Thursday’s need-to-know money news

Today’s top story: Should you save less for retirement? Also in the news: Can student loan forgiveness happen, a new congressional proposal would require IRA/401(k) withdrawals to start at 75, and how to spot fake reviews on Amazon.

Should You Save Less For Retirement?
An extremely early retirement goal may rob you of the joy of living now. Consider a revised path and second career.

Can Student Loan Forgiveness Still Happen?
Debt forgiveness of $10,000 would cancel debt entirely for about 15 million borrowers, according to a NerdWallet analysis of federal data.

Required IRA, 401(k) withdrawals would start at age 75 under congressional proposal. Here’s who would benefit
How your retirement savings might be affected.

How to Spot Fake Reviews on Amazon
Those five stars might be bought and paid for.

Wednesday’s need-to-know money news

Today’s top story: Google, Walgreens and H&R Block want to be your bank. Also in the news: 6 packing and planning tips for long-term travel, the imminent return of international travel, and Verizon’s new children’s money management app.

Google, Walgreens and H&R Block Want to Be Your Bank
Companies are working with partner banks to offer FDIC-insured accounts through their own apps and platforms.

6 Packing and Planning Tips for Long-Term Travel
No matter how long you plan to work abroad, these preparations can help set you up for a smoother trip.

Ask a Travel Nerd: I’m Vaccinated — Can I Finally Go Abroad?
The return of international travel is imminent, but you’ll have to book soon and be flexible with your plans.

Verizon introduces a children’s money management app
It’s never too early to start teaching financial responsibility.

Should you save less for retirement?

Gwen Merz was fresh out of college in 2014, working an information technology job she hated, when she decided early retirement was the answer. She socked away every dollar she could, saving as much as 70% of her income so that she could quit when she was 35.

Now 30, Merz thinks she may have saved too much. Her job and life goals have changed, but most of her $300,000 savings is in retirement accounts that can’t be touched without tax penalties. If she could do it over, she says she would either save less aggressively or put some of the money into a taxable investment account with less strict withdrawal rules.

“I would pay a little bit more in taxes on my salary but I would have that money available for me,” says Merz, who lives in St. Louis.

Some people save prodigious amounts so they can retire early or because they’re worried they won’t have enough for a comfortable retirement. But aggressive saving can have significant and sometimes unexpected costs. In my latest for the Associated Press, why it’s important to strike the right balance between saving for the future and living your life today.

Tuesday’s need-to-know money news

Today’s top story: 4 small-business innovations that will outlast the pandemic. Also in the news: Banking tools that can help boost savings while paying off debt, preparing for an intense wildfire season in the western United States, and the best kind of car to buy in this inflated market.

4 Small-Business Innovations That Will Outlast the Pandemic
The innovative adaptations small-business owners were forced to make to their operations during COVID-19 may offer benefits for the future.

Banking Tools Can Help Boost Savings While Paying Off Debt
Common banking tools to use that can help you pay off debt while adding to your savings.

Get Ready for an Intense Wildfire Season in the Western U.S.
You should have an emergency plan, prepare your property and make sure your belongings are insured.

What’s The Best Kind Of Car To Buy In This Inflated Market?
Getting the most for your money.

Monday’s need-to-know money news

Today’s top story: The pros and cons of selling your home to an iBuyer. Also in the news: A new episode of the Smart Money podcast on travel insurance and buying an electric car, 5 pandemic credit card habits to carry forward, and preparing your wedding budget for the reception resurgence.

Pros and Cons of Selling Your Home to an iBuyer
Figuring out your priorities — such as having a flexible schedule, getting the best price or minimizing stress — can help you decide whether selling to an iBuyer could work for you.

Smart Money Podcast: When Travel Insurance Is Worth It and Buying an Electric Car
What it offers, how much it costs and when you should purchase it.

5 Pandemic Credit Card Habits to Carry Forward
Among credit card holders whose credit limits were cut during the pandemic, 93% say their financial views or strategies changed because of it.

Is Your Wedding Budget Ready for the Reception Resurgence?
Wedding celebrations are back.

Q&A: When to claim Social Security

Dear Liz: The common assumption seems to be that, in most cases, it’s a good idea to delay collecting Social Security because the longer you wait, the higher your monthly benefits will be. I will reach my full retirement age of 66 years and 2 months in July. According to the Social Security Administration website, my monthly benefit would get bumped up if I waited to start collecting until 66 years and 8 months, next February. The next bump wouldn’t be for another full year, at 67 years and 8 months. My current plan is to retire in March or April of next year. Is there any reason I shouldn’t start collecting my benefit as soon as I get to the 66 years and 2 months threshold?

