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Tuesday’s need-to-know money news

Jun 24, 2014 | | Comments Comments Off

Zemanta Related Posts ThumbnailToday’s top story: Finding the best travel rewards credit cards. Also in the news: Five ways tot get things off of your credit report, what your parents didn’t teach you about personal finance, and five bad financial habits you need to break.

The Best Travel Rewards Credit Cards in America
How to get the most from your summer travel.

5 Ways to Get Things Off Your Credit Report
Erasers don’t actual work in this case.

What Your Parents Never Taught You About Personal Finance
The information age has changed the game.

5 Bad Financial Habits You Need to Break
Time to stop your chronic overspending.

5 Ways To Save On Home Remodeling
How to remodel without breaking the bank

Categories : Liz's Blog
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Monday’s need-to-know money news

Jun 23, 2014 | | Comments Comments Off

images (1)Today’s top story: Four quick tips to improve your credit score. Also in the news: What really matters when it comes to credit reports, should you move while retired, and why you shouldn’t put your retirement savings on the back burner.

How to Improve a Credit Score: 4 Quick Tips
Quick ways to boost your score.

What Really Matters When It Comes to Credit Reports
Focus on the important things.

Is Moving in Retirement a Smart Money Choice?
Are you better off staying put?

Don’t Put Saving for Retirement on the Back Burner
It’ll be here before you know it.

Retired couples wrestle over money issues
How to deal with financial stress.

Categories : Liz's Blog
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Dear Liz: You’ve often talked about delaying the start of Social Security benefits to maximize your check. But what about in the case of a widow? My husband died in 2006 at the age of 57. I will be 62 this year and could start receiving benefits based on his earnings. (I did not work during our marriage as I was a home-schooling mom.) I’ve been living off my husband’s modest pension benefits. Would waiting until full retirement age increase the monthly payment I would ultimately get? One of the reasons I ask is that I have an adult son who lives with me and who probably will never be able to have a job. Yet he is not officially disabled and, as far as I know, is not eligible for any kind of benefits. I wondered if it might be a good idea to start taking Social Security as soon as I could and either save or invest the monthly checks to add to what I could leave my son (I have an IRA and other assets I hope not to have to touch). My pension will cease when I die.

Answer: You could have started receiving survivor’s benefits at 60. (Those who are disabled can start survivor’s benefits as early as age 50, or at any age if they’re caring for a minor child or a child who is disabled under Social Security rules.) Since your husband died before he started benefits, your check would be based on what your husband would have received at his full retirement age of 66. If you start benefits before your own full retirement age, however, the survivor’s benefit is permanently reduced.

For many people, starting survivor’s benefits isn’t as bad an idea as starting other benefits early. That’s because survivors can switch to their own work-based benefit any time between age 62 and 70 if that benefit is larger. Starting survivors benefits early can give the survivor’s own work-based benefit a chance to grow.

In your case, however, the survivor’s benefit is all you’re going to get from Social Security. While it may be tempting to take it early and invest it, you’re unlikely to match the return you’d get from simply waiting a few years to start.

Your description of your non-working adult son as “not officially disabled” is a bit baffling. If he has a disability that truly prevents him from working, getting him qualified for government benefits would provide him with income and healthcare that would continue despite whatever happens with you. (You may not want to touch your assets, but that might be necessary if you need long-term care.) If he can work, then getting him launched and self-supporting would be of far greater benefit than hoarding your Social Security checks for him.

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Dear Liz: I’m having trouble finding information about how to structure my finances to get the maximum financial aid for my kids when they enter college. For example, will contributing to an IRA instead of a taxable investment account matter? Should I focus on paying off my mortgage or should I buy a bigger house and acquire debt in the process if I want my kids to qualify for more aid? There’s plenty of advice out there about how to minimize taxes — for example, by contributing to 401(k)s or selling losing stocks at year-end. But I’m interested in legally and ethically shielding my assets from the family contribution calculations used by the Free Application for Federal Student Aid. Any idea how I can learn more about the inner workings of the FASFA formula?

Answer: Before you rearrange your finances, you need to understand that most financial aid these days consists of loans, which have to be repaid, rather than scholarships and grants that don’t. Wanting your kids to qualify for more aid could just lead them to qualify for more debt.

Also, the FAFSA formula weighs income more heavily than assets. If you have a six-figure income and only one child in college at a time, you shouldn’t expect much need-based financial aid, regardless of what you do with your assets.

That said, there are some sensible ways to shield assets from the formula, and often they’re things you should be doing anyway: maxing out your retirement contributions, for example, and using any non-retirement savings to pay down credit cards, car loans and other consumer debt.

Using non-retirement savings to pay down mortgage debt helps with the federal formula, but may not help much with private schools that include home equity in their calculations. Either way, taking on a bigger mortgage with college looming is rarely a good idea.

You can get some idea of how much the federal formula expects you to pay for your children’s educations by using the “estimated family contribution” calculator at FinAid.org. Another great source of information is the book “Filing the FAFSA: The Edvisors Guide to Completing the Free Application for Federal Student Aid” by Mark Kantrowitz and David Levy.

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Friday’s need-to-know money news

Jun 20, 2014 | | Comments Comments Off

Zemanta Related Posts ThumbnailToday’s top story: Credit dangers faced by single parents. Also in the news: Financial advice on repeat, how saving for retirement is like sports, and the worst financial lessons kids learn from television.

