Monday’s need-to-know money news

401k-planToday’s top story: How to choose the right 401K plan. Also in the news: Money losses you can’t claim on your taxes, the benefits of prepaying your mortgage, and how to survive living on a budget.

Do You Have the Right 401K?
Picking the plan that’s right for you.

These Money Losses Won’t Help You at Tax Time
Losses you can’t write off.

Should You Prepay Your Mortgage?
Prepaying could put more money in your pocket.

5 Strategies That Make it More Fun to Live on a Budget
It doesn’t have to be miserable.

Friday’s need-to-know money news

Today’s top story: The benefits to joining a credit union. Also in the news:Image9 When to sign up for a financial advisor, apps that will make next year’s taxes easier, and how to build your credit from the ground up.

6 Perks You Can Get at a Credit Union
Free checking!

When To Sign Up A Financial Advisor
Knowing when it’s time.

10 Apps to Use Now to Make Taxes Easier Next Year
Help is just an app away.

6 Ways to Build Your Credit From the Ground Up
Needing credit to get credit.

6 Ways You’re Cheating on Your Budget
Removing your hand from the cookie jar.

How you can benefit from the robo-advisor price war

iStock_000014977164MediumDigital investment advisor Wealthfront snagged some headlines this week by dropping its minimum investment from $5,000 to $500 and calling out its competitors, particularly Betterment, for charging too much.

Which is kind of unfortunate, because it could leave people with the impression that Betterment is gouging people, when it (like most of the other robo-advisors) charges a fraction of what other advisors do, and Betterment has no minimum investment requirement.

Betterment’s charge ranges from .15% to .35%. On accounts under $10,000, Betterment charges a minimum monthly fee of $3 unless investors set up auto-deposit. Wealthfront manages the first $10,000 you invest for free, and charges one-quarter of one percent (.25%) above that.

By contrast, many human advisors charge 1%, or even more, to manage investments. If you’re not familiar with robo-advisors, you can read about them here and here.

Roboadvisors, in other words, are providing the cheap, conflict-free investment management that many people, especially those without big portfolios, have been waiting for. They’re even a possible lower-cost solution for those with big portfolios, now that Vanguard is offering a robo-advisor service paired with access to human financial advisors for a .3% annual charge.

If you’re intrigued by the idea of low-cost investment management, don’t let a little dust-up between competitors dissuade you. Check out your options and make up your own mind.

 

Thursday’s need-to-know money news

thumbs_up_mature_woman-resized-600Today’s top story: Phone calls that can save you money. Also in the news: How to slash your tax liability in retirement, handling the financial challenges of caring for aging parents, and a guide to repaying your student loans.

4 Phone Calls That Can Save You a Ton of Money
Savings could be just a quick phone call away.

5 ways to slash your tax liability in retirement
Keeping more money in your pocket.

How to handle the financial challenges of caring for aging parents
Navigating through tough waters.

The A-to-Z Guide to Repaying Your Student Loans
All your repayment options.

Would you trust a robot with your finances?
But still no flying cars.

Wednesday’s need-to-know money news

Zemanta Related Posts ThumbnailToday’s top story: How you could save $200 a month on your mortgage. Also in the news: How making the minimum payments on a credit card bill could take decades to pay off, why you should pay cash for your new car, and what to review during your annual financial checkup.

Millions of Homeowners Could Be Saving $200 a Month on Their Mortgage
Playing the HARP.

How long does it take to pay a $2,000 credit card debt with minimum payments?
The answer may surprise you.

Should You Pay Cash for Your Next New Car?
The argument for paying cash.

3 Steps for Your Annual Financial Checkup
What’s up for review?

Tuesday’s need-to-know money news

1403399192000-retire-workToday’s top story: The important ages for retirement planning. Also in the news: How to rebound from a credit setback, signs you might be a victim of identity theft, and what your car rental insurance might not cover.

9 Important Ages for Retirement Planning
Marking the milestones.

8 Ways to Rebound From a Credit Setback
Don’t panic.

10 Signs You Might Be a Victim of Identity Theft
How to catch the problem early.

What Your Credit Card Rental Car Insurance Might Not Cover
Something to keep in mind while traveling this summer.

