June 11, 2020 By

Thursday’s need-to-know money news

Today’s top story: 3 ways to skip your bank’s long phone lines. Also in the news: Keeping your credit in shape, even if you don’t have debt and don’t plan to borrow, 25 ways to save yourself from your debt disaster, and how to set up a 60/40 budget.

3 Ways to Skip Your Bank’s Long Phone Lines
When phone wait times are long, try to reach your bank via live chat, Twitter or message instead.

Keep your credit in shape, even if you don’t have debt and don’t plan to borrow
Good credit is important year-round.

25 Ways To Save Yourself From Your Debt Disaster
Climbing out of the debt hole.

How to Set Up a 60/40 Budget
Focus on two buckets.

Filed Under: Liz's Blog Tagged With: , , , , , , ,
June 10, 2020 By

Wednesday’s need-to-know money news

Today’s top story: 5 reasons it’s smart to lease a car right now. Also in the news: How to free up cash in your budget, how to decide what to leave your kids, and all the ways to get Amazon Prime for free.

5 Reasons It’s Smart to Lease a Car Right Now
Keeping your financial options open.

Can’t make money right now? Free up cash in your budget
Time to check every dollar you spend.

Should you be ‘fair’ with the inheritance you leave to your kids?
Think carefully about the message you’re sending.

All the Ways to Get Amazon Prime for Free
How to score that sweet free shipping.

Filed Under: Liz's Blog Tagged With: , , , , ,
June 9, 2020 By

Tuesday’s need-to-know money news

Today’s top story: Credit cards that help authorized users build credit. Also in the news: Taking control with advance medical directives, why you don’t need 20% down to buy a home, and why wealthy college students are getting more financial aid.

Which Credit Cards Help Authorized Users Build Credit?
Building your credit with a little help.

Take Control Now With Advance Medical Directives
Creating a living will and other advance directive documents may be easier, and cheaper, than you think.

Why You Don’t Need 20% Down to Buy a Home
Many lenders don’t require 20% down. But read the fine print.

Why do wealthy college students get more financial aid?
Rich students are getting more scholarship aid.

Filed Under: Liz's Blog Tagged With: , , , , , , , ,
June 9, 2020 By

“Where’s My Refund?”

If you’ve been waiting months for your tax refund, you’re not alone.

Many people who filed paper tax returns — and even some who filed electronically, but whose returns were flagged because of problems — have yet to see their money. Some are growing desperate, since they rely on refunds to pay bills or cover medical care.

Few can get through to anyone who can help. The IRS closed its processing centers, local offices and taxpayer help lines because of COVID-19 lockdowns, prioritizing the stimulus payments authorized by the CARES Act.

As I wrote in a previous post, taxpayers are reaping what their lawmakers have sowed:

“Over the last decade, Congress has cut the IRS’ budget by more than 20% after factoring in inflation, even as the population grew and tax law got ever more complicated. The agency was limping along with ancient technology and too few people to help the public even before the pandemic sent most of its workers home, without the ability to telecommute.

The agency has been trying to recall its workforce as quickly as it can, but there is a truly massive backlog of paper returns that has yet to be processed. Sending out stimulus relief checks has taken priority, and that Herculean effort is still in process.”

Processing centers in Kentucky, Texas and Utah opened this week. Re-openings are planned for June 15 in Georgia, Missouri, Michigan and Tennessee. Processing centers are scheduled to open June 29 in Indiana, Ohio, California, Puerto Rico and Oregon.

It’s unclear how long it will take employees to clear the massive backlog they’re facing. NerdWallet has some suggestions for workarounds, including contacting the Taxpayer Advocate Service, although that service is overwhelmed as well.

Please don’t re-file your tax return, as that won’t help and makes the backlog worse. If you’re still working, consider adjusting your withholding to increase your paycheck. (It’s far better to keep your own money than to make an interest-free loan to the government, which has no obligation to pay you back in a timely manner.) If you’re struggling, you may be able to find food banks,  and other resources to help you at 211.org.

Filed Under: Taxes
June 9, 2020 By

Is your target date investment letting you down?

Target date investments are supposed to be an easier way to invest, and they’re a popular choice in 401(k) plans. But the recent market downturn showed that some target date strategies suffered much bigger losses than others, especially for investors nearing retirement.

In my latest for the Associated Press, how to be sure the investment strategy you’re using still makes sense, especially if you’re close to retirement.

