Monday’s need-to-know money news

o-CREDIT-REPORT-facebookToday’s top story: The ten things you need to know about credit scores. Also in the news: Five ways to save in managing your money, why passive income is worth more than active income, and six retirement planning rules for single women.

10 Things Everyone Should Know About Credit Scores
What you need to know.

5 New Ways to Save Big Bucks in Managing Your Money
How to find the lowest fees.

Why Passive Income Is Worth More than Active Income
Passive income just sits back and gets bigger.

Tax Season Is Over, But the Typical American Is Still Working for Uncle Sam
The beat goes on.

6 Retirement Planning Rules for Single Womenking
Making sure you’re prepared for the future.

Q&A: Shifting Roth IRA Broker Fees

Dear Liz: What can I do to stop my broker from deducting trading fees from my Roth IRA contributions, which I make monthly? Let’s say I invest $420 each month, but the broker takes $7, or $84 a year. Shouldn’t this be payable from a separate source so that I can invest the full contribution each year, thus reaping the eventual benefits of compounding the extra $84 sum over a long period of time?

Answer: As you understand, $7 per month isn’t such a small sum when you factor in how much more you’d get over time by investing that money instead of paying it to a broker. If that money remained in your account, you’d have roughly $8,500 more at the end of 30 years, assuming 7% average annual returns.

All investments have costs, of course, but minimizing those costs typically means you’ll create more wealth.

You can ask your broker if there is a way to pay the monthly fee from another account, but any commission you pay would be included in the annual amount you’re allowed to contribute. If your broker isn’t providing helpful investment advice to justify the commission, you can look into ways to invest for less, such as using a discount brokerage.

Q&A: Social Security spousal benefits

Dear Liz: I’m 52 and my wife is 57. I recently retired from the military and will have a small retirement from my new job. When should I take Social Security and when should she take hers? Her letter from the Social Security Administration says that based on her work record, she will receive $88 a month. She has spent most of our married life as a homemaker and caregiver to our children.

Answer: Your wife can’t file for spousal benefits until you file for your own benefit, and that can’t happen until you turn 62 in 10 years.

You may not want to file that early, though, since that would force you to take a permanently reduced benefit. You would be settling for about half of what you could get by letting your benefit grow, which also means a much smaller benefit for your wife should she outlive you.

A better strategy may be for each of you to wait to apply at least until you reach your own full retirement ages (66 1/2 for her, 67 for you).

Your wife would get her own small benefit until you turned 67. At that point, you could “file and suspend.” That means you file so she could get her much-larger spousal benefit, but you would immediately suspend your application so your own benefit could continue to grow.

The “file and suspend” strategy is really helpful for maximizing what married couples can get from Social Security, but the maneuver is available only for those who have reached their full retirement age.

Three years later, when your benefit maxes out at age 70, you can end the suspension and start getting your checks.

It’s especially important for higher-earning spouses to avoid locking themselves into permanently reduced checks. If your wife outlives you, she’ll have to get by on a single check — yours — so you want the amount to be as large as it can be.

Q&A: Filing joint tax return while not married

Dear Liz: Is it possible to file a joint tax return if you are not married but have lived together for more than seven years? We’ve owned property together for nine years.

Answer: What matters to the IRS is how your state treats your arrangement. Most states don’t recognize common law marriages, in which two people live together but don’t have a marriage license. But a few do.

The states that currently recognize common law marriages under some circumstances include Colorado, Iowa, Kansas, Montana, New Hampshire, South Carolina, Texas and Utah, according to the National Conference of State Legislatures.

States that recognize common law marriages entered into prior to certain dates include Pennsylvania before Jan. 1, 2005; Ohio before Oct. 10, 1991; Indiana before Jan. 1, 1958; Georgia before Jan. 1, 1997; and Florida before Jan. 1, 1968, according to the NCSL.

Also, most states do recognize common law marriages from those states where they are recognized, said Mark Luscombe, principal analyst for Wolters Kluwer Tax & Accounting. In other words, if you move from a state where common law marriage is recognized to one where it isn’t, your union may still be considered a legal marriage.

