Thursday’s need-to-know money news

Today’s top story: Are Medicare Advantage plans worth the risk? Also in the news: 4 ways women can invest in other women, 4 market headwinds facing first-time buyers, and 9 million Americans will get letters about missing stimulus checks.

Are Medicare Advantage Plans Worth the Risk?
Medicare Advantage plans offer extra coverage, usually at no cost, but you may pay more if you get sick.

4 Ways Women Can Invest in Other Women
Intentional investing can allow you to support women with your investment dollars.

4 Market Headwinds Facing First-Time Buyers
To find success in a housing market buffeted by the pandemic, buyers must be persistent, patient and preapproved.

9 million Americans will get letters about missing stimulus checks
Here’s where those notices are going.

Wednesday’s need-to-know money news

Today’s top story: Your credit history opens doors – here’s how to build it. Also in the news: what happens to your debt if your school closes for good, and exit strategies for young adults forced home during COVID-19.

Your Credit History Opens Doors — Here’s How to Build It
About 13% of Americans in a survey said that they don’t have a credit history, and some don’t know how to get started.

If Your College Closes for Good, What Happens to Your Debt?
You have two options.

Is That Nearly New Salvage-Title Car Really a Deal?
A few dealers now specialize in professionally rebuilt salvage-title vehicles. The risks remain, though.

Exit Strategies for Young Adults Forced Home During COVID-19
How to make the Great Escape.

Are Medicare Advantage plans worth the risk?

About 1 in 3 people 65 and older in the U.S. enroll in Medicare Advantage, the private insurance alternative to traditional Medicare. It’s not hard to see why: Medicare Advantage plans often cover stuff that Medicare doesn’t, and most people don’t pay extra for it.

But Medicare Advantage can be more expensive if you get sick because copays and other costs can be higher, says Katy Votava, president of Goodcare.com, a health care consultant for financial advisors and consumers.

Unhappy customers who want to switch back to traditional Medicare may find they no longer qualify for the supplemental policies to help pay their medical bills, or that they would face prohibitively high premiums.

“These are complicated products,” says Votava, author of “Making the Most of Medicare.” “They’re like nothing else, no other insurance that people encounter anywhere until they get to Medicare.”

In my latest for the Associated Press, making sense of the Medicare alphabet soup.

Tuesday’s need-to-know money news

Today’s top story: For lower-credit homeowners, refinancing is harder, but not hopeless. Also in the news: 4 home insurance pitfalls to avoid during hurricane season, survey finds majority of parents want personal finance taught in high schools, and how to decide between a 15-year and 30-year mortgage.

For Lower-Credit Homeowners, Refinancing Is Harder, but Not Hopeless
With lenders raising minimum qualifications, homeowners with scores below 700 may struggle to refinance.

4 Home Insurance Pitfalls to Avoid During Hurricane Season
Do not skip flood insurance.

Survey finds majority of parents want personal finance taught in high schools
Starting off on the right foot.

How to Decide Between a 15-Year and 30-Year Mortgage
The pros and cons of both.

Monday’s need-to-know money news

Today’s top story: Should I pay for my hotel using cash, points or both? Also in the news: A new episode of the SmartMoney podcast on fake reviews and saving too much, 5 travel writers draft their favorite airlines, and where to get relief if there isn’t a second stimulus check.

Should I Pay for My Hotel Using Cash, Points or Both?
Here’s how you can figure out which booking option offers the best value.

Smart Money Podcast: Fake Reviews and Saving ‘Too Much’
How to tell if that review is sincere.

5 Travel Writers ‘Draft’ Their Favorite Airlines
In the spirit of the popular sports-related pastime, we’ve created our own fantasy airline draft.

Where to Get Relief if There Isn’t a Second Stimulus Check
Look for aid locally.

Q&A: Finding affordable financial planning

Dear Liz: I’ve read your advice and that of many others to only use a fee-only financial planner. However, we’ve never felt like we could afford that expense, and many of the planners I’ve found wouldn’t take accounts as small as ours anyway. We’re in our mid-40s and feel like we’ve wasted many years waiting to be “ready” for a fee-only planner. Is it really better to have zero financial planning advice, rather than just using a free planner?

Answer: A “free” planner is typically an advisor who is paid by commission. You may not pay for the advice directly, but you could wind up with underperforming, overpriced investments because the advisor is not required to put your best interests first.