Filed Under: Liz's Blog Tagged With: ,
June 8, 2020 By

Monday’s need-to-know money news

Today’s top story: Scaling back spending yields unexpected benefits. Also in the news: A new episode of the SmartMoney podcast on charitable donations and new baby expenses, a travel expert shares his tips for traveling during a pandemic, and who needs to request a Coronavirus relief payment before October 15th.

Scaling Back Spending Yields Unexpected Benefits
Look for the silver lining.

SmartMoney Podcast: Make Your Donations Go Further; Plan for New Baby Expenses
Giving strategically.

Ask a Points Nerd: How Can I Travel This Summer?
An expert shares his tips after traveling up the West Coast.

Here’s Who Needs to Request a Coronavirus Relief Payment Before October 15
See if you’re on the list.

Filed Under: Liz's Blog Tagged With: , , , ,
June 8, 2020 By

Q&A: Picking your estate’s executor

Dear Liz: One issue in a recent column was about a sibling who did not follow the will. As executor, the sibling took two thirds of the estate instead of the will’s specification of half.

This is why, when my wife and I had our estate plan created, we told the attorney that none of the beneficiaries should be the executor of our wills and none should be a trustee of our trusts. Indeed, our trusts — which own almost our entire estate — cannot have the spouse, child, parent or in-law of a beneficiary as a trustee.

Answer: Yours is certainly one solution, if you can find the appropriate people to serve. But naming an heir as executor or trustee doesn’t have to be a disaster, as long as you name the right person — someone who is honest, dependable and able to serve with integrity.

Filed Under: Estate planning, Q&A Tagged With: , ,
June 8, 2020 By

Q&A: Social Security spousal benefits count as yours

Dear Liz: My husband is 69 and taking his Social Security benefit. I will be 62 in November and would like to ask if I can take half of his amount when I turn 62 and let mine grow until my full retirement age of 66 and 8 months? Or am I only able to collect mine at 62?

Answer: You can’t take a spousal benefit and let your own retirement benefit grow. When you apply for Social Security, you will be “deemed” to be applying for both benefits and you’ll get the larger of the two. You won’t be able to switch later. Applying at 62 means accepting a permanently reduced benefit. Some people don’t have much choice, but if you can continue working or tap other retirement funds, waiting is usually the better option.

Filed Under: Q&A, Social Security Tagged With: , ,
June 8, 2020 By

How filing taxes could generate your coronavirus stimulus check

Dear Liz: My adjusted gross income in 2019 was too high for me to get a stimulus relief payment. However, my income this year will be much lower and I would qualify. Will I automatically get the stimulus payment when I file my 2020 return or is there something I must do to get the money?

Answer: Just file your 2020 taxes and you’ll get the money.

The recent relief checks of up to $1,200 per adult were created using a refundable credit that will apply to 2020 taxes. (Refundable credits reduce your tax bill dollar for dollar, with any excess refunded to the taxpayer.)

The structure of this refundable credit has created some confusion. Many people thought the payments would reduce the refund they would normally get, but that’s not the case. Rather, the relief checks are an advance on a credit that has been added to their 2020 taxes. When people file their 2020 tax returns, they’ll deduct their relief payments from that new credit. (And although the credits are refundable, the money doesn’t have to be paid back if you got a payment but your 2020 income turns out to be too high.)

If you didn’t get a payment but you qualify based on your 2020 income, you’ll get the credit when you file.

Filed Under: Coronavirus, Q&A, Taxes Tagged With: , ,
June 8, 2020 By

Q&A: Pitfalls of unequal will distributions

Dear Liz: You’ve written that when writing their wills, parents should be careful about leaving unequal distributions to their children. What wasn’t mentioned was that a person could have a “good” child and a “bad” one. The “bad one” has never done a thing for the parent, such as inviting her to the child’s home at Thanksgiving or Christmas, and only visits the parent in the summer when the parent just happens to live at the beach. The “good” one is very attentive and visits the parent even in winter, and so on. What is your thinking in inheritance in this case?

Answer: It’s your money, and there’s no one right way to divide an estate. However, it’s disturbing that your assessment of your children seems to be based solely on how much attention you get.

It’s possible one child acts more selfishly or thoughtlessly than the other. It’s also possible that you are difficult to please, and one child understandably limits the time she spends trying to do so.

Filed Under: Estate planning, Follow Up, Q&A Tagged With: , ,