How to Choose a Life Insurance Company: 5 Questions to Ask
How to be sure you’ve picked the right one.

Monday’s need-to-know money news

Offering AdviceToday’s top story: How to get rid of an old debt. Also in the news: Living on half of your income, how to get yourself in good financial shape, and dealing with the debt of a loved one that passed away.

The Secret Way to Get Rid of an Old Debt
Resolving an old collection account.

The One-Year Shopping Ban: How This Woman Lived On Just 51% Of Her Income
Could you do it?

Get fit: How to improve your financial fitness
Like Crossfit for your wallet.

Debt and Dying: Five Things Surviving Family Members Need to Know
Protecting your finances while grieving.

Q&A: Student loan forgiveness

Dear Liz: I have $105,000 in medical school loans with an interest rate of 2.875%. I have another consolidated federal loan at 6%. I’m making $180,000 in the private sector and like my job.

Should I consolidate everything, try to get a public sector job, and apply for loan forgiveness after 10 years while paying as little as possible? Or should I accelerate my loan payments?
I would be able to pay almost the full amount after 10 years. I’m also trying to save for a house in a high-cost area. I have about $110,000 in savings and stocks.

Answer: Why would you upend your life to qualify for help you don’t need?

Loan forgiveness and federal income-based repayment programs are intended for those struggling to pay their education debt. These programs are available only for federal student loans, by the way.

The low interest rate on your medical school loans indicates that those are private student loans, which wouldn’t qualify for the relief programs or for a federal consolidation loan, for that matter.

So the question really is whether you should pay your loans off over time or try to retire them as quickly as possible.

A slower repayment schedule could allow you to buy a home sooner and save more for retirement, which are both worthy goals. Faster repayment could lower the overall cost of the debt and leave you less vulnerable to rate hikes, since the interest rates on private student loans are typically variable.

There’s no single right answer, but it’s a good question to discuss with a fee-only financial planner who can assess your entire financial situation and explain your options.

Q&A: Credit scores and new accounts

Dear Liz: My spouse signed up for a store credit card to receive a discount on a large purchase. As she has no strong interest in maintaining a line of credit there, is there a simple way of discontinuing this account without affecting our credit scores, given that we may apply for a mortgage in the near future?

If not, is it critical we maintain some frequency of use on this account?

Answer: First, let’s correct a popular misconception that marriage somehow combines your credit records. Assuming she applied for the card in her name alone, this account won’t show up on your credit report or affect your scores.

Should you apply for a mortgage together, however, her scores could affect the interest rate and terms you get. Opening and closing accounts can ding scores, so it’s best to avoid both when you’re in the market for a major loan.

Issuers vary in their policies on closing inactive accounts, so it’s hard to predict how much activity would prevent the card from being shut down. Typically, though, a small charge every two to three months is enough to keep an account open.

Q&A: Social Security spousal benefits

Dear Liz: I started my Social Security benefits at 66 and am now 70. I was married for 23 years and have not remarried.

When I ask about spousal benefits, I am told that my own monthly benefit is too high to get benefits based on my ex’s work record. My monthly benefit is only $1,509, my 401(k) has tanked, and I am surviving on less and less available part-time work.

I was told further that I can apply once my ex passes away and then it won’t matter how high my income is. Could that be correct? What is the exact cut-off amount to get spousal benefits?

Answer: Many people misunderstand the way spousal benefits work, and they think that they can get an additional check on top of their own retirement benefit. That’s not quite how it works.

Essentially, Social Security compares the amount of your retirement benefit with what you would get as a spouse or divorced spouse and gives you the larger of the two. Spousal benefits are up to half of what your spouse or ex receives.

If your ex’s benefit is $2,000 a month, for example, your spousal benefit could be $1,000, which is less than you’re getting now. If your ex dies, however, you can apply for a survivor benefit that equals what he or she received — in this example, $2,000 a month.