Monday’s need-to-know money news

1994-08-033 002Living within your means with a smile on your face, getting the most from your credit score, and separating fact from fiction with life insurance.

5 Tips for Frugal Living That Won’t Leave You Feeling Miserable
Living within your means doesn’t mean misery.

What’s the Lowest Credit Score You Can Get?
Don’t let your fear of The Number prevent you from monitoring your credit.

6 Worst Myths About Life Insurance
Separating fact from fiction.

7 Courses Finance Students Should Take
Studying beyond the numbers.

Does College still pay off?
Are the degrees still worth the dollars?

In case you missed it: car leases, celebrity estate disasters and how to choose your first credit card

Chevy VoltHere’s a column I never thought I’d write: “Sometimes, leasing a car is the right option.”

Most people are way better off financially if they buy cars slightly used and own them for at least 10 years. Even if you want to buy new, you’ll save a fortune (at least $250,000, by my calculations) by not trading your car in every few years. In most cases, leasing just encourages you to overspend on your wheels and ties you to never-ending car payments. Not good.

But there are situations where leasing actually makes sense, and those are outlined in the column.

Plenty of famous people have left seriously messed-up situations when they died. Lawsuits over the estates of Marilyn Monroe and Jimi Hendrix continued decades after they died. A court recently overturned a settlement in the James Brown estate, a situation complicated by the question of whether he was actually married when he died. Jerry Garcia’s estate plan appointed his third wife as a fiduciary for the second wife and the second wife’s children, legally requiring Wife #3 to put Wife #2’s interests ahead of her own…even though Wife #3 was also a beneficiary. Yikes.

I chose five other more recent but equally spectacular cases of celebrity estate disasters in “5 celebrities who messed up their wills.”

Back in June I wrote about “Why young people hate credit cards.” The good news, that people in their 20s and 30s have less credit card debt, is offset by the bad news, which is that credit cards, responsibly used, help build your credit scores and qualify you for better rates on mortgages, auto loans, insurance and more. If you’ve decided you do want some plastic after all, check out Doughroller’s “5 steps to choosing your first credit card.” Just remember that there’s no reason to carry debt to improve your scores, and that you should pay off your balances in full every month.

Friday’s need-to-know money news

RelationshipDetermining credit worthiness, how money problems distract workers, how to develop good financial habits, and what to do when you have student loans from multiple lenders.

The Non-Credit Score Numbers Your Lender Wants to Know
Looking beyond your credit score to determine your credit worthiness.

Personal Finance Problems Distract Workers
Stress over finances can cause a loss of productivity.

Finance Tips for 20-Somethings
How to get and stay on a secure financial track.

13 Happy Events That Need a Financial Plan
Graduation, marriage and parenthood are just some of life’s celebrations that need financial planning.

Get Schooled on Student Loan Consolidation Rights
Find out what options you have when it comes to multiple loans.

Spousal vs. survivor benefits: a primer

Dollar mazeJudging from emails and comments, plenty of people are confused about how Social Security benefits for spouses and ex-spouses are supposed to work. That’s unfortunate, since these benefits can help many people get larger checks than what their own earnings record will give them. If you are or ever have been married to someone whose earnings are substantially greater than your own, you need to know how this works.

First, some basics. Spousal and survivor benefits are based on the work record of what I’m calling the “earner” (the other spouse). You can’t get both your own benefit (based on your work record) AND a full spousal or survivor benefits on top of that. You typically get the largest benefit for which you qualify. (In some cases, you’ll get your own benefit plus an amount that together equals the largest benefit for which you qualify.)

Here are a few key points:

Spousal benefits (for current and former spouses) are based on 50% of the earner’s benefit at the earner’s full retirement age. Full retirement age is currently 66 and will be 67 for people born after 1960. If the spouse applies for benefits before the spouse’s own full retirement age, the benefit will be permanently discounted.

  • If you’re currently married, the earner must have already applied for Social Security benefits for you to apply for spousal benefits. The earner does have the option to “file and suspend,” where the earner applies for benefits and then immediately suspends the application. That allows the spouse to apply for spousal benefits while the earner’s benefit can be left alone to grow.
  • If you’re divorced (but were married at least 10 years and haven’t remarried), the earner needn’t have applied to start Social Security benefits but the earner needs to be at least 62. If you remarry, you can’t apply for benefits as a divorced spouse unless that subsequent marriage ends.

