Thursday’s need-to-know money news

imagesToday’s top story: five money mistakes we all make. Also in the news: the high costs of commuting, which monthly payments you should keep or drop, and exposing the hidden fees that eat up your retirement savings.

5 Money Mistakes Even Diligent Savers Make
And how to avoid them.

The High Cost of Your Daily Commute
All that time spent in the car can add up quickly.

12 Monthly Payments You Should Add – or Drop
To keep or not keep Netflix?

FeeX Exposes the Hidden Fees that Eat Up Your Retirement Savings
A warning system for fee deductions.

10 tips for grocery shopping on a budget
This year’s crazy weather has driven up the cost of food.

Wednesday’s need-to-know money news

Zemanta Related Posts ThumbnailToday’s top story: How to cope with retirement’s biggest stressors. Also in the news: Why you should check your credit score, the financial conversations you should have before getting married, and what you need to ask before hiring a real estate agent.

Five top stressors in retirement and how to cope
Health plays a huge role.

13 Reasons to Get Your Credit Scores
No news is not always good news.

Money Experts Say When it Comes to Marriage, It Pays to Talk
The conversations you need to have before walking down the aisle.

5 Questions to Ask Before Choosing a Real Estate Agent
Asking questions upfront could save you time and money.

9 Ways to Live Large for Less
Who doesn’t want to rent a castle?

Tuesday’s need-to-know money news

Zemanta Related Posts ThumbnailToday’s top story: What to do when you forget to pay your taxes. Also in the news: How to make sharing finances in your marriage less painful, 4 things you need to do before buying a home, and how writing out your budget could help you save money.

Help! I Forgot to Pay My Taxes
Waiting to pay will only make things worse.

Sharing Finances in a Marriage: 5 Stats You Should Know
How to make sharing your finances as stress-free as possible.

You Need to Do These 4 Things Before Buying a Home
Educate yourself.

5 Tips When Purchasing a Gift for a Teacher
It’s that time of the year again.

How Not Automating Your Budget Can Help You Spend Less
Write it out.

Monday’s need-to-know money news

Zemanta Related Posts ThumbnailToday’s top story: Why many Americans are afraid of going broke when they retire. Also in the news: The expensive cost of payday, pawn shop and car title loans, tips on how to increase your credit score, and what you can do to fix your credit report.

Many Americans fear going broke in retirement
How prepared are you for retirement?

The Ugly Truth About Payday, Pawn Shop and Car Title Loans
That immediate solution to financial problems could come with a triple digit interest rate.

How to Increase a Credit Score: 5 Tips
Closing your accounts doesn’t always help.

Should You Pay Someone to Help Fix Your Credit Problems
Find out what you can do on your own first.

Q&A: Social Security Benefits and Divorce

Dear Liz: I am 53 and divorced. My ex-husband died at the age of 49 and had contributed significantly to Social Security. I don’t plan to remarry. Would I be able to make any claim on his record as an ex-spouse when I reach age 62, or would he have had to reach retirement age for this to be possible?

Answer: If your marriage lasted at least 10 years, you could get the same benefits as a widow or widower. We’ll assume your ex was “fully insured” under Social Security, which means he paid enough into the system to qualify for benefits.

For the sake of brevity, we’ll also assume that you’re not disabled or caring for his minor or disabled child. (You could still qualify for benefits if any of these were true, but the rules would be somewhat different.)

Your survivors’ checks would be based on what he would have received had he survived until retirement (a sum known as his primary insurance amount). If he had been 62 or older when he died and had started receiving Social Security checks, your benefit would have been based on what he was actually receiving.

You can start survivors’ benefits as early as age 60 if you’re not disabled. If you start benefits before your own full retirement age, however, your benefits will be reduced because of the early start. Another thing to keep in mind is that if you don’t apply until age 62 or later and your own retirement benefits are larger than your widows’ benefit, you’ll get your own benefit instead.

On the other hand, you’re allowed to switch from his benefit to your own at any point between age 62 and age 70. It’s possible that your own benefit, left untouched to grow, eventually could exceed your survivors’ benefit. Obviously, this decision will involve crunching some numbers to see which approach makes the most sense. The Social Security Administration suggests you contact your local office or call (800) 772-1213 to learn how much you could receive on your ex’s work record, since that’s not information you can access online.

