Get smart with your money
Millions of Americans get their health insurance and retirement accounts through their employers. Now some are getting help with their debt.
Companies including insurer Aetna and accounting firm PwC help employees pay down student loans. Others partner with startups to offer debt solutions as an employee benefit. In my latest for the Associated Press, a look at the approaches employers are taking to help employees with debt.
Today’s top story: 10 lessons from the Bull Market’s 10-year anniversary. Also in the news: Money mistakes even smart people make, 3 things that change when you’re a homeowner, and why you should check your credit report even if your credit is frozen.
10 Lessons From the Bull Market’s 10-Year Anniversary
Learning from the past decade of rising stock prices.
Money Mistakes Even Smart People Make
Avoiding unwise choices.
3 Things That Change When You’re a Homeowner
A whole new set of responsibilities.
Check Your Credit Report Even If Your Credit Is Frozen
Freezes don’t ice existing accounts.
Dear Liz: My friend is not good with money. He has always lived above his means. He lived in a fancy apartment, leases a BMW and goes out to eat often. To make matters worse, he lost his job a year ago and had to move in with a mutual friend. He continues to spend money he doesn’t have. I tried to help him with his finances and setting a budget, but he lost interest after one conversation. He’s 41 with no savings and more than $10,000 in credit card debt.
My question: Should I feel guilty about inviting him to things? When he was unemployed, I suggested doing things that don’t cost money, but he never seemed interested. I’m planning a trip for my 40th birthday and I’d like to invite him, but I don’t think he has the self-control to say, “No, I can’t go, I can’t afford it” because it will add $2,000 or more to his debt. How do you deal with someone when you’re more concerned with his financial well-being than he is?
Answer: You let go of the idea that you’re responsible for another person’s behavior.
Financial planners often encounter clients who, despite the planners’ best efforts, sail blissfully on toward economic disaster. And those clients paid for the advice that could save them. You’re not being paid. Your friend may not have even asked for your help. So you can stop offering it.
This will be hard for you. You understand how important it is to avoid credit card debt and save for the future. You may be thinking that if you could come up with the right words, you could persuade him to change his ways. Give up that fantasy, because he won’t change — if he ever does — one second before he’s ready.
There are a number of things you can do to prepare for that moment, if it ever comes. The first is to let go of any judgmental attitudes and feelings you might have about his situation. He may already feel a lot of shame about his circumstances. Even if he doesn’t, he’s unlikely to seek you out if he feels judged and blamed.
The next is to look for other resources that might help him, such as a financial counselor or coach. You can get referrals from the Assn. for Financial Counseling & Planning Education. He may find it easier to work with a professional than a friend.
Finally, resist the urge to offer opinions or observations about his situation. He knows you’re there to help if he ever wants it, so wait to be asked.
Dear Liz: I read your column about the disabled woman who was asking about survivor benefits. I am 60 and my husband died when he was 65, but he was not receiving Social Security. We both paid into Social Security for our entire working careers and maxed out every year. I have been told that I can receive his benefits when I am 65. I wonder why I cannot collect his benefits now.
Answer: You can, but you may not want to if you’re still working and earning the kind of six-figure income needed to “max out” your Social Security taxes.
People who start Social Security benefits early are subject to an earnings test that withholds $1 in benefits for every $2 they earn above a certain amount, which in 2019 is $17,640. Social Security has a calculator to help you determine the effect on your benefit at https://www.ssa.gov/oact/cola/RTeffect.html. Your survivor’s benefit also will be reduced if you start it before your own full retirement age, which in your case is either 66 years and 8 months (if you were born in 1958) or 66 years and 10 months (if you were born in 1959).
Once you’ve reached full retirement age, however, the earnings test goes away, as does the reduction for starting benefits early. At that point, you could apply for full survivor benefits and leave your own retirement benefit alone to grow 8% each year until it maxes out at age 70. You can continue to work and receive benefits without facing any reductions.
Social Security can be astoundingly complex, and claiming decisions can be affected by a number of factors. AARP has a free Social Security claiming calculator, but it can’t deal with some situations such as survivor’s benefits, child benefits (for retirement-age people who have minor children) or the offsets associated with pensions that don’t pay into Social Security. For those, you would need to pay about $40 to use a more sophisticated calculator such as the one at MaximizeMySocialSecurity.com, or to consult a fee-only financial planner with experience in this area.
Today’s top story: 3 things that will change when you’re a homeowner. Also in the news: 3 times you can pay taxes with plastic and come out ahead, eight ways you can save money right now, and what happens if you default on a loan.
3 Things That Change When You’re a Homeowner
All you’ll think about is money.
3 Times You Can Pay Taxes With Plastic and Come Out Ahead
Build up your rewards.
Eight Ways You Can Save Money Right Now
Automate your savings.
What Happens if You Default on a Loan?
Don’t take it lightly.
Today’s top story: Money mistakes even smart people make. Also in the news: 3 reasons to choose a college based in price, the pros and cons of moving abroad for health care, and which state has the highest average credit card debt.
Money Mistakes Even Smart People Make
We all make them.
3 Reasons to Choose a College Based on Price
Spend less time in debt.
Should You Move Abroad for Health Care?
The pros and cons.
Where credit card debt is the worst in the US: States with the highest average balance
Where does your state rank?