Friday’s need-to-know money news

Today’s top story: Don’t let the extra hour of sun burn your wallet. Also in the news: Strategies to save money each month without sacrificing, why you should embrace classic investing wisdom under President Trump, and how to stop spending impulsively once and for all.

Don’t Let the Extra Hour of Sun Burn Your Wallet
Daylight spending time?

3 Strategies to Save Money Each Month Without Sacrificing
Saving doesn’t have to make you miserable.

Under Trump, Embrace Classic Investing Wisdom
Staying steady.

How to Stop Spending Impulsively Once and For All
Breaking the cycle.

Thursday’s need-to-know money news

Today’s top story: Distinguishing between needs vs. wants and how to budget for both. Also in the news: The pros and cons of an LLC, the bull market’s 8th anniversary, and why you shouldn’t lie on your taxes.

Needs vs. Wants: How to Distinguish and Budget for Both
An important distinction.

LLC: Pros and Cons of a Limited Liability Company
An option for structuring your business.

The Bull Market’s 8th Anniversary in 8 Numbers
8 remarkable facts.

Tempted to lie on your taxes? Here are 4 reasons you shouldn’t
Not worth the risk.

Wednesday’s need-to-know money news

Today’s top story: 12 tips to cut your tax bill. Also in the news: Why Millennials shouldn’t forget about estate planning, 7 amazing things to be after you die, and the U.S. cities with the highest credit scores.

12 Tips to Cut Your Tax Bill
Itemizing is key.

Millennials, Don’t Forget Estate Planning
Putting it off could be a huge mistake.

7 Amazing Things to Be After You Die
A firework!

The U.S. cities with the best credit scores
Is yours on the list?

9 bills where you can cut a better deal

The word “bills” used to be synonymous with “fixed expenses.” But there’s nothing fixed about many of the bills a typical household pays today.

Some bills have introductory rates that expire, shooting monthly costs skyward. Others offer secret discounts or upgrades to those in the know. Providers constantly tweak their plans and pricing, which means long-term customers can overpay by hundreds of dollars a year.

In my latest for the Associated Press, a look at 9 bills where you can negotiate a better deal.

Tuesday’s need-to-know money news

Today’s top story: What immigrants earn in each state and how much they send abroad. Also in the news: Steps to reach your savings goal, why you should tread carefully in the broker wars, and why your financial planner should be a fiduciary.

What Immigrants Earn in Each State and How Much They Send Abroad
The true numbers.

To Reach Your Savings Goals, Take These Steps
You can do it!

Tread carefully in broker wars
The consumer war isn’t a sideshow.

This Video Explains Why Your Financial Planner Should Be a Fiduciary
Rule changes.

Monday’s need-to-know money news

Credit report with score on a desk

Today’s top story: Finding which tax credits you qualify for. Also in the news: New rules could mean lower life insurance rates, why you shouldn’t fear your mobile wallet, and all the credit card companies that offer free access to your credit score.

What Tax Credits Can I Qualify For?
Saving the most money possible.

New Rules Could Mean Lower Life Insurance Rates
New state laws could lower your rate.

Don’t Fear Your Mobile Wallet
It could be the safest way to pay.

All the Credit Card Companies That Offer Free Access to Your Credit Score
Checking your score is absolutely essential.

Q&A: Fees can do serious damage to your retirement

Dear Liz: When I changed jobs, I rolled my 401(k) account into an IRA and took it to a financial planner. He invested it initially and now has a management company watching it. So now I am paying quarterly fees to him, the management company and the IRA custodian. The fees average about $2,000 a year. I am thinking about moving my account to my current 401(k), which has lower fees.

I feel like the planner has me in way too many investments, and my returns aren’t great. My account is up about $40,000 on a $122,000 initial investment. I will be 60 this year and plan on working for another six-plus years.

Answer: If your employer accepts IRA transfers — and many do — then rolling the money into your current 401(k) could be a great way to go.

Many 401(k) plans offer ultra-low-cost investment options that aren’t available to retail investors. Many also offer target date funds that would take care of diversifying your investments while making sure the mix gets more conservative as you get closer to retirement.

Right now you’re paying above-average fees to get below-average performance. If you had put your money into a low-cost option such as the Vanguard Balanced Index Fund five years ago, your account would now be worth nearly $190,000. The expense ratio for the balanced fund can be as low as 0.08%, compared with the 1.23% you’re paying now. (Your actual cost probably is higher; you didn’t include the expense ratios of the underlying investments in your account.)

Fees matter a lot. Higher fees depress returns and can increase your chance of running short of money in retirement.

At the same time, the years just before and after retirement are crucial because you’ll be making a lot of decisions with major consequences (such as when to claim Social Security and how much to withdraw from retirement accounts). Paying 1% in fees could make sense if you were getting comprehensive financial planning advice that addressed your retirement planning needs as well as other aspects of your finances, such as insurance, taxes and estate planning. If all you’re paying for is investment management, though, you can get that for a lot less.

If your employer doesn’t accept transfers or doesn’t have low-cost options, you could consider transferring your IRA to a custodian that offers low-cost computerized investment services. These include Betterment, Wealthfront, Vanguard Personal Advisor Services and Schwab Intelligent Portfolios, among others. The all-in fee for their services, including expense ratios of underlying investments, is typically less than 0.5%.

If you do opt for less expensive investment management, you still should consider hiring a fee-only financial planner before you retire to review your plan. You can find fee-only planners who charge by the hour at Garrett Planning Network.

Q&A: How to avoid triggering gift taxes

Dear Liz: Is it possible to make student loan payments directly toward our son’s lender without them being considered a gift and thereby subject to the gift tax after a certain amount?

Answer: No. But gift taxes aren’t an issue for the vast majority of Americans. You and your spouse would have to give away more than $10 million for gift taxes to be triggered.

You don’t even have to file a gift tax return if the amounts you give are under certain annual limits. The annual gift exclusion in 2017 allows you to give away $14,000 per recipient without having to file a gift tax return, so the two of you could pay $28,000 of your child’s loans without informing the IRS.

Only the amounts above $14,000 count toward the gift tax, and gift tax is owed only when those excess gifts total more than a certain amount, which in 2017 was $5.49 million.

When gift taxes are an issue, there are some workarounds. In addition to the annual gift tax exclusion amounts, people can pay an unlimited amount of someone else’s medical expenses or tuition without triggering gift taxes — as long as the payments are made directly to providers. In other words, the tuition checks need to be made out to the college bursar, not to the child or to another creditor. Paying student loans isn’t included in that unlimited exemption.

Friday’s need-to-know money news

Today’s top story: How to lower your internet bills without cutting the cord. Also in the news: How to write a business plan, when it’s okay to splurge, and how to save money on groceries by keeping a food waste list.

7 Ways to Lower Your Internet Bill
Without having to cut the cord.

How to Write a Business Plan, Step by Step
Making the first move.

Ask Brianna: Is it Ever OK to Splurge?
When to treat yourself.

Keep a Food Waste List to Save Money on Groceries
Don’t let your money spoil in the fridge.

Thursday’s need-to-know money news

Today’s top story: The Marriage Penalty could be the reason for the increase in your tax bill. Also in the news: Why credit card over-limit fees are virtually extinct, when you’re mad enough to switch banks, and a beginner’s guide to money management.

Tax Bill Going Up? It Could Be the Marriage Penalty
Congratulations!

Why Credit Card Over-Limit Fees Are ‘Essentially Extinct’
Disappearing like the dinosaurs.

Are You Mad Enough to Switch Banks?
Have you reached your limit?

Hack Your Finances in One Day: A Beginner’s Guide to Money Management
Time to get started.