Thursday’s need-to-know money news

phone-scammerToday’s top story: How to tell if that IRS tax collection call is fake. Also in the news: Strategies to maximize your child’s financial aid eligibility, how to lower your cell phone bill, and how to prevent a divorce from ruining your finances.

7 Ways to Tell If That IRS Tax Collections Call Is Fake
Don’t get duped.

Strategies to Maximize Your Child’s Financial Aid Eligibility
Increasing your odds.

4 Ways to Lower Your Cell Phone Bill
The telecoms are rich enough.

10 Ways to Prevent a Divorce From Ruining Your Finances
Protecting what’s yours.

Your Money Secrets Are Killing You

Mind Money ConnectionWriter Neal Gabler broke the don’t-talk-about-money taboo this spring with an Atlantic article, “The Secret Shame of Middle-Class Americans.” Now he wants everyone to start talking.

“The idea of not being successful financially in America is such a stigma,” says Gabler, who revealed in the article that he was among the millions of adults who didn’t have savings to cover a $400 emergency. “That’s the reason people don’t talk about it, because they take their failure personally.”

Yet financial stress is epidemic. Nearly three-quarters of U.S. adults admitted feeling stressed about money, and 22 percent reported extreme stress in a 2015 study commissioned by the American Psychological Association, “Stress in America: Paying With Our Health .”

In my latest for the Associated Press, what that study revealed about our inner financial turmoil.

Tuesday’s need-to-know money news

Image9Today’s top story: Insider tips for finding affordable long-term care insurance. Also in the news: The most affordable time of year to buy a house, states that help consumers save money on insurance, and an app that compares the prices of every ride sharing option.

5 Insider Tips for Finding Affordable Long-Term Care Insurance
Buy sooner rather than later.

The Most Affordable Time of Year to Buy a Home
Holding out until winter.

5 States That Help Consumers Get Answers, Save Money on Insurance
Do you live in one of them?

RideGuru Compares the Cost of Every Ride Sharing Option
Don’t get taken for a ride.

Monday’s need-to-know money news

Zemanta Related Posts ThumbnailToday’s top story: 3 options to save for your child’s college education. Also in the news: Yahoo and your credit cards, a personal finance checklist for 40-somethings, and how not to blow your pay raise.

3 Options to Save for Your Child’s College Education
A look at different savings plans.

Will Yahoo Breach Compromise Credit Cards? Probably Not
But you should still check your credit and change your passwords.

The 6-Point Personal Finance Checklist for 40-Somethings
It’s a great time to get your finances in order.

If you got a pay raise, here’s how not to blow it
Making the most of your pay increase.

Q&A: What to consider before paying off a vehicle loan

Dear Liz: In January, I used financing to buy a used car, and now I have about $8,000 left to pay off. I recently received a windfall and can pay off that debt in full. Is there any reason to not go ahead and do that? This car loan is my only current debt. However, I do anticipate buying a home and thus getting a mortgage in the near future. Additionally, would paying off the car loan help lower my auto insurance payment?

Answer: Having an open installment loan showing on your credit reports can help your scores, according to credit expert Barry Paperno, who used to work for leading credit scoring firm FICO. But paying it off shouldn’t hurt you much if at all. By contrast, paying off revolving debts such as credit card balances can give a real boost to your scores.

Paying off the loan should save you some interest and eliminating the payment could help you qualify for a bigger mortgage. Those are real advantages. Still, there may be better uses for your windfall. Are you taking full advantage of your 401(k) match, if your company offers one? If you don’t have a workplace retirement plan, are you contributing to an IRA? Do you have an emergency fund?

A paid-off car doesn’t automatically qualify for lower insurance rates. You can consider dropping collision and comprehensive coverage on older cars, since you’re no longer required to carry that coverage, but make sure that you’re comfortable with the risk of not getting anything from your own insurer to repair or replace your car if, for example, you cause an accident and your car is damaged.