Spousal benefits don’t reduce what the earner receives (or what other current and former spouses may receive).

If you wait until your own full retirement age to apply, you can start receiving spousal benefits and then switch to your own benefit when it maxes out at age 70. For high earners, this “claim now, claim more later” can add tens of thousands of dollars to the lifetime amounts you receive from Social Security. If you start benefits early, however, that option isn’t available to you.

Survivors benefits (for current and former spouses) can be up to 100% of the earner’s Social Security benefit. If the earner hadn’t begun receiving Social Security checks, the survivor’s benefit is based on what the earner would receive at full retirement age. If the earner was receiving Social Security when he or she died, the survivor’s benefit is based on that amount the earner was actually receiving. (This is why it’s often smart for the bigger earner to delay starting Social Security at least until full retirement age, if not longer, especially if the earner’s survivor will depend on that benefit.)

As with other Social Security benefits, applying for survivor benefits before you reach your own full retirement age will result in a reduced check. However, with survivor’s benefits, you can receive a reduced check as early as age 60. (The earliest you can get spousal benefits is 62.) The starting age is even earlier—50—if you are disabled and the disability started before or within 7 years of the worker’s death, or at any age if you take care of the deceased earner’s child who is under age 16 or is disabled and receives benefits on the worker’s record.

Unlike spousal benefits, a late remarriage won’t cut off your checks. If you remarry after you reach age 60 (or age 50 if you’re disabled), that marriage will not affect your eligibility for survivors benefits.

AARP has a primer about how to maximize your Social Security benefits that’s well worth reading. T. Rowe Price has a free calculator to help you determine the best time to take benefits. If you want a more robust tool, check out www.MaximizeMySocialSecurity.com for a $40 version that allows you to play with more

Thursday’s need-to-know money news

Detroit stationDebt collectors are spying on creditors through social media, what consumers can learn from Detroit, and is it time to become the boss?

Are Debt Collectors Stalking You Online?
That friend request you just accepted might not be someone interested in playing Candy Crush with you.

3 Personal Finance Lessons Learned From Detroit’s Bankruptcy

Control your debt before it takes control you.

6 Ways to Prepare for Unexpected Financial Events
Expecting the unexpected could be the thing that pulls you through.

5 Basic Money Errors Retirees Make
From giving away money to relatives, to not keeping a budget, these mistakes can tarnish your golden years.

Making the Jump to Self-Employment
Are you ready to become your own boss?

Wednesday’s need-to-know money news

Zemanta Related Posts ThumbnailGetting a mortgage with bad credit, busting financial myths, and how to survive back-to-school shopping with your teenager.

How to Get a Mortgage With Bad Credit

Buying a home is still possible even with bad credit.

7 Personal Finance Myths That May Have Fooled You

Mythbusting, finance style.

5 Financial Decisions That Sound Smart But Are Really Dumb
What sounds good at that time could be bad in the long run.

How to Avoid New Bank Fees
Tips on avoiding the ever growing list of bank fees.

How to Handle Back-to-School Shopping With Teens
Back-to-school shopping with your teen doesn’t have to be a nightmare.

How to deal with your debt

Zemanta Related Posts ThumbnailDebt may be a four-letter word, but it’s not necessarily the enemy. Some debts are much, much worse than others, and knowing which to tackle first can leave you richer.

That’s the central idea of my book “Deal with Your Debt,” and I go into more detail in this interview with Experian’s Mike Delgado. (Also, you’ll get a great view of one of our bedrooms…I couldn’t get my laptop to cooperate with Google Hangout, so I had to resort to the desktop.)

We covered a bunch of topics, including:

  • What you need to know about getting, and paying off, student loans
  • Why retirement has to be your top financial goal (yes, even ahead of paying off debt)
  • What debts to tackle first and
  • When to consider filing for bankruptcy

…and much more.

Zero waste: our progress so far

Garbage dumpA few weeks ago I wrote about how the “zero waste” movement had inspired me to look for ways to cut back on the garbage our family generated. I’m not aiming to eliminate all the waste. I’m looking for ways to be a bit gentler on the planet while, hopefully, saving money and not adding inordinately to my workload. Turns out there are plenty of ways to do that.

