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Dear Liz: I am 64. I recently reviewed my Social Security summary online and saw that it does not have an accurate listing of my income, so the projections of my benefits aren’t accurate either. How do I correct these errors?

Answer: There are a number of ways the Social Security database could be wrong. An employer could have reported your earnings incorrectly or not at all. Or your earnings could have been reported using the wrong name or an incorrect Social Security number. If you married or divorced and changed your name, but failed to notify Social Security, that also could lead to errors in your record.

You can call the Social Security help line at (800) 772-1213 to start the process of correcting your records. It would be best if you have proof of your earnings, such as W-2 forms, tax returns or pay stubs from the years in question. If you don’t have such proof, the Social Security Administration asks that you provide as much information as possible about where you worked, the name of your employer(s), the dates you worked and how much you earned.

Your experience shows why it’s important to periodically review your Social Security records to make sure they’re accurate. This year the Social Security Administration will resume sending paper statements to certain workers (those aged 25, 30, 35, 40, 45, 50, 55 and 60), but in the meantime you can check your records online by signing up at http://www.ssa.gov/mystatement/.

Categories : Q&A, Retirement
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Q&A: When to file bankruptcy

Jul 06, 2014 | | Comments (1)

Dear Liz: I’m a 33-year-old mother who lost my full-time job during the recession in 2009. I may have my “stuff” together again, but am considering filing bankruptcy. Each month I’m spending almost half (yes half!) of my income on debt payments to credit cards, loans and medical bills. Each month after all my bills are paid and groceries are bought, I have zero dollars left over to save. Even after losing my job, I made sure to always make those payments, so my credit is decent. Last I checked my credit score was hovering right around 700. I really have no reason to have good credit at this time, as I don’t have any need for a large purchase. Should I file or pay back my debts? Is filing for bankruptcy a good idea if it allows me to build a savings account and start putting money back into a 401(k)?

Answer: A bankruptcy filing would devastate your credit scores, and that may create more problems than you think. Credit information is used by insurers to determine premiums, by landlords to evaluate applicants and by wireless carriers and utilities to set deposit requirements.

At the same time, it makes little sense to continue to struggle against a mound of debt if you’re not making a dent in the pile. If it would take you five years or more to repay what you owe, you should at least consider filing for bankruptcy. Why five years? Because that’s how long you’d be required to make payments under a Chapter 13 repayment plan.

Most people, however, qualify for Chapter 7 liquidation bankruptcy, which is typically preferable since it’s faster (three to four months, versus five years) and erases credit card and medical bills. An experienced bankruptcy attorney can advise you and help you understand the ramifications of filing.

If lower interest rates might help you pay off your debt within five years, you also should consider an appointment with a credit counselor associated with the National Foundation for Credit Counseling (www.nfcc.org). These nonprofits can set you up with debt management plans that may offer lower rates on your credit card debt.

Most people feel an obligation to pay what they owe, but that often leads to fruitless struggles against impossible debts. Bankruptcy laws allow individuals a fresh start so that they can take care of themselves and their families. Among your many financial obligations is the one to support yourself in retirement, and every year you delay saving will make it that much harder to accumulate a reasonable nest egg.

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Notes from London

Jul 03, 2014 | | Comments (1)

LondonIn Los Angeles, a 10 percent chance of rain in the forecast means it’s not going to rain. In London, a 10 percent chance of rain means it will rain 10 percent of the day.

At least that’s my conclusion after our recent week tourizing that fine city.

Each morning, we made sure to pack our rain jackets regardless of the forecast, and just about every day we used them. We had one truly rainy day, but were (as the Brits say) spoiled for choice about where to spend it, since London has so many great indoor options to entertain the kiddos: the British Museum, a science museum, a natural history museum and an aquarium, to name just a few.

Most of the major museums are free. Spending time in one of London’s many parks is also free, and renting a bike to tool around will cost you just two pounds for the day (about $3.50). We appreciated these wallet-friendly options, because otherwise London can be an expensive city. (Just one example: two loads of laundry at a laundrette near Marble Arch set me back over $30. The proprietor was lovely, though, and there are worse things than spending a morning chatting with fellow travelers from all over the world.)

Some things are definitely worth the expense. Among them:

The hop-on, hop-off buses. I’ve long been skeptical of the open-top buses that cruise big cities, but the Big Bus tour we took had a witty guide and offered a great overview of the city. Our tickets included a boat ride on the Thames and several free walking tours. You can get your tickets at most of the stops, or get them in advance for a discount online. (We spent about $130 for three people.)

The Harry Potter tour at the Warner Bros. studio. Visit the sets, check out the props, be blown away by the scale models used in making the film. The digital guides, with audio and video commentary, are worth getting. (With the guides, we spent about $200 for admission plus about $50 for rail tickets to get there.)

The Tower of London. A thousand years of history in one place, with lots to interest the kiddos. (Admission for three was about $70.)

Matilda. Yes, we could have seen this terrifically fun musical made from Roald Dahl’s book in New York, but I’m glad we waited to see it in its native habitat. If you book in advance, you can get a better deal than the nearly $300 I shelled out for two tickets…so do that.