Q&A: Social Security benefits for children

Dear Liz: My husband was 51 when our last child was born, meaning that our son was only 15 when my husband turned 66. Because I was working full time and we had sufficient income, we adhered to the traditional advice of delaying my husband’s Social Security payment. However, when he filed this past year at age 69, we learned that our son is eligible to receive a considerable monthly amount. Fortunately, the Social Security office was able to backdate my husband’s application for six months, but nevertheless we lost out on several thousand dollars by not filing when my husband was 66. Although his monthly payout would have been lower, the accumulated difference would have been considerable with our son’s payment. Therefore, although most retiring people do not have minor children, I believe that all financial advisors should be aware of this option and that those parents should plan carefully to maximize their payout.

Answer: More than 4 million children receive Social Security benefits because their parents are disabled or deceased or have reached retirement age. A child can receive up to half the parent’s disability or retirement check. If the parent dies, a child’s survivor benefit can be up to 75% of the parent’s basic benefit. (There’s a limit to how much a family can receive, though, which ranges from 150% to 180% of the parent’s check.) Benefits typically stop at age 18, although they can continue until two months past the child’s 19th birthday if the child is still in high school. Benefits can continue indefinitely if the child is disabled.

Children’s benefits can be subject to the same earnings test that reduces Social Security retirement checks if the parent claims early and continues working. So it often makes sense to wait to start benefits until the parent is full retirement age, currently 66, when the earnings test no longer applies. You’re right that delaying beyond that age may not make sense when the child is young enough to receive benefits, since they can considerably boost a family’s total benefit.

Having minor children at retirement age definitely complicates the calculation of when to take benefits. Many free Social Security claiming calculators don’t let you include minor children in your calculation, so if you’re in this situation it can be worth paying $40 to get a customized claiming strategy from calculators such as

Q&A: Changing the executor of a will

Dear Liz: You recently wrote about a stepmom who dismissed her deceased husband’s son as an executor. Sometimes a will provides that someone such as the surviving spouse can alter the executor pattern. This is done to keep the children in line.

Answer: That’s certainly a possibility. But if that’s the case, the stepmother could simply show at least that portion of the will to the other children to allay their fears. The fact that she hasn’t shared the will, which should be a public record at some point, is reason for concern.

Friday’s need-to-know money news

o-CREDIT-REPORT-facebookToday’s top story: What you need to qualify for a credit card when you have bad credit. Also in the news: How to escape low-yield savings options, how one couple paid off $74,000 of debt in two years, and the building blocks that lead to smart money decisions.

What You Need to Qualify for a Credit Card for Bad Credit
Don’t fall for high fee offers.

How to Escape Low-Yield Bank Savings Options
How to get better returns without increased risk.

How One Couple Paid Off $74,000 in 2 Years
The success of the snowball method.

These Are the ‘Building Blocks’ That Lead to Smart Money Decisions
Teaching kids sound money practices.

Thursday’s need-to-know money news

Zemanta Related Posts ThumbnailToday’s top story: Key financial considerations when you live alone. Also in the news: Managing your money while you’re separated from your spouse, determining how much life insurance you really need, and a change in thinking that will help get you out of debt.

Key Financial Considerations When You Live Alone
Important considerations for your life.

3 Tips for Managing Your Money While Separated From Your Spouse
Keeping your finances in order during difficult times.

How Much Life Insurance Do You Really Need?
Keeping yourself protected.

The Shift in Mindset That Will Help You Get Out of Debt
A change in thinking.

Wednesday’s need-to-know money news

retirement-savings3Today’s top story: Tax breaks and loan options to pay for college. Also in the news: Why you should buy a home after school starts, how to refinance your student loans, and how to de-stress your retirement program.

Tax Breaks and Loan Options to Pay for College
Easing the burden.

4 Reasons to Buy a Home After School Starts
Less buyer demand.

How to Refinance Your Student Loans
Getting a better deal.

How to de-stress your retirement plan
Taking a deep breath.