You can find certified financial planners who charge by the hour at Garrett Planning Network, and the XY Planning Network represents planners willing to charge monthly retainers. Many discount brokerages and robo-advisors offer access to certified financial planners, as well. You might also consider an accredited financial counselor or financial fitness coach, which you can find through the Assn. for Financial Counseling & Planning Education. Whereas many certified financial planners cater to higher income people, coaches and counselors handle issues relevant to middle- and lower-income Americans, including budgeting, debt management and retirement planning.

Q&A: Death, taxes and home sales: How to handle the mixture

Dear Liz: My wife and I bought our house 61 years ago in Southern California. The wife passed away seven years ago, and I became the sole owner. If I should die owning the house, I know my daughter will inherit and her tax basis will be the value of the house on that date. But if I sell the house, I’m not sure what my basis will be. Do I pick up the 50% of what the house was worth on the day my wife died and add to that the 50% of the original purchase price that would be mine? Or is my basis the original price of the house?

Answer: In most states, only your wife’s half of the home would get a new value for tax purposes at her death. In community property states such as California, though, both her half and yours get this step up in tax basis.

Tax basis determines how much taxable profit there might be when property and other assets are sold. For those who aren’t sure how tax basis works, a simplified example might help.

Let’s say Raul and Ramona bought their home for $40,000 in 1959. In 2013, when Ramona died, the home was worth $800,000. Today, it’s worth $1 million.

At her death, Ramona’s half of the home got a new tax basis. Instead of $20,000 (half of the purchase price), her half of the home now has a tax basis of $400,000 (half of its $800,000 value at the time).

In most states, Raul would keep the $20,000 tax basis on his half, so his combined basis in the home would be $420,000. If he should sell the home for $1 million, the profit for tax purposes would be $580,000.

In California and other community property states, the entire house gets a step up in basis to $800,000 when Ramona dies. If Raul sells the house for $1 million, the profit (or capital gain, in tax parlance) would be $200,000.

Of course, there would be no tax owed on this home sale, since Raul can exempt up to $250,000 of home sale profits. Raul could use Ramona’s home sale exclusion, and avoid tax on up to $500,000 of home sale profit, if he sells the home within two years of her death.

If Raul keeps the home until his death, on the other hand, it will get a further step up in tax basis equal to whatever the home’s fair market value is at the time (let’s say $1.2 million). If the daughter sells it for that amount, no capital gain tax would be owed.

Friday’s need-to-know money news

Today’s top story: What Biden on Trump could do for your student loans. Also in the news: Is moving now your best financial pros and cons, how to get a personal loan without perfect credit, and what to do when you can’t afford food.

What Biden or Trump Could Do for Your Student Loans
The pandemic plays a part.

Is Moving Now Your Best Financial Move?
Weighing the pros and cons.

You Don’t Need Perfect Credit to Get a Personal Loan
Bad-credit borrowers may have to take extra steps to get a loan. Start by fixing any errors on your credit report.

What to Do When You Can’t Afford Food
Millions of families are struggling.

Thursday’s need-to-know money news

Today’s top story: When debt relief does more harm than good. Also in the news: New ways to get more money for your old car, back-to-school tips for avoiding child identity theft, and the top sacrifices made by ‘super savers’.

When Debt Relief Does More Harm Than Good
The behavior has to change, too.

New ways to get more for your old car.
Online buyers make offers in minutes — a safety net for car shoppers wondering what their trade-in is really worth.

Back-to-School Tips for Avoiding Child Identity Theft
Teaching your kids about internet security.

Here are the top sacrifices made by ‘super savers’
Increase your savings by following these tips.

Wednesday’s need-to-know money news

Today’s top story: Should students gamble on an Income Share Agreement? Also in the news: How to make a debt-free switch to cashless payments, 4 home insurance pitfalls to avoid during hurricane season, and see how much home you can afford with the 30/30/30 rule.

Should Students Gamble on an Income Share Agreement?
An ISA can be a risk for students seeking college funding. But during an economic downturn, it might be worth it.

How to Make a Debt-Free Switch to Cashless Payments
Changing how we pay during the pandemic.

4 home insurance pitfalls to avoid during hurricane season
Don’t be skimpy.

See How Much Home You Can Afford With the 30/30/30 Rule
Existing home sale prices are increasing.