 

Categories : Liz's Blog
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Identity theft conceptToday’s top story: The increase in student loan interest rates. Also in the news: Safeguarding your retirement, making sure your finances are marriage ready, and protecting your identity while on vacation.

Student Loan Rates Rise Today: Will You Be Paying More?
Find out how much more you could be paying.

How to Insure Your Retirement Like You Do Your Car (Almost)
Tips to help you safeguard.

Checklist: Is Your Money Ready For Marriage?
You’re not the only one walking down the aisle.

11 Ways to Keep Identity Thieves from Ruining Your Vacation
Why should they get to have any fun?

Categories : Liz's Blog
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Zemanta Related Posts ThumbnailToday’s top story: Five mid-year tax moves you should make right now. Also in the news: Why you should consider signing up later for social security, getting a late start on retirement savings, and why you should open a savings account.

5 Smart Mid-Year Tax Moves for Right Now
Don’t wait until next year.

Why Workers Sign Up for Social Security at Age 62
Waiting could bring you more money.

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There’s still time to catch up.

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Categories : Liz's Blog
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imagesToday’s top story: How to help your adult child become financially independent. Also in the news: Keeping your credit data safe at the World Cup, what new grads need to know about renters insurance, and what to do when you can’t pay your student loans.

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It’s never too late.

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Protecting your credit card data is the goal.

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You’re not living at Mom and Dad’s anymore.

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Don’t panic.

How to actually save more money
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Categories : Liz's Blog
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Dear Liz: I got my credit reports from http://www.annualcreditreport.com as you recommended in a recent column, but had to go through some hoops to get my actual credit score, which is the main thing I wanted. One of the bureaus required me to subscribe to its newsletter, which cost $29.95 a month after a seven-day free trial. I guess they hope people won’t cancel within seven days, but I did, without any trouble.

Answer: Confusion about the difference between credit reports and credit scores often leads people to sign up for unnecessary, costly products. (You were signing up for credit monitoring, by the way, not a newsletter.) You can get free credit scores from a variety of sites, including Credit.com, Credit Karma and Quizzle, without having to buy a product. The scores you get from these sites aren’t the scores that lenders typically use, but neither is the score the credit bureau provided you. If you want to see scores lenders usually use, you’ll need to buy those for $20 apiece from MyFico.com.

Categories : Credit Scoring, Q&A
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Dear Liz: In February 2015, it will be seven years since my bankruptcy. I have worked hard to rebuild my credit, and my credit score is 735. What do I need to do to make sure my bankruptcy drops off at the seven-year mark?

Answer: By federal law, most negative marks must be removed from credit reports after seven years — but bankruptcy is one of the exceptions. A Chapter 7 bankruptcy, which is the most common, can stay on your reports for up to 10 years from the date you filed. Chapter 13 bankruptcies are typically dropped after seven years. In either case, you shouldn’t need to do anything. Credit bureaus should delete the information automatically. If they don’t, contact the bureaus and request the deletion, but that usually isn’t necessary.

If you have to live with bankruptcy on your reports for a few more years, you shouldn’t be discouraged. It seems you’ve done a good job rebuilding your credit, and your scores should continue to rise as long as you handle credit responsibly.

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Q&A: Financing a career change

Jun 29, 2014 | | Comments (6)

Dear Liz: I am 48 and planning on a career change. I was looking at a culinary school website and it looks pretty exciting. It is a two-year, full-time program and the cost is about $65,000, which doesn’t cover the dorm or apartment expenses for living nearby. Of course, the institute’s counselor told me they have financial aid and asked, “How can you put a price on your future?” Right.

What would be the payback on something like that compared with an average salary of a chef? I will be 50 or so when I complete the program, and I’m not sure I want the big payment plan on my back. Can you help?

Answer: The counselor’s question is ridiculous. How can you not put a price on your future, particularly when it involves such a huge expense? Smart students consider the price not only of their educations but the incomes that education will bring them.

Many students sign up for these for-profit schools with visions of being the next Gordon Ramsay dancing in their heads. A little research would show them that this field is not exactly lucrative or booming.

According to the Bureau of Labor Statistics, the median pay for a chef or head cook was $42,480 in 2012. Employment is expected to grow 5% in the next decade, which is “slower than average for all occupations.”

So the payback isn’t great, especially if you have to borrow money to foot the bill — and most of the financial aid you get at these schools is loans rather than grants or scholarships. Even for someone with a 40-year working career ahead, taking on that level of debt isn’t smart.

You would have much less time to make an investment in a second career pay off — 15 years or so, and that’s if you can tough it out in a hot, hectic environment into your 60s.

If you really want to take this chance, at least minimize your investment by getting trained at a community college. Even better, get a part-time job in a restaurant and see how you like the work first before you commit to the field.

A more thoughtful approach to a career change would involve meeting with a career counselor to consider your strengths and experience, then looking into jobs in which those are an asset. Any training you would need should be reasonably priced and preferably something you could do while hanging on to your day job. Just think about that culinary expression “Out of the frying pan and into the fire,” and try to avoid getting burned.

Categories : Credit & Debt, Q&A
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