Answer: It’s not clear what you were looking at, but your Social Security benefit earns delayed retirement credits every month you put off your application after your full retirement age. Those credits add up to 8% annually and increase your checks for the rest of your life.

Social Security can be complicated, and making the right claiming decision isn’t always easy, but your choice can have a huge impact on your future financial security. Please consult a fee-only, fiduciary financial planner before you retire so you can be confident you’re doing the right thing.

Q&A: This $1 house deal comes with elder care responsibility. It could get complicated

Dear Liz: My father-in-law died recently. My mother-in-law is not well enough to live alone. My husband has a brother and a sister who would like my husband and me to buy my in-laws’ big, old home for $1, take care of my mother-in-law 24/7, and make 60 years’ worth of updates and repairs to the house. I see plenty of downsides to this arrangement, but no upside. Is there a way this deal can work for us, and not just for the other siblings?

Answer: The upside is that you would own the house. Although the home may not be in great shape, it presumably is an asset with some value. Whether it has enough value to be worthwhile, and whether you want to acquire it this way, are open questions.

If you and your husband buy the home for $1, the IRS will assume that your mother-in-law gave the two of you her property, and that can be problematic. The difference between the sale price of the home and its fair market value would be treated as a gift for gift tax purposes, said Mark Luscombe, principal analyst for Wolters Kluwer Tax & Accounting. Your mother-in-law probably wouldn’t owe gift taxes, but she likely would have to file a gift tax return, and the gift would use up part of her lifetime gift and estate tax exemption.

If the home is a gift, you get her tax basis, as well. If instead she bequeathed the home to you and your husband in her will, the home would get a new, stepped-up value for tax purposes. How big a deal this might be depends on a lot of factors, including which state the home is in, so you’d need to consult a tax professional for details.

On the other hand, taking title to the home before your mother-in-law dies ensures that you and your husband actually get this asset. If it’s left in a will, your mother-in-law could change her mind and leave it in full or in part to someone else. If she doesn’t have a will, the house would be divided according to state law, which probably means your husband would have to share the asset with his siblings.

There are other aspects to consider. Taking care of another person can be costly: Caregivers spend nearly 20% of their personal income on out-of-pocket costs related to helping a loved one, according to an AARP study in 2019.

Also, more than half of family caregivers adjust their work hours by taking time off, reducing their hours or quitting altogether, AARP researchers found. In addition to losing income, they can lose promotions, job security and opportunities to save for retirement.

Caregiving also is associated with higher levels of stress, worse health and increased risk of death, according to the Centers for Disease Control.

Before you take on this task, consider hiring a geriatric care manager to help you assess your mother-in-law’s needs and discuss alternatives. You can get referrals from the Aging Life Care Assn.

Thursday’s need-to-know money news

Today’s top story: What to do if you save too much for retirement. Also in the news: The ins and outs of starting a car, financial pros are hanging on to stocks, and why you need multiple savings accounts.

What to Do If You Save Too Much for Retirement
Saving too much for retirement can cause problems as well as saving too little. Beware of IRS rules and penalties.

So You Think You Know How to Start a Car
It’s become much more complicated

Selling Stocks on Inflation Fears? Financial Pros Wouldn’t
The inflation sirens are wailing, but financial pros say there’s no reason to panic.

Why You Need Multiple Savings Accounts
Multiple accounts make it easier to reach your savings goals.

Wednesday’s need-to-know money news

Today’s top story: How to know when it’s time to ditch your starter credit card. Also in the news: How to cover yourself against car theft, tips on paying for your wedding, and how to make a budget if you want to freelance full time.

How to Know When It’s Time to Ditch a Starter Credit Card
Don’t get too comfortable with your first card — once it’s done its job, it’s time to move on.

Car Theft Is Up in the U.S.: Here’s How to Cover Yourself
With the right kind of insurance, you could avoid paying out of pocket if your car or catalytic converter is stolen.

Weddings Are Marching Back: Here’s How to Pay for Yours
It’s best to pay for a wedding with savings, but if you need to finance, look for low-interest options with affordable payments.

How to Make a Budget If You Want to Freelance Full Time
Turning side hustles into main hustles.

What to do if you save too much for retirement

Many Americans don’t save enough for retirement, but it’s entirely possible to save too much — at least according to the IRS.

Tax laws limit how much you’re allowed to contribute to retirement accounts, and excess contributions can be penalized. Uncle Sam doesn’t want you to leave the money in the account too long, either. Those who fail to take enough out of their retirement accounts also face heavy penalties.

In my latest for the Associated Press, what you need to know to stay on the right side of the IRS’ rules.