Today’s top story: Hackers steal close to five million hospital records. Also in the news: When to get your student a credit card, why a mini-retirement could restart your career, and the three powers of attorney everyone needs.
Hospitals Say Hackers Stole Records of 4.5 Million Patients
Community Health Systems operates 206 hospitals in 29 states.
Getting Your Student a Credit Card
Testing their personal responsibility.
Why a Mini-Retirement May Rejuvenate Your Career
And save you money at the same time.
Three Powers of Attorney Everyone Needs
The essentials for protecting yourself.
How Do You Stay Motivated With Your Financial Goals?
Keeping your eyes on the prize.
Today’s top story: One third of Americans have nothing saved for their retirement. Also in the news: How to pick the right bank, preparing financially for having kids, and how to get the best money market rates.
A third of people have nothing saved for retirement
You really shouldn’t be one of them.
How to pick a bank, in 7 steps
One of your most important relationships.
Babies Are Expensive: How to Prepare for Having a Kid
Adorable, but expensive.
How to Find the Best Money Market Rates
Getting the most for your savings.
3 Financial Firsts All Parents Should Prepare Their Children For
The sooner, the better.
Dear Liz: My in-laws just informed us that they have gone through their retirement fund and soon won’t be able to pay their mortgage. They borrowed against the house they’ve lived in for 30 years and currently owe $325,000. They are devastated, so I am trying to figure out the best way for them to stay in their house in their final years, as they are both 73. They have about $300,000 in equity but do not want to sell. They are willing to sell the house to my wife and me at their current balance. We would make the payments and they remain in the house. When they pass, the house would be ours. They looked into a reverse mortgage but this would cover only the payments, not taxes, insurance or maintenance. What is the best way to do this? Do I get a loan and purchase outright? Do I contact their bank and see if I can assume their loan? Do they quit-claim the home to my wife and me? My wife and I can afford to do this, but we want to make the right financial decision.
Answer: Before you do anything, please consult a tax professional and an attorney with experience in estate and elder law.
It’s unlikely the lender will allow you to assume the loan, so you probably would need to set this up as a sale of the home with you and your wife obtaining a new mortgage.
But their plan to sell the house to you at a below-market value could create gift tax issues and could delay their eligibility for Medicaid, should they need help paying for nursing home care.
There are other risks to your in-laws. Your creditors could come after the home if you lose a lawsuit, for example. You could sell the home without their consent, and you would have a claim on the property if you and your wife split up.
Then there are the risks to you. You say you can afford to make the payments (and presumably pay the taxes, insurance and maintenance as well), but what happens if you lose a job or suffer another financial setback?
All of you need to understand the risks involved, and your alternatives, before proceeding.
A sale of the home or a reverse mortgage may well prove to be a better choice. A reverse mortgage wouldn’t completely eliminate their home costs, but would substantially lower them — whoever winds up paying the bill.
Today’s top story: How to tell when credit card rewards are actually worth it. Also in the news: Big changes ahead for your 401(k), using your job hunting expenses as tax deductions, and how to determine if a charity is worth your hard earned money.
5 Times Credit Card Rewards Are Worth It
When credit cards rewards truly pay off.
5 Future 401(k) Changes You Need to Keep an Eye On
Big changes are ahead.
Writing Off Your Job Hunting Expenses
Your job search expenses could be tax deductible.
How to Pick a Charity
Making sure your money goes where its needed.
5 Unconventional Ways To Use Your Accounts
Could your 401(k) be used to purchase your new home?
Today’s top story: Personal finance tips from big data companies. Also in the news: Why more seniors are being duped out of their money, the right amount to have in your emergency savings and ten ways to best spend $1000.
Three Personal Finance Tips From Big Data
Analyzing your spending habits.
More Seniors Getting Swindled Out of Money
Preying on some of our most vulnerable
How Much Is in Your Emergency Fund?
What is your emergency sweet spot?”
We asked a palm reader and a financial adviser how to handle our money
Who came out on top?
10 Smart Ways to Spend $1,000
And possibly double your money.
Today’s top story: Five areas of personal finance that you can’t afford to ignore. Also in the news: How your unhappy relationship could affect your wallet, what to do when a friend sends a debt collector after you, and how you can be rewarded for waiting to purchase something online.
Personal Finance: 5 Areas You Can’t Ignore
Paying attention to the basics.
5 money habits of unhappy couples
When relationship angst affects your wallet.
Can a Friend Send a Debt Collector After Me?
With friends like these…
The Retailers Who Will Reward You for Abandoning Your Shopping Cart
Waiting a little bit could save you money.
Dear Liz: My husband works for the government and will be receiving a pension when he retires. Am I still supposed to save the recommended amount for retirement from my income or can that amount be reduced since we know we have the pension? We are starting a family and could use any extra money we can get right now.
Answer: If your husband is just a few years away from collecting that pension, counting on it to be there is reasonable. Since you’re just starting a family, though, it’s much more likely that retirement is decades away, and a lot can happen in that time.
Your husband could be laid off or fired, or he could quit. Even if he sticks it out, the government could change the way his pension is accrued to make it less generous. (The rising cost of public employee pensions concerns many lawmakers and taxpayers.) Even if he gets what he expects, his pension may not be enough to support the two of you in old age.
So yes, you should be saving for retirement. A cautious person would save as if no pension existed. Someone who’s comfortable with risk might simply aim to fill the gap between the expected pension and future living costs. Others might find a comfortable saving rate between those two points. You can use AARP’s retirement calculator to help you create a plan that allows you to take care of your family today without depriving yourselves in the future.