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Liz Weston

Wednesday’s need-to-know money news

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Today’s top story: 5 ways businesses can get ahead of stalled supply chains. Also in the news: What you need to know about Medigap Plan A, traveling without a vaccine, and questions to answer before buying a house with a friend.

5 Ways Businesses Can Get Ahead of Stalled Supply Chains
Virtually no small business has been spared from recent supply chain disruptions.

What Is Medigap Plan A? What You Need to Know
Medigap Plan A offers all of the “basic benefits” included in every Medicare Supplement Insurance plan without any extras.

Ask a Travel Nerd: Can I Travel Without a COVID Vaccine?
Traveling while unvaccinated, whether domestically or internationally, will introduce some challenges.

Answer These Questions Before Buying a House With a Friend
Make it through the process with your friendship intact.

Tuesday’s need-to-know money news

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Today’s top story: 5 things small businesses need to know about the Metaverse. Also in the news: Grads left behind $3.7B in free college aid in 2021, buying your next used car online, and why you should teach your kid to invest while they’re still a kid.

What Is the Metaverse? 5 Things Small Businesses Need to Know
The metaverse is coming — eventually. Here’s what you need to know in the meantime.

Grads Left Behind $3.75B in Free College Aid in 2021, Study Says
An estimated 813,000 Pell-eligible high school graduates didn’t submit the FAFSA in 2021, a college access nonprofit found.

Buy Your Next Used Car Online
Learning how to navigate online car dealerships can help you find your next used car from the comfort of your home.

Why You Should Teach Your Kid to Invest While They’re Still a Kid
Teaching them to save is good; teaching them to invest might be even better.

The mental health risks of retiring

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The late Pamela Hixon of Leipsic, Ohio, was eager to retire from her job running a hospice agency. Soon after she quit, however, Hixon spiraled into depression and anxiety. She sought help from counselors and her pastor, but it wasn’t enough. Six months after retiring, she took her own life.

“She lost purpose, she lost significance, she lost a sense of meaning in her life,” says her son Tony Hixon , a Findlay, Ohio-based wealth manager who wrote about the experience and how it transformed his financial planning practice in a book, “Retirement Stepping Stones: Find Meaning, Live with Purpose, and Leave a Legacy.”

Overall, retirees are a contented bunch and many report being happier in retirement than they were at the end of their careers. Older adults are less likely than younger people to experience major depression, says Brent Forester, president of the American Association for Geriatric Psychiatry.

In my latest for the Associated Press, how to manage the challenges of retirement and how to get help.

Monday’s need-to-know money news

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Today’s top story: How to crush your holiday debt. Also in the news: A new episode of the Smart Money podcast on paying for Covid tests, needing booster shots before you travel, and small business trends that are here to stay.

How to Crush Your Holiday Debt
Here’s what you can do to take control of your holiday debt.

Smart Money Podcast: COVID Tests, and Reversing a Credit Score Drop
This week’s episode starts with a discussion about how to get COVID-19 tests right now.

Will You Need a COVID-19 Vaccine Booster to Travel?
Travel rules remain in flux, so be sure to check your destination’s requirements.

These Small-Business Pandemic Trends Are Here to Stay
Virtual services, social media and online sales will continue to be key to small business success in 2022 and beyond.

Q&A: When a lower credit score might not be cause for alarm

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Dear Liz: I sold my house, paid off my mortgage and then got a new mortgage for another home in 2021. When I applied for the new mortgage, my credit score was 830. After buying the home, my score dropped to the low 700s. It’s gone up only 2 points in seven months. I have no other debt. What’s going on?

Answer: Remember, you don’t have one credit score, you have many. When you applied for a mortgage, you typically would be shown three older-generation FICO scores — one from each of the three major credit bureaus (Equifax, Experian and TransUnion). Your interest rate would have been based on the middle number. If your scores were 840, 830 and 700, for example, your rate would be based on 830. Any score over 740 typically gets the best rate and terms on a mortgage, all else being equal.

The score you’re monitoring now was probably created from a different scoring model. If the score is a FICO score, it probably was created from an updated formula such as FICO 8 or FICO 9. It’s also possible that you’re viewing a VantageScore 3.0 or 4.0. VantageScore is a FICO competitor.

If you’ve been monitoring the same score all along and it actually dropped 100 points since your application, then something else is going on. Please check your credit reports from all three bureaus and look for a skipped payment, a collection or some other serious problem.

Q&A: Where to park cash?

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Dear Liz: I turned 72 in December and took my first required minimum distribution. With the goal of purchasing property next year, should I put the funds — $6,000 — in my Roth IRA or just put it in my bank savings account? Also, should I convert my traditional IRA to a Roth or just leave it alone?

Answer: To contribute to an IRA or Roth IRA, you must have earned income such as wages, salary or self-employment income. If you don’t have earned income, your contribution would be considered an excess contribution that could incur a 6% penalty for each year the money remained in the account.

You don’t have to be working to convert a traditional IRA to a Roth, but there’s typically not much reason to do so at this point unless you intend the money to go to your heirs and want to pay the income taxes rather than have them do so. Even then, you should run this idea past a tax pro or a financial planner since conversions can create other problems, such as higher Medicare premiums.