Same-sex marriages are somewhat different, Luscombe said. The U.S. Treasury and the IRS have ruled that same-sex couples who were legally married in jurisdictions that recognize their marriage are considered married for tax purposes, even if the state where they currently live doesn’t recognize their union.

Confused yet? Talk to a local tax pro who can advise you about the status of your arrangement.

Friday’s need-to-know money news

download (1)Today’s top story: The best credit card freebies. Also in the news: Breaking bad money habits, the worst states for retirement, and apps that can save you money while shopping.

8 Credit Cards With Freebies
Perks from the get go.

5 Ways to Break Your Bad Money Habits
Breaking the cycle.

10 Worst States for Retirement
States to reconsider.

The “Cash Back” Apps That Can Actually Save You Money When Shopping
Take your smartphone shopping.

Thursday’s need-to-know money news

Household-Budget1Today’s top story: How a good budget can help you build credit. Also in the news: Avoiding financial scams, tips on managing your elderly parent’s money, and five money rules for a successful retirement.

How Your Budget Can Help You Build Credit
A good budget can help you build a great credit score.

10 Tips To Avoid Common Financial Scams
Don’t be taken advantage of.

Managing Your Mom or Dad’s Money
Taking over a difficult task.

5 Money Rules For A Successful Retirement
How to make your money last longer.

Wednesday’s need-to-know money news

Zemanta Related Posts ThumbnailToday’s top story: It’s tax day! Also in the news: Apps to teach your kids about money, personal loans vs credit cards, and why a good FICO score matters when buying a home.

Time’s Up! It’s Tax Deadline Day
No more excuses!

5 apps to teach your kids about money
Just in time for Financial Literacy Month!

The Pros & Cons Of Personal Loans vs. Credit Cards
It’s all about the interest rate.

The One Graph That Explains Why a Good FICO Score Matters for Homebuyers
The better the score, the better the terms.

Tuesday’s need-to-know money news

bigstock-U-s-Income-Tax-Return-Form-28476797-e1390508229663Today’s top story: How to finish your taxes before the deadline. Also in the news: How to file for a tax extension, when your employer can check your credit, and why you need to pay close attention to your parents’ financial advisors.

The Procrastinator’s Guide to Finishing Your Taxes
The clock is ticking.

How to File for an Extension
Buying some time.

When Can Employers Check Your Credit?
Far less often than you might think.

Hidden Dangers With Aging Parents’ Financial Advisors
Paying close attention is vital.

The Ultimate Tax Day Guide: Post Office Hours, Freebies and Expert Tax Refund Tips
Free shredding!

Monday’s need-to-know money news

Zemanta Related Posts ThumbnailToday’s top story: What to do with a financial windfall. Also in the news: How to financially survive a military deployment, what you should cut back on first if you lose your job, and how to protect your retirement nest egg.

How Not to Blow a Financial Windfall
The yacht can wait.

3 Things Military Wives And Husbands Can Do To Secure Their Finances
Surviving deployment financially.

The Budget Categories To Cut Back on First When You Lose a Job
What you need to immediately cut.

How Retirees Can Build a Portfolio for the Next 30 Years
Protecting the nest egg you worked so hard to create.

Q&A: Credit CARD Act

Dear Liz: I have a business credit card that offers cash rebates. It has an interest rate of 15.24% on purchases and 25.24% on cash advances. I carry balances in each category. Each month the issuer posts my entire payment to my lower-interest purchases balance and nothing to my cash advance balance. I telephoned to complain but I was told that they will not post any payments to my cash advance balance until my purchases balance is completely paid off. I thought that there was a federal regulation that payments had to be posted to the highest-rate debt balance first. Am I mistaken? If not, to which federal agency can I complain?

Answer: There is indeed a federal law that requires payments in excess of the minimum to be applied to the highest-rate balance. It’s part of the Credit Card Accountability Responsibility and Disclosure Act of 2009. But the Credit CARD Act applies only to consumer credit cards — not business cards.

It’s not a good idea to carry a balance on any credit card, but it’s even more dangerous to carry a balance on a card that lacks the consumer protections promised in the Credit CARD Act. Talk to the bank that has your business checking account to see if you can arrange a lower-rate loan to pay off your balances.