Q&A: Finding a way out from under big medical bills

Dear Liz: I am so lost. I recently became a widow at 52. My husband didn’t have life insurance. I had to grab a job two weeks after he passed. Five months later, I’m sick with late-stage congestive heart failure and can’t work. I’m barely able to pay my mortgage now with Social Security survivor benefits. I need to sell and rent something cheaper before I lose my home of 18 years. I have to decide between continuing to make the payments and buying medicine and food.

I don’t have health insurance because Medicaid was not expanded in my state and I haven’t been on disability long enough to qualify for Medicare. I owe a lot of money to someone who helped me. I would have been dead without the help, not to mention homeless. My husband left me in a bind.

Answer: I’m so sorry you’re having to deal with all this.

If you’re not already getting help paying for your prescriptions, check out resources such as NeedyMeds.org, the Partnership for Prescription Assistance and the Patient Advocate Foundation’s National Financial Resource Directory. It’s crucial with your diagnosis that you take your medications as prescribed and don’t skip or alter your dosages.

Your medical providers may have charity programs to help pay your healthcare bills, or they might be willing to accept small payments. You may be able to negotiate a discount if you ask to be charged the same rates as your area’s largest insurer.

If you’re on Social Security Disability Insurance, you’ll qualify for Medicare after two years. Without health insurance, though, it may be hard to get the quality care you need to live that long.

You could move to another state that would cover you under Medicaid, but that may not be feasible, given how sick you are. Plus, you may not qualify if you have some equity in your home and you sell it. While your residence is not a countable asset that could prevent you from getting Medicaid, the profits from a sale probably would be.

A housing counselor could help you explore your options, which could include selling, taking on a roommate or getting a mortgage modification. You can get referrals from the U.S. Department of Housing and Urban Development site or by calling (800) 569-4287.

Another option is foreclosure, especially if you don’t have much equity in your home and the foreclosure process is relatively slow in your state. You could use the money that otherwise would go to house payments for living expenses and medicine until you have to move. It’s not ideal, but none of your options are at this point.

Wednesday’s need-to-know money news

Today’s top story: Do your kids a favor and pick retirement savings over tuition. Also in the news: 18 of the best Black Friday deals, Navient’s student loan practices are under fire, and how much it costs to have a float in the Macy’s Thanksgiving Day parade.

Do Your Kids a Favor: Pick Retirement Savings Over Tuition
Looking at the bigger picture.

18 of the Best Black Friday 2018 Deals
Serious savings.

Navient’s student loan practices raise questions in federal audit
Deceptive tactics.

How much does a float in Macy’s Thanksgiving Day Parade cost?
The helium costs will surprise you.

Tuesday’s need-to-know money news

Today’s top story: Having the talk about college costs with your teen. Also in the news: How the new tax law affects vacation homes, what to do when an airline loses your bag, and thinking twice before paying for accident forgiveness.

Having ‘The Talk’ About College Costs With Your Teen
Managing expectations.

How the new tax law affects vacation-home owners
It gets complicated.

What to Do When an Airline Loses Your Bag
Don’t panic.

Think Twice Before Paying for Accident Forgiveness
Premium increases vs. the cost of forgiveness

With money goals, multitasking pays off

Tackling money goals one at a time cost financial literacy expert Barbara O’Neill at least $1 million.

That’s how much O’Neill, a distinguished professor at Rutgers University, figures she lost by starting saving for retirement only after she had created an emergency fund, bought a car with cash and purchased a home.

“I tell students that eventually, 30 years later, I hit the million-dollar mark, but I could’ve had $2 million,” O’Neill says.

Too often, financial experts say, people want to attack their money goals one at a time: “As soon as I pay off my credit card debt, then I’ll start saving for a home,” or, “As soon as I pay off my student loan debt, then I’ll start saving for retirement.”

These folks don’t realize how costly the words “as soon as” can be. In my latest for the Associated Press, paying off debt is a worthy goal, but it shouldn’t come at the expense of other goals, particularly saving for retirement.

Monday’s need-to-know money news

Today’s top story: Smart ways to rein in holiday spending. Also in the news: Budgeting before Black Friday to prevent costly regrets, why you should check travel prices before Black Friday, and 7 things not to buy on Cyber Monday.