One other thing you should know: Since you’d be getting survivors’ rather than spousal benefits, you could remarry after you reach age 60 without endangering your checks. Those whose exes are still alive have to refrain from remarrying if they want their spousal benefits to continue.

Q&A: Regular 401(k) vs Roth 401(k)

Dear Liz: I just turned 50. My company has an option to contribute pretax money to a regular 401(k) or after-tax money into a Roth 401(k). Should I put the maximum contribution ($17,500) plus the catch-up ($5,500) into the Roth? Or should I split my contributions?

Answer: Given that you’re close to retirement, putting most of your contributions into the traditional 401(k) is probably the way to go.

Most people’s tax brackets drop once they retire. That means you can benefit from a bigger tax break now and qualify for a lower rate on your future withdrawals.

If you had a few decades until retirement, the math might be different. Younger people with good prospects may well be in a lower tax bracket currently than they’ll eventually be in retirement. In their case, it can make sense to gamble on making after-tax contributions to a Roth 401(k), betting that their tax-free withdrawals in retirement will be worth much more.

You may want to put some money into the Roth 401(k) so you’ll have flexibility with your tax bill in retirement. Being able to choose between taxable and nontaxable options gives you what financial planners call tax diversification. But the bulk of your contributions should still go to the traditional 401(k).

Q&A: An offer of “help”

Dear Liz: My husband and I lost our home because of unemployment and being underwater (the value of the house was less than the mortgage). We now both are working full time and saving to buy another home. My father-in-law offered to help us by selling us a rental he owns and giving us a loan for $150,000. We also would have to get another loan of about $100,000.

In addition to paying him principal and interest, my father-in-law also wants us to pay the $900 rent he was getting for the home. Please advise us if you think this is a good arrangement. Is it fair for him to ask for the rental money too?

Answer: Of course not. He’s essentially asking you to pay for the property twice.

Most parents instinctively want to give their offspring a better deal than they would give a stranger. Your husband’s father is the exception — he’s asking you to agree to a deal that no stranger would consider.

Given this man’s inclination, you probably don’t want him as your banker or your landlord, let alone both. Keep saving your money and improving your credit scores so you can swing a home purchase on your own.

Friday’s need-to-know money news

Split Wedding CakeToday’s top story: How to determine whether to rent or buy. Also in the news: Becoming a better car buyer, how to save during wedding planning, and how to protect your finances during a divorce.

Is It Better to Rent or Buy?
These calculators will help you decide.

3 Ways to Be a Better Car Buyer
Negotiating is key.

6 Secrets From Couples Who Saved Big on Their Weddings
The before.

Keep an Eye on Finances During a Divorce
And the after.

5 Tips to Calculate Your Financial Worth
Knowing what you should be paid is essential during a job hunt.

Thursday’s need-to-know money news

1594411528_1512b1aad5_zToday’s top story: The pros and cons of becoming a landlord. Also in the news: The painless way to create a budget, which metro areas have the best cost of living, and why you need to change you eBay password immediately.

Is Becoming a Landlord Worth It?
Passive income is great, but it can come with some big headaches.

6 Ways to Ease the Pain of Crafting Your First Budget
It doesn’t have to be excruciating.

The Best Places To Live If You Want Extra Money At The End Of The Month
Places where the cost of living won’t swallow your paycheck.

EBay Asks Users to Change Passwords After Cyber-Attack
Another major site gets hacked.

17 tips for quickly paying down student loans, from someone who paid off $74,000 in 2 years
Two years!

Wednesday’s need-to-know money news

Zemanta Related Posts ThumbnailToday’s top story: Why new graduates need to keep a close watch on their identities. Also in the news: How to get someone to resolve your banking complaints, why travel medical insurance is essential for international travel, and five ways to start saving for your child’s education.

4 Ways New Grads Are Vulnerable to Identity Theft
Protecting yourself and that diploma.

How to Get Your Banking Complaints Resolved
Knowing who to complain to could change everything.

Travel Medical Insurance: Don’t Leave Without it
Don’t rely on your existing insurance to cover you internationally.

5 Ways to Save for Your Child’s College Education
The earlier you start, the more you can save.

My Dream Retirement: 5 People Reveal Their Strategies
How to save for your ultimate retirement.