Get smart with your money
Today’s top story: Is Bitcoin safe? Also in the news: How to buy better gifts with credit card rewards, must-have tools and tips for year-end retirement planning, and smart money lessons for kids that can last a lifetime.
Is Bitcoin Safe?
A roundtable debate.
How to Buy Better Gifts With Credit Card Rewards
Using your rewards strategically.
Must-have tools and tips for year-end retirement planning
Getting on the right track.
Smart money lessons for kids that can last a lifetime
Today’s top story: How not to go broke attending holiday parties. Also in the news: Self-taught financial advisers keep it real about money, how to determine if your taxes are going up, and how to spend your extra FSA money.
You Don’t Have to Go Broke Attending Holiday Parties
Having fun without breaking the bank.
Self-taught financial advisers keep it real about money management
Knowing your limits.
My Taxes Probably Are Going Up. Are Yours?
How to determine next year’s taxes.
How to Spend Your Extra FSA Money
The clock is ticking.
Today’s top story: How to live below your means without feeling deprived. Also in the news: How to dodge the drama of family loans, the launch of Apple Pay Cash, and using Social Security benefits to plan your retirement income.
How to Live Below Your Means Without Feeling Deprived
It doesn’t have to be a slog.
Family Loans: How to Dodge the Drama
Coping with one of the touchiest subjects.
Apple Pay Cash Launches: How It Stacks Up
A new money transfer app.
An almost perfect retirement income source
Using Social Security benefits to plan your retirement income
A “safer” payday loan sounds like an oxymoron. Critics have branded these notoriously high-cost loans as debt traps that cause borrowers to go ever deeper in the hole.
Thanks to a recent regulatory change, it now may be possible for banks to offer small, short-term loans that could be a lot less dangerous for borrowers. Whether banks will actually do so remains to be seen.
The right moves could save low- and moderate-income Americans billions of dollars a year. The wrong moves could create yet another sinkhole for those who are already struggling. In my latest for the Associated Press, how to avoid falling into the payday loan trap.
Dear Liz: The wife and I are both 65. We both work, with a combined income of $125,000, of which we spend almost all. We have $550,000 in IRAs and $1 million in other investments, plus home equity of about $500,000. We’ll get $3,800 from Social Security if we start next year but plan to work until age 67. Should we wait until then to claim?
Answer: Both of you needn’t wait, but one of you should — the one who has the larger benefit.
As a married couple, you can get two checks — either two retirement benefits, or a retirement benefit and a spousal benefit that can equal up to half the primary retirement benefit. When one of you dies, the survivor will receive only one benefit, which will be the larger of the two checks you received as a couple.
It makes sense to maximize that benefit by waiting as long as possible to claim so that it can grow. After your full retirement age, which is currently 66, unclaimed retirement benefits grow by 8% each year you wait, until maxing out at age 70.
You have substantial investments that should sustain a comfortable retirement, but plenty of things could go wrong.
The fact you’re spending all your current income is worrisome. If you don’t ratchet back your consumption a bit at retirement, you may draw down your investments at a rate that isn’t sustainable. (Depending on your investment mix, an initial withdrawal rate of 3% or 4% usually is considered “safe,” or the most you should take to minimize the odds of running out of money.)
Even if you do rein in your regular spending, bad markets or unexpected expenses could cause you to exhaust your savings faster than you expect. The longer you live, the greater the odds you’ll run short of money. Maximizing one of your Social Security benefits can be a smart way to ensure you, or your survivor, have more income when you may need it most.
Before you retire, you should consult a fee-only financial planner about the best ways to tap your retirement accounts and claim Social Security.
Dear Liz: I’ve heard that authentication apps are a better way to go than two-factor authentication that texts codes to your cell phone. Can you explain more?
Answer: Two-factor authentication adds an additional layer of security to financial, email, social media, cloud storage and other accounts. The first factor is something you know, which is a typically a password, and the second is something you have, such as a code that’s texted to you or generated by a device or authentication app.
The second factor is important, since passwords can be guessed or stolen in database breaches. Texted codes can be intercepted by hackers, so security experts recommend using an authenticator. Three popular apps are Google Authenticator, LastPass Authenticator and Microsoft Authenticator.
To use an authenticator, you must first enable two-factor authentication on the account you want to protect. Unfortunately, not every account provider offers two-factor authentication, although they should. You can find whether yours does at twofactorauth.org.
If the account provider supports authentication, you’ll typically be asked to take a snapshot of a QR code using the authenticator app to establish a connection between your account and the app. When you later log in to those sites, you’ll be asked to type in the code randomly generated by the app.
Any security approach can be thwarted, but the idea behind two-factor authentication is making your accounts hard enough to crack that most hackers will move on to an easier target.