Smart Ways to Rein In Holiday Spending
Keeping your expenses in check.

Budget Before Black Friday to Prevent Costly Regrets After
Don’t go in without a plan.

Check Travel Prices Before Black Friday
You could be missing out on deals.

7 things NOT to buy on Cyber Monday
Not all sales are created equal.

Q&A: What to do when your bank gets picky about accepting a power of attorney

Dear Liz: My husband’s brother had a stroke and is now incapacitated. My husband needs to take over his finances. The bank will not accept the durable power of attorney that they set up 14 years ago because it is “too old.” Another bank asked me if it was set up less than six months ago, because that would avoid problems. How can you do the right thing if there are so many obstacles?

Answer: Banks and other financial institutions have gotten so persnickety about accepting powers of attorney that some states have passed laws forcing them to do so — and yet people still report having problems, even in those states!

Many institutions want you to use their own forms, which may not be possible once someone is incapacitated. Even if the person is willing to fill out the form before the fact, using a financial institution’s power of attorney can create problems if the language in those forms contradicts the person’s other estate planning documents. Then there’s the sheer hassle factor, especially if the person has accounts at multiple banks and brokerages.

You may be able to break through this logjam by hiring an attorney to contact the bank. You can get referrals to lawyers experienced in this issue from the National Academy of Elder Law Attorneys.

Q&A: When to merge 401(k) accounts

Dear Liz: I have $640,000 in a previous employer’s 401(k) and $100,000 in my new employer’s plan. Do you recommend I merge the two? Both funds offer similar investment options. My only motivation is based on simplifying paperwork during retirement, although there may be other advantages I am not aware of.

Answer: The choice of investment options matters less than what you pay for them. If your current plan offers cheaper choices, rolling your previous account into your current one makes sense if your employer allows that.

If the previous employer’s plan is cheaper, though, leaving the money where it is can make more sense. Once you actually reach retirement age you can decide whether to consolidate the plans or roll them into an IRA.

IRAs give you a wider array of investment options, but keeping the money in 401(k) accounts has other advantages. Larger 401(k)s often offer access to cheaper, institutional funds that aren’t available to retail investors in their IRAs. A 401(k) may offer more asset protection, depending on your state’s laws, plus you can begin withdrawals as early as age 55 without penalty if you no longer work for that employer.

Q&A: Many factors go into rental choice

Dear Liz: You recently answered a reader who didn’t want to keep and rent out the home she inherited with her brother. You mentioned that if he refused to buy her out, she could go to court to force a sale.

Another option is to hire a property management company to provide a buffer between the siblings but also between them and the tenants. The house will provide a healthy income to both bro and sis.

Answer: Actually, we don’t know that. While Mom-and-Pop landlords can make a tidy profit with single-family homes in some areas, just breaking even is hard in others. In many high-cost areas of the country, rents aren’t enough to cover the considerable costs of ownership, especially if the property still has a mortgage.

Even if it’s paid off, the house could need extensive repairs or be damaged by future tenants. Vacancy rates could be high in that area, and the property management company would still need to get paid. The siblings also will need additional liability insurance to protect against being sued.

The sister could get a much better return from investments that require a lot less from her. Mutual funds don’t call to tell you the roof is leaking or the furnace needs replacement.

The home could turn out to be immensely profitable and still be a bad investment for a sister who’s an unwilling business partner and who resents the brother who refused to buy her out when he had the opportunity.

Friday’s need-to-know money news

Today’s top story: Shopping or skipping Black Friday. Also in the news: Notes from a disabled traveler, how to save money on a cross-country road trip, and how to locate the investment fees you’re paying.

Black Friday: Shop It or Skip It?
The pros and cons.

What I’ve Learned as a Disabled Traveler
Flexibility is key.

How We Saved Money on Our Cross-Country Road Trip
A look at the trip budget.

How to Locate the Investment Fees You’re Paying
Inside the fine print.

Thursday’s need-to-know money news

Today’s top story: 5 tax tips for military members and veterans. Also in the news: How to save $500, how Black Friday prices stack up, and what student loan debt does to people.

5 Tax Tips for Military Members and Veterans
Tracking your expenses.

How to Save $500
Every bit helps.

How Do Black Friday Prices Stack Up?
Real savings or holiday hype?

What student loan debt does to people
It’s not pretty.