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Liz Weston

Why Millennials Should Care About Medicare Right Now

February 23, 2018 By Liz Weston

Medicare provides basic health care to one out of six Americans, most of them 65 and older. Even people decades away from retirement, though, should be concerned about Congress meddling with the program.

Lawmakers understand that cutting current retirees’ benefits is a political nonstarter. Older people vote, and they have one of the most powerful lobbyists, AARP, advocating on their behalf.

Younger people? Not so much. Politicians will be tempted to foist the biggest cuts on people farther away from retirement (who are presumably paying less attention).

In my latest article for the Associated Press, why it’s crucial that Millennials begin to think a

Filed Under: Liz's Blog Tagged With: Medicare, millennials, Retirement

Thursday’s need-to-know money news

February 22, 2018 By Liz Weston

Today’s top story: 5 pieces of popular tax advice that are actually baloney. Also in the news: VW aims to plug into nostalgia with the electric bus, Social Security is underpaying thousands of widows and widowers, and 33% of Americans don’t have more savings than credit card debt.

5 Pieces of Popular Tax Advice That Are Actually Baloney
Popularity doesn’t make them true.

VW Aims to Plug Into Nostalgia With Electric Bus
We’re going back to the 60’s.

Social Security underpays thousands of widows and widowers
Claiming a larger benefit.

33% of Americans do not have more savings than credit card debt
A third of the country is in trouble.

Filed Under: Liz's Blog Tagged With: credit card debt, Savings, Social Security, survivors benefits, tax advice, Volkswagen, VW bus

Wednesday’s need-to-know money news

February 21, 2018 By Liz Weston

Today’s top story: How debt settlement can make a bad money situation worse. Also in the news: Using an IRA as a legal, last-minute way to lower your taxes, 4 reasons why it’s smart to buy a used cell phone, and how to budget as a freelancer.

Debt Settlement Can Make a Bad Money Situation Worse
Not the perfect solution.

An IRA Is a Legal, Last-Minute Way to Lower Your Taxes
There’s still time for 2017 taxes.

4 Reasons It’s Smart to Buy a Used Cell Phone
Saving on new-to-you tech.

How to Budget as a Freelancer
Budgeting when income isn’t reliable.

Filed Under: Liz's Blog Tagged With: budget, cell phones, debt, debt settlement, freelancing, IRA, Retirement, Taxes, tips, used cell phones

Tuesday’s need-to-know money news

February 20, 2018 By Liz Weston

Today’s top story: 5 items that make any hotel room feel like home. Also in the news: 3 “tax-friendly” states that are anything but, the best thing you’ve done to get your finances in order, and 5 gas mileage myths that are wasting your money.

5 Items That Make Any Hotel Room Feel Like Home
You don’t have to feel like a stranger while on the road.

This Harsh Tax Can Make These 3 “Tax-Friendly” States Anything But
Nevada, Texas, and Washington.

What’s the Best Thing You’ve Done to Get Your Finances in Order?
Share your tips.

5 gas mileage myths that are wasting your money
You can leave the air conditioning on.

Filed Under: Liz's Blog Tagged With: gas mileage, hotels, myths, New York, Taxes, tips, traveing, Washington

Q&A: An inexpensive lawyer in the suburbs is fine for smaller estates

February 19, 2018 By Liz Weston

Dear Liz: My wife and I have updated our will and trust every 10 years. So far we’ve been sorely disappointed. The local bar association recommended some attorneys, but they were relatively young, inexperienced, unable to answer a lot of our most basic questions, and produced documents that I could have created on my home computer. It seems as though the most experienced attorneys are downtown in tall office buildings with equally tall price tags while the suburbs get the new graduates, the generalists or the estate planning attorneys who didn’t make it in the big leagues. Can you recommend a referral source that will actually suggest someone who is experienced, specializes in estate planning and won’t require us to drive 40 miles to downtown?

Answer: The first question that must be asked is whether yours is a big-league estate.

If your joint estate is worth more than $22.4 million, the current estate tax exemption limit for a married couple, you probably should swallow your distaste and hire a skyscraper-based attorney. You’ll need expert help dealing with estate tax issues, and that doesn’t come cheap.

If your estate is not in the big leagues, you should still be able to hire a competent, experienced attorney if you do sufficient research beforehand. Understand that software will be drafting your plan, regardless of which lawyer you choose.

What you’re paying for is advice on the documents you need, assurance that those documents are prepared correctly and help getting the deeds for your real estate recorded for your trust, said Jennifer Sawday, an estate planning attorney in Long Beach. Good estate planning attorneys have seen the many ways an estate plan can go wrong so they can give the guidance needed to help you avoid disaster and create the outcomes you want.

Sawday said the best source of referrals maybe your CPA or tax preparer. Your tax pro has a good idea of your financial situation and probably has referred many other clients to good attorneys. Financial planners and attorneys who specialize in other areas can often recommend someone as well.

“Professionals don’t refer to other professionals time and time again who give bad service or otherwise generate unhappy clients,” Sawday said.

Interview two or three attorneys before you decide. You’ll typically have to pay a consultation fee, but you’ll have a much better idea of whether they can answer your questions to your satisfaction.

The suburbs, by the way, are precisely where you’re likely to find reasonably priced, competent attorneys, since they don’t have the same overhead costs as the skyscraper set.

Filed Under: Estate planning, Q&A Tagged With: Estate Planning, q&a

Q&A: When rolling your 401(k) into an IRA isn’t a good idea

February 19, 2018 By Liz Weston

Dear Liz: I have just retired. I have a 401(k) from work. Do I keep it as is or do I roll it over into an IRA?

Answer: Investment companies and their representatives like to push the idea of rollovers as the best option, but that may profit them more than it does you.

Leaving your money in your employer’s 401(k) has several potential advantages. Many 401(k)s offer access to institutional funds, which can be much cheaper than the retail funds available to IRA investors. Workplace retirement plans also offer unlimited protection from creditors if you’re sued or forced to file bankruptcy. An IRA’s bankruptcy exemption is limited to $1,283,025, and protection from creditors’ claims varies by state. (In California, for example, only amounts “necessary for support” are out of reach of creditors.)

If you retired early, you can access your 401(k) without penalty at age 55. The typical age to avoid penalties from IRA withdrawals is 59½.

You may opt for a rollover if your 401(k) offers only expensive or poorly performing options. Even if you decide to roll over the rest of your 401(k), though, get a tax pro’s advice before you roll over any company stock. You may be better off transferring the stock to a taxable account now so you can let future appreciation qualify for capital gains rates. Ask your tax pro how best to take advantage of this “net unrealized appreciation.”

Filed Under: Q&A, Retirement Tagged With: 401(k), IRA, q&a, Retirement

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