Ask Liz Weston

Get smart with your money

Liz Weston

Tuesday’s need-to-know money news

By

Today’s top story: 4 student loan refinancing myths debunked. Also in the news: Colleges that will pay for your degree through work, Sallie Mae launches credit cards aimed at millennials, and why you should stay away from wedding loans.

4 Student Loan Refinancing Myths Debunked
How to determine if it’s the right move for you.

These Colleges Will Pay Tuition, but You’ll Work for It
Trading labor for tuition.

Sallie Mae launches new credit cards aimed at millennials and Gen Z. Are they right for you?
Another Sallie Mae bill to pay.

Stay away from wedding loans
The bad way to say “I do.”

3 sites to help aging parents organize details

By

Certified financial planner Sean Fletcher of San Francisco knew his dad had an estate plan, complete with a health care directive detailing what medical treatment should be given in an emergency. When the father had a massive heart attack, though, no one knew where he kept those documents.

Fletcher’s family was lucky: An aunt found the paperwork in a closet. His mother was able to stop treatment according to his father’s wishes so that he could die more peacefully.

“Despite her misgivings, I believe this minor miracle gave my mom the confidence to carry out what she had agreed to do,” Fletcher says.

It’s not enough to be organized and responsible. We need to think about who will be responsible next. Fortunately, there are several sites that can facilitate that transition for our aging parents — and also for ourselves. In my latest for the Associated Press, three websites to help keep everyone organized.

Monday’s need-to-know money news

By

Today’s top story: Baffled by points and miles? Let the 80/20 rule guide you. Also in the news: How to turn around car payment trouble, 7 ways to make your money last in retirement, and 8 ways to save on wedding gifts.

Baffled by Points and Miles? Let the 80/20 Rule Guide You
The Pareto principle.

Car Payment Trouble? How to Turn It Around
Taking back control.

7 Ways to Make Your Money Last in Retirement
Budgeting for the future.

8 Ways to Save on Wedding Gifts
Great presents that won’t break the bank.

Q&A: Social Security minors’ benefits

By

Dear Liz: One thing I rarely see mentioned in discussions of when to take Social Security is the benefit for minors who are still in school. I took my benefit at 62. Social Security called me and told me that my daughter was eligible as well. We collected over $60,000 by the time she graduated high school.

Answer: Child benefits can indeed change the math of Social Security claiming strategies.

To get a child benefit, the parent must be receiving Social Security retirement or disability benefits. The child must be unmarried and benefits stop at age 18, unless she is still in high school — in which case checks stop at graduation or two months after she turns 19, whichever comes first. Child benefits are available for those 18 or older with a disability that began before age 22.

The child can receive up to half the parent’s benefit, although both benefits are subject to the earnings test if the parent started Social Security before his or her full retirement age. The earnings test reduces checks by $1 for every $2 the parent earns over a certain amount, which in 2019 was $17,640. Also, there’s a limit to how much a family can get based on one person’s work record. The family limit is 150% to 180% of the parent’s full benefit amount.

Many free Social Security claiming calculators don’t include child benefits as one of the variables they include, so if your child would be eligible it can make sense to pay $40 for a customized strategy from a more sophisticated calculator, such as the one at Maximize My Social Security.

Q&A: Don’t fall for Social Security phone scams

By

Dear Liz: I have just received a phone call advising me that my Social Security number “is about to be suspended” and that for help, I should call a certain number. Is this legitimate?

Answer: No. Your Social Security number can’t be locked or suspended or any of the other dire-sounding consequences these robo-callers threaten. If you did call the number, the scam artist on the other end would try to trick you into revealing personal information or convince you to wire money or buy gift cards, which they can quickly exchange (or “wash”) to erase their trails. People lost $10 million to these Social Security scams last year, according to the Federal Trade Commission.

Q&A: Don’t expect timeshares to increase in value

By

Dear Liz: I’m trying to get rid of my timeshare. Do you have any suggestions for me, as a single mom, on making any money from this? Even a few grand would be nice (and yes, I’ve tried both Craigslist and EBay). I paid a whopping $15,000 in 2010, so it’s paid for, but annual maintenance fees have just gone up each year. The fees are now over $1,100, and I fear for the future.

The developer is willing to take back my timeshare and not charge me the $1,000 they usually do. They act like they’re doing me this huge favor but I’m out $15,000! I was told by their sales representative it was real estate property that would increase in value. I’m just so sick to my stomach over this. Should I just give it back and walk away, or do you have anything you can think of for me to try to get even a small amount of money?

Answer: Timeshares should not be purchased, or sold, as an investment. The developer may raise the price of newly sold timeshares, but that doesn’t mean the one you purchased has any value at all on the resale market.

Clearly the sales rep deceived you, but timeshare contracts typically have a clause that absolves the developer from responsibility for anything sales reps say. Timeshare attorney Michael Finn of Largo, Fla., calls that the “license to lie” clause.

Your $15,000 is what economists call a “sunk cost.” You’re not going to get the money back. If you continue to try, you may fall victim to another type of scam, where con artists convince you that they can sell your timeshare — if only you pay them a hefty upfront fee.

You should take the developer up on its offer. Many developers won’t take back timeshares even if you pay them. Your other alternative is to try to sell it for $1 or less on a timeshare owners’ site such as Redweek or Timeshare Users Group, but sometimes owners have to offer to pay one or two years’ worth of maintenance fees just to convince someone else to take the timeshares off their hands.