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Liz Weston

Book Giveaway: Smart Mom Rich Mom by Kimberly Palmer

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smartmomrichmom1I’m giving away a copy of Kimberly Palmer’s Smart Mom, Rich Mom: How to Build Wealth While Raising a Family.

Of all life’s financial shocks, few compare to bringing home an infant. Just one tiny person costs $250,000 to raise– not including college!

How will you pay for it? That agonizing question fuels mothers’ choices about their careers, budgets, and families. Some lean in, some scale back or seek new opportunities–there are no easy answers . . . but lots of rewarding possibilities.

Smart Mom, Rich Mom explores how women today are navigating the financially challenging career/parenting years. Written by a national money columnist and mom of two, the book chronicles people who have stayed in the game–full-time, freelance, self-employed, and more–and emerged more prosperous and empowered.

To enter to win, leave a comment here on my blog (not my Facebook page). Make sure to include your email address, which won’t show up with your comment, but I’ll be able to see it. Comments are moderated, so it may take a little while for your comment to show up.

The winners will be chosen at random Friday night. Over the weekend, please check your email (including your spam filter). If I don’t hear from a winner by noon Pacific time on Monday, his or her prize will be forfeited and I’ll pick another winner.

Also, check back here often for other giveaways.

The deadline to enter is midnight Pacific time on Friday. So–comment away!

Monday’s need-to-know money news

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Zemanta Related Posts ThumbnailToday’s top story: Advice from people who paid off student loans. Also in the news: How to turn a bad day into a tax break, why Austin, Texas is the best city for job seekers, and the bank account score agencies you’ve never heard of.

Advice From 3 People Who Paid Off Student Loan DebtTips from the experts.

How to Turn a Bad Day Into a Tax Break
Looking for the silver lining.

Study: Austin, Texas, Is the Best City for Job Seekers in 2017
Head to the Lone Star State.

The bank account scoring agencies you’ve never heard of
ChexSystem and Early Warning Services.

Q&A: Don’t bequeath trouble to your descendants

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Dear Liz: I have two grown children, neither of whom owns a home, and three grandchildren. I would very much like to keep my house in the family for all to use, if and when needed. It is not large, and it would be somewhat difficult for two families to live here at the same time. I have a trust that splits everything between the two children. I also have handwritten a note and had it notarized explaining I would like the house kept in the family and not sold or mortgaged. Can you advise me?

Answer: Please think long and hard before you try to restrict what the next generation does with a bequest, particularly when it’s real estate. Is your desire to keep the house in the family worth causing rifts in that family?

It would be hard for two families to share even a large home. You could be setting up epic battles, not only over who gets to live there but how much is spent to maintain, repair and update the home. It’s difficult enough for married couples to own property together; siblings are almost certain to disagree about how much to spend and the differences may be even greater if only one family is actually using the house.

If your house is sold, on the other hand, it could provide nice down payments for each family to buy its own home. Alternatively, one family could get a mortgage to buy out the other and live in the house. Or the home could be mortgaged to provide two down payments and then rented out. Your notarized note wouldn’t prevent your children from doing any of these things, but it may cause them unnecessary guilt and disagreements about honoring those wishes.

Q&A: Claiming an adult child as a dependent

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Dear Liz: I am paying rent for my adult son in another state. He gets occasional help from various services, but if I don’t want him to sleep on the street, I have to pay his rent and send some emergency food. I don’t see this changing. Can I claim him as a dependent or would that make me responsible for his health insurance, which I cannot afford?

Answer: Yes, you would be responsible for your son’s health insurance coverage if you claimed him as a dependent, said Carolyn McClanahan, a certified financial planner with Life Planning Partners in Jacksonville, Fla. That would mean either paying for coverage or paying the fine for not having coverage. The fine for 2016 is $695 per adult or 2.5% of your household adjusted gross income, whichever is greater. The penalty is capped at $2,085, which is likely much more than what you’d save with an additional exemption. If you’re in the 25% tax bracket, a $4,050 personal exemption is worth a little over $1,000.

The IRS has many rules about dependents, and standards for claiming adult children are much higher when they’re over 19 (or over 24 for full-time students). To qualify, your son would have to earn less than the amount of the personal exemption ($4,050 in 2016) and you must have provided more than half of his support, among other rules. The IRS has an interactive tool to help people determine dependents’ eligibility at https://www.irs.gov/uac/who-can-i-claim-as-a-dependent.

Q&A: How much risk is too much in retirement?

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Dear Liz: If you have all your required obligations covered during retirement, is having 70% of your portfolio in equities too risky?

Answer: Probably not, but a lot depends on your stomach.

Retirees typically need a hefty dollop of stocks to preserve their purchasing power over a long retirement, with many planners recommending a 40% to 60% allocation in early retirement. A heftier allocation isn’t unreasonable if all of your basic expenses are covered by guaranteed income, such as Social Security, pensions and annuities. Ideally, those pensions and annuities would have cost-of-living adjustments, especially if they’re meant to pay expenses that rise with inflation.

Historically, retirees have been told they need to reduce their equity exposure as they age, but there’s some evidence that the opposite is true. Research by financial planners Wade Pfau and Michael Kitces found that increasing your stock holdings in retirement, where the allocation starts out more conservative and gets more aggressive, may reduce the chances of running short of money. Their paper, “Reducing Retirement Risk with a Rising Equity Glide-Path,” was published in the Journal for Financial Planning and is available online for free.

That said, you don’t want your investments to give you ulcers. If you couldn’t withstand a big downturn — one that cuts your portfolio in half, say — then you may want to cushion your retirement funds with less risky alternatives.

Friday’s need-to-know money news

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interest-rates-300x225Today’s top story: 7 questions and answers about the fed rate hike. Also in the news: How to avoid the Social Security tax bubble, how the fed rate hike could affect your student loans, and how not to be tricked by retailers’ “regular prices.”

Fed Rate Hike: 7 Questions (and Answers)
What you need to know.

How to Avoid the Social Security ‘Tax Bubble’
Know how and when Social Security benefits are taxed.

Fed Rate Hike: What It Means for Student Loans
How your loans might be affected.

Don’t Be Tricked by Retailers’ Unreal Regular Prices
Don’t fall for the bait-and-switch.