The Credit Dangers That Single Parents Face
Building credit can be difficult.

Why You Need to Hear the Same Financial Advice Over and Over
Hit the repeat button.

The Offense and Defense of Retirement Savings
It takes a team effort.

4 of the Worst Financial Lessons on Kids TV Shows
Too many money trees.

6 Ways to Save on Glasses or Contacts
Save money and get a clearer view of the world.

Categories : Liz's Blog
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Thursday’s need to know money news

Jun 19, 2014 | | Comments Comments Off

Zemanta Related Posts ThumbnailToday’s top story: How paying off your student loans could actually lower your credit score. Also in the news: What to expect from the Social Security Administration’s new strategy, how you could benefit from a financial pro, and why millennials still aren’t saving enough money.

I Paid Off My Student Loans & My Credit Score Dropped?!
Yes, you read that correctly.

Here’s what the Social Security Administration’s new service strategy means for you
Prepare for long wait times

Top 8 Reasons You Need A Financial Pro
It’s good to have a sounding board.

Why Millennials Still Don’t Save Enough
It’s not too late.

Facing Alzheimer’s? Prepare for the financial punch now
Making the difficult decisions.

Categories : Liz's Blog
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Wednesday’s need-to-know money news

Jun 18, 2014 | | Comments Comments Off

imagesToday’s top story: Ten YouTube channels that can help you make and save money. Also in the news: How your 401(k) plan can help you decide when to take social security, how the seven deadly sins can hurt you financially, and what to do when you’re too rich for financial aid but too poor to afford college.

10 Must-Watch YouTube Channels for Making and Saving Money
Things to watch in between cat videos.

When to take Social Security? Your 401(k) plan may know best
Help from an unlikely source.

How the 7 Deadly Sins Can Send Your Finances ‘South’
Envy especially.

Restaurant Apps That Will Save You Money
Just in time for summer dining.

Too Poor For College, Too Rich For Financial Aid
What to do when you’re stuck in limbo.

Categories : Liz's Blog
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Tuesday’s need-to-know money news

Jun 17, 2014 | | Comments Comments Off

money-vacation-saveToday’s top story: Common credit mistakes that could ruin your mortgage. Also in the news: Starbucks will pay college tuition for all of its employees, a young person’s guide to getting rich, and what not to do with your credit cards during your summer vacation.

5 Credit Moves That Could Wreck Your Mortgage
Common mistakes to avoid during the mortgage process.

Starbucks clears college degree path for employees
All employees will receive free tuition to an online University.

A Young Person’s Guide To Getting Rich Slowly
Saving immediately for retirement is key.

5 Summertime Credit Card Blunders and How to Avoid Them
You’ll have to pay for all that summer fun eventually.

Moving Just to Avoid Taking 401(k) Tax Hit
Just a bit extreme.

Categories : Liz's Blog
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Monday’s need-to-know money news

Jun 16, 2014 | | Comments Comments Off

debt collectorsToday’s top story: How to prove that a debt isn’t actually yours. Also in the news: How your credit score impacts your mortgage rate, the laws debt collectors must adhere to, and how to protect your identity during World Cup madness.

How Can You Prove a Debt Isn’t Yours?
How to determine if a debt is actually yours.

How credit scores impact your mortgage rate
The lower the score, the higher the interest rate.

Know the law when dealing with debt collectors
Don’t let yourself become intimidated.

5 Ways Hackers Could Target You During the World Cup
Stick to well-known sites and be careful with apps.

7 Ways to Help Get Your Child Out of Debt
How to help without burdening yourself.

Categories : Liz's Blog
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Q&A: Closing credit cards with annual fees

Jun 15, 2014 | | Comments Comments Off

Dear Liz: When I opened my airline-branded credit card almost 10 years ago, it was well worth the $50 annual fee. I was able to book many flights for free because of the miles I earned and the airline’s generous rewards program. However, I moved a few years ago to a location that is not serviced by the airline. Now the airline’s reward card is my “last ditch emergency” card since I have two other cash-back rewards cards that offer a better return (I pay all my cards in full every month).

I know that annual fees on credit cards are not good, but I’m struggling with the decision on whether to keep it or not. It is the second-oldest credit account I have and about a third of the amount of credit I can use, and I am concerned about my credit score dropping if I close it. My credit score is excellent, but I am concerned about how much of a drop in my score this would cause. I did try to “convert it” to a cash-back credit card with no annual fee, but the bank wouldn’t do it. So now I’m stuck on what to do. Should I continue to pay the $50 annual fee to keep my credit score intact, or should I close it and see if I can increase my credit on my other cards?

Answer: Most good travel rewards cards these days charge annual fees, and those fees aren’t a big deal if you’re getting airline tickets or lodging that more than offset the cost. Your card may pay for itself with a single trip if it waives baggage check fees (as many airline-branded cards do).

If you can’t even wring that much value from the card, consider closing it. Given how much of your available credit the card represents, though, you might want to open another card first. Available credit matters far more to your credit scores than the age of your accounts. And even if you close this account, your history with it will continue to be reported for many years, so you shouldn’t hold off just because it’s your second-oldest card.

Categories : Credit Cards, Q&A
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