Liz Weston

Tuesday’s need-to-know money news

July 16, 2019 By Liz Weston

Today’s top story: What to do when back-to-school bites you in the budget. Also in the news: Advice and warnings for starting your own cannabis business, why Millennials need to build credit smarts and find out of your state is having a back-to-school tax-free weekend.

What to Do When Back to School Bites You in the Budget
You’ll need to prioritize.

Advice and warnings for starting your own cannabis business
The new Green economy.

Millennial Money: Credit score up? Build credit smarts, too
Protect your score.

Find Out If Your State Is Having a Back-to-School Tax-Free Weekend in 2019
Did your state make the list?

3 steps to keep ‘solo agers’ happier and safer

July 16, 2019 By Liz Weston

Retirement coach Sara Zeff Geber visited several Northern California assisted living facilities to interview “solo agers” — people, either single or coupled, who don’t have children to help them as they grow older.

At many facilities, she couldn’t find any. That puzzled her until she realized that adult children are often the ones pushing the move into long-term care facilities.

“Who is it that gets mom or dad to move out of the two-story, single-family home?” says Geber, founder of LifeEncore coaching service in Santa Rosa, California. “The kids badger and cajole.”

In my latest for the Associated Press, how ‘solo agers’ can protect themselves and live a happy life on their own.

Monday’s need-to-know money news

July 15, 2019 By Liz Weston

Today’s top story: Logical credit moves that can lead to trouble. Also in the news: Investing is within Millennials’ reach, ditch the dealership with online used car sellers, and what you should know about the qualified small business stock tax exclusion.

5 ‘Logical’ Credit Moves That Can Lead to Trouble
Common sense doesn’t always work in your favor.

Take Heart, Millennials — Investing Is Within Your Reach
Just make sure your financial foundation is strong.

Ditch the Dealership With Online Used Car Sellers
Get in the driver’s seat from your couch.

If Your Compensation Package Includes Stock, You Should Know About This Tax Rule
The qualified small business stock exclusion.

Q&A: This son’s failure to launch is hurting his parent’s finances

July 15, 2019 By Liz Weston

Dear Liz: I have a 24-year-old son who has been trying to get through college for nearly seven years. I have helped him with direct gifts and by co-signing loans, but I am pretty tapped out. He tells me he has one year left but has no way to pay for it. He is disorganized and not particularly motivated, although he does talk about things he’s learning and I think is at least somewhat committed to school (he maintains about a B to C average at the state school he attends). He has moved back home to save money and is working full time but had gone many months without a job in the last year. He accumulated credit card debt and generally is a financial disaster.

Do I take out a second mortgage or co-sign another loan, which would be a stretch for me, or do I watch him drop out of school, which seems a really harsh life lesson? I know he might be able to take a year off and then go back, but let’s be honest — if he takes a break, it becomes less likely that he’ll ever return.

Answer: You sound like you’re more than tapped out. You already may be overextended because those private education loans you co-signed are just as much your responsibility as his — and he doesn’t sound like a terrific credit risk, at least at this point. Doubling down by borrowing more money doesn’t seem like the wisest choice for either of you.

Taking a break from school could increase the chances he won’t get his degree, but it also could give him time to get his financial life in better shape and perhaps tackle some of the issues impeding his progress. His disorganization and slow pace through school could point to an underlying problem such as a learning disability or attention-deficit/hyperactivity disorder (ADHD). His college may have a counseling center that could connect him with resources to help, or you could ask your family physician for a referral.

Q&A: Keeping pace with retirement saving

July 15, 2019 By Liz Weston

Dear Liz: My wife is distressed by your recent column about how many multiples of salary are needed to retire. She interpreted the column as saying you must have the sum total of those numbers. So if you need one times your salary saved at 30, three times by 40, six times at 50 and eight times at 60, she thinks you would need 18 times your salary in total by age 60, or $1.8 million if you earn $100,000. I interpreted it to mean that your target would be $800,000 at age 60. Am I wrong?

Answer: You are interpreting the guidelines correctly: You would need eight times your salary at 60, not 18 times. The numbers, by the way, come from Fidelity Investments and are meant as general guidelines for people hoping to retire at 67 (at which point, Fidelity says they should have 10 times their salaries saved). Your needs may vary; some people will need less, some will need more. People who have large traditional defined benefit pensions, for example, may not need to save as much, while those who want to retire early or indulge in expensive hobbies, such as traveling or supporting adult children, may need to save more.

Guidelines tend to be the most helpful when you’re many years away from retirement and only guessing about how much money you’ll need. Once you’re five to 10 years from your desired retirement age, you should have a better handle on your likely expenses and sources of income. Well before you actually retire, though, you should consider consulting with a fee-only, fiduciary financial planner for a second opinion on your retirement plans. (“Fee only” means the advisor is compensated only by fees paid by clients, rather than through commissions or other arrangements. “Fiduciary” means the advisor is required to put your interests first.)

The National Assn. of Personal Financial Advisors, the XY Planning Network and the Garrett Planning Network all represent fee-only planners and can offer referrals.