Here’s what has happened so far:

The composter’s in place. I bought this beauty for $20 from the City of Los Angeles, and got a worm bin for an additional $5. (The worm bin is basically a plastic tote with a few holes drilled in the top.) Then I bought an attractive little bin to sit on my countertop for another $20. Nope, the little bin wasn’t at all necessary, but it’s easier to use than the large plastic peanut butter jar with a screw-top lid it replaced…and it looks a heck of a lot better sitting out in the open. My husband’s an artist, and he’s taught me to consider aesthetics at least occasionally.

The little bin holds about 12 cups of food scraps, vegetable peels and other kitchen waste, and I empty it into the composter at least every other day. That’s a lot of garbage being redirected to a better use.

This is also getting me to think more about ways to cut back on kitchen waste, particularly on food that’s not getting eaten. That’s meant more consistent meal planning and using up leftovers, which helps reduce our grocery bill.

The reusables are getting used. I bought a reusable plastic cup with lid and straw from Starbucks and keep it in the car along with a commuter mug. So far, all the places I’ve asked—Jamba Juice, coffee joints, even fast food restaurants—have been fine with letting me use my own cup instead of one of their disposable versions. This doesn’t save me any money (well, maybe 10 cents at Starbucks) but it doesn’t cause much inconvenience, either. Ditto for the reusable shopping bags, which now live (mostly) in the car rather than scattered throughout the house.

I’m giving props to my city. I had a vague idea that Los Angeles was recycling more stuff than in the past, but the list has gotten amazingly long—way longer than in many other communities I’ve read about. In addition to the usual suspects of glass, paper, aluminum and plastic, LA recycles:

  • Styrofoam containers
  • Wire and plastic hangers
  • Drink cartons (for juice, wine, milk, heavy cream…you name it)
  • Plastic bags (including grocery and dry-cleaning bags)
  • Aerosol cans (with the plastic tops removed)lastic toys
  • Plastic toys
  • All aluminum, tin, metal and bi-metal cans
  • Clean aluminum foil
  • Clean film plastic

I’m still looking for ways to reduce the volume of what we discard (more on that in a later post), but for right now I’m pleased that a lot more stuff can go into the blue recycling bin and a lot less into the black trash bin. Again, no big savings that I can see, but also no inconvenience encountered.

If you’ve found ways to reduce waste and save money, I’d love to hear about them!

 

Tuesday’s need-to-know money news

School Kids DiversitySaving on back-to-school shopping, tool to make managing your money easier, and what you need to do financially when your marriage comes to an end.

Be Smart on Back-to-School Shopping
How to fill their backpacks without emptying your wallet.

8 Money Tools You Should Try
8 tools to make managing your money much easier.

How To Reduce Your Debts Without Spending Unnecessarily
You shouldn’t have spend money to get out of debt.

Save Your Way to $1 Million Dollars
It might be easier than you think!

We’re Getting A Divorce, Now What?
Ways to protect yourself financially when your marriage comes to its end.

Survivor benefits: what you can expect

Dear Liz: Two years ago, I elected to start my Social Security benefits early, at age 62. My current benefit is $1,350 per month. My spouse, currently working, will be turning 62 next year and is also planning to take an early retirement benefit because of health issues. Her benefit is expected to be slightly more than my benefit at that time. If she dies before me, what can I expect to collect from Social Security as the spouse of someone who started benefits early?

Answer: If your wife dies before she begins receiving Social Security, your survivor’s benefit would be based on what’s known as her “primary insurance amount.” That’s the amount she would receive at full retirement age (which is 66 for those born between 1943 and 1954; after that, full retirement age increases gradually to age 67 for those born in 1960 or later).

Once she begins benefits, though, your survivor’s benefit is based on what she’s actually getting. So if she receives a reduced benefit, your survivor’s benefit is reduced as well. It would be further reduced if you, as a widower, begin taking survivor’s benefits before your own full retirement age.

You would not be able to get your own benefit plus a survivor’s benefit if your wife should die, by the way. You would get the larger of the two, but not both.