 13 last-ditch ways to avoid the poorhouse in retirement, why you should freeze your child’s credit, and 8 inspirational stories of people who overcame debt.

4 Ways to Curb Your Online Shopping Enthusiasm
Back away from the mouse.

13 Last-Ditch Ways to Avoid the Poorhouse in Retirement
There’s still time.

Why You Should Freeze Your Child’s Credit
Identity theft starts early.

8 inspirational stories of people who overcame debt
Learning from those who have been there.

Wednesday’s need-to-know money news

Today’s top story: 5 ways to mute the “buy now” appeal in infomercials. Also in the news: What you need to know about investing in IPOs, 3 smart ways to supercharge your travel rewards, and what to know about income-driven student loan repayment plans.

5 Ways to Mute the ‘Buy Now’ Appeals in Infomercials
Don’t reach for your wallet.

What You Need to Know About Investing in IPOs
The risks and rewards.

3 Smart Ways to Supercharge Your Travel Rewards
Rack up more miles.

What to Know About Income-Driven Repayment Plans
For those with high student loan debt and low income.