Liz Weston

This week’s money news

September 23, 2024 By Liz Weston

This week’s top story: Harris v. Trump on student loans. In other news: What the Fed’s rate cutting plans mean for the housing market, what small-business owners need to know about digital security, and how to watch football without cable.

Harris v. Trump on Student Loans: Where the Candidates Stand
As president, Harris would likely champion student loan relief and free community college. Trump would likely restrict or dismantle loan forgiveness and promote access to non-traditional degrees.

What the Fed’s Rate Cutting Plans Mean for the Housing Market
If lower mortgage interest rates are finally here, what does that portend for potential home buyers, refinancers and sellers?

What Small-Business Owners Need to Know About Digital Security
Any small-business that has an online presence may be vulnerable to digital security breaches and cyber attacks. Consulting with professionals and being proactive about policies can help protect your business.

How to Watch Football Without Cable
Finding all the football on TV isn’t as easy as it used to be, but there are good options for every fan.

Q&A: More about health savings accounts and the ‘deathbed drawdown’

September 23, 2024 By Liz Weston

Dear Liz: I just read your column on HSA accounts. I was with you right up until “deathbed drawdown.” I sincerely hope that I am not thinking about my HSA when I am nearing death. I’d just rather pay the tax.

Answer: That’s certainly your prerogative, but financial planners note that good record keeping can allow those with large HSA balances to avoid an otherwise unnecessary tax bill.

HSAs offer a rare triple tax break: contributions are tax-deductible, the money grows tax deferred and withdrawals are tax free when used for qualifying medical expenses. Furthermore, HSAs can be rolled over from year to year and invested for growth, which has led some people to accumulate substantial sums as a supplement to their retirement funds.

Fortunately, you don’t have to take a withdrawal in the same year you incur an unreimbursed medical expense. As long as the expense was incurred after you established the HSA and before your death, it can justify a tax-free withdrawal years or even decades later. Those who have kept good records of their unreimbursed medical expenses can justify last-minute withdrawals if necessary.

Q&A: Spreading the wealth in health savings accounts

September 23, 2024 By Liz Weston

Dear Liz: I have a family health savings account with a qualifying high-deductible health insurance plan. The HSA will become my individual account when my youngest turns 26 and no longer qualifies for our insurance plan. My husband can’t contribute to an HSA because he’s on Medicare. I have read that if I die before him, he can use my HSA for his own medical expenses. Can I use my HSA to pay his medical expenses now, even though I can’t contribute to it on his behalf?

Answer: Yes. A spouse can use HSA funds for the qualifying medical expenses of a spouse as well as other dependents, according to Mark Luscombe, principal analyst for Wolters Kluwer Tax & Accounting.

If you want to pass the funds to your husband should you die first, you should make him the designated beneficiary of the account. Otherwise, the account could become taxable at your death, as mentioned in last week’s column.

Q&A: A retirement catch-22 and health savings accounts

September 23, 2024 By Liz Weston

Dear Liz: My wife and I are withdrawing an unusually large amount from our IRAs in order to make a 20% down payment on the construction of a new retirement home. This withdrawal will, unfortunately, bring our modified adjusted gross income above the limits that will cause increases in our Medicare premiums in 2026. Is there any way to avoid this increase?

Answer: You have the right to appeal an increase in your premiums, but successful appeals usually require someone to have experienced a drop in income due to retirement, a spouse’s death or divorce, for example. A one-time increase in your income — because of a large IRA withdrawal or capital gains from the sale of a home, for example — usually won’t qualify for relief.

As you know, Medicare’s income-related monthly adjusted amount (IRMAA) adds surcharges to Part B and Part D premiums when incomes exceed certain amounts. In 2024, IRMAA starts when modified adjusted gross income exceeds $103,000 for individuals or $206,000 for married couples filing jointly. There’s a two-year delay between when you report your income and when IRMAA increases your premiums.

The good news is that the increase isn’t permanent. If your income goes back to normal next year, so will your 2027 premiums.

This week’s money news

September 17, 2024 By Liz Weston

This week’s top story: The busiest travel days around Thanksgiving. In other news: 4 social media money trends worth knowing about, what happens when the Fed finally cuts rates, and weekly mortgage rates drop.

The Busiest Travel Days Around Thanksgiving
If you can avoid traveling the Sunday after Thanksgiving, you’ll avoid the worst of the Thanksgiving travel crowds.

4 Social Media Money Trends Worth Knowing About
Here, we’re tackling four of the latter set, laying out what you need to know about these trends, how they could benefit you and some potential downsides.

What Happens When the Fed Finally Cuts Rates?
NerdWallet writers spell out what an expected rate cut will mean for mortgages, savings accounts and more.

Weekly Mortgage Rates Drop, Creating Opportunities for Refinancers
If you’ve been waiting for rates to fall in order to refinance, your wait might already be over.