Get smart with your money
Today’s top story: Finding your tax refund. Also in the news: How long you should keep your tax records, when to pay for ‘free’ shipping, and 7 steps towards financial literacy for your kids.
Where’s My Tax Refund?
Tracking down your refund.
How Long Should You Keep Your Tax Records?
What to keep and what to toss.
When to Pay for ‘Free’ Shipping
When “free” is worth the cost.
7 Steps Toward Financial Literacy For Your Children
It’s never too early for them to learn.
You want to save as much as possible for retirement. The financial services industry wants to make as much money off you as it can.
That thorny conflict is at the heart of the battle over what is known as the “fiduciary rule.” If implemented, it would require financial advisers to put clients’ best interests first when counseling them about retirement savings. In practice, it typically would prevent financial pros from steering you into a high-cost investment if similar low-cost choices are available.
The differences in fees — often fractions of a percent — may sound minuscule.
Over time, though, higher fees can dramatically reduce the amount of money that investors accumulate for retirement, according to the Securities and Exchange Commission and other investor watchdogs, and significantly increase the chances that savers will run out of money late in life.
In my latest for the Associated Press, how to save money for retirement without making the financial services industry even richer.
Today’s top story: April 18th isn’t just the tax-filing deadline. Also in the news: Why so many credit cards are from Delaware, how to file a tax extension online, and lowering your tax bill with IRA contributions.
April 18 Isn’t Just the Tax-Filing Deadline
Other items to add to your to-do list.
Why So Many Credit Cards Are From Delaware
The answer may surprise you.
How to File a Tax Extension Online
Don’t delay when you need more time.
Reminder: You Have Until Tomorrow to Lower Your Tax Bill With IRA Contributions
Tick-tock.
Dear Liz: My 25-year-old son is a new investor. He put $11,000 ($5,500 each for 2016 and 2017) into an IRA in a money market fund with a discount brokerage firm. He doesn’t want to get into the market yet because he thinks it is in a bubble. I’m afraid with this strategy, he could be sitting there for a long time losing out to inflation. How would you present this argument?
Answer: You might ask him when he plans to enter the market. When stocks fall 10%? 20%? More? If stocks do tumble to his target level, there are likely to be plenty of scary headlines indicating that the market could fall further. Will he be able to follow through on his plan or will he put off investing — and miss the inevitable rise that will follow?
Newbie investors, and even some more experienced ones who should know better, often think that they can time the market. They can’t. They’re better off diving in with a well-diversified portfolio and adding to it regularly without worrying about the day-to-day swings of the market. Your son won’t need this money for decades, so there’s no sense fretting about what might happen tomorrow or next week. Over the next 40 years, he’ll see significant gains — but only if he gets off the sidelines and puts his money to work.
Dear Liz: Despite having high credit card debt (about $35,000), which I am working hard to pay off, my FICO score is consistently over 765 and I have never been denied credit — until now. I was recently denied for a card because of “high debt to earnings” (I earn about $85,000 annually.) Could that be because I recently co-signed for a $15,000 education loan for my grandson? I trust him completely to pay off the loan, but is it now showing on my credit history as money owed even though it is not payable until after he graduates?
Answer: You’d need to check your credit reports to be sure, but it’s entirely possible the new loan is already showing up and affecting your scores. Your debt-to-income ratio was high even before adding this loan, though, so it’s not surprising that the credit card company balked.
It’s unfortunate that you weren’t clear about this when you co-signed, but you’re on the hook for that student loan every bit as much as your grandson is. If he misses a single payment, you could see your credit scores lose 100 points or more overnight.
If you want to protect your credit scores and have the opportunity to get good credit card deals in the future, continue to pay down your debt. Also, consider making the payments on the education loan yourself and having your grandson reimburse you. That’s really the only way to make sure a missed payment won’t torpedo your scores.