Ask Liz Weston

Get smart with your money

Liz Weston

Thursday’s need-to-know money news

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Today’s top story: How to save for 2017 and 2057 at the same time. Also in the news: What new prepaid debit card rules mean for you, life insurance strategies for families with special needs children, and the high cost of using an ATM.

How to Save for 2017 and 2057 at the Same Time
Saving for the immediate and long-term future.

What the New Prepaid Card Rules Mean for You
Easier to understand terms and more security.

A Life Insurance Strategy for Families With Special-Needs Children
Making sure your loved ones are taken care of.

You won’t believe average cost of using an ATM
The crazy cost of accessing your own money.

Wednesday’s need-to-know money news

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common-retirement-mistakesToday’s top story: How to tell if your 401(k) is a dud. Also in the news: How to find unclaimed property, great tax deductions for retirees, and how to sneak more savings into your budget.

How To Tell If Your 401(k) Is a Dud
Reviving your retirement fund.

Are You Owed Money From a Forgotten Bank Account?
You could have unclaimed property.

5 Great Tax Deductions and Credits for Retirees
Maximizing your deductions.

How to Sneak More Savings Into Your Budget
You won’t even notice it’s gone.

Tuesday’s need-to-know money news

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2Today’s top story: How to decide if credit counseling is right for you. Also in the news: Robots and your bank account, why insurers and banks want to know your job title, and three ways to help your kid pick the right college.

When Credit Counseling Is (and Isn’t) a Good Idea
How to decide the right approach.

This Robot Wants to Have a Word About Your Bank Account
Meet the bank tellers of the future.

Why insurers and banks want to know your job title
Your job title could determine your interest rate.

Three ways to help your kid pick the right college
Talk about finances right away.

Borrowing your way out of debt

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how-are-debt-consolidation-loans-handledMany people who take out loans to pay off credit cards and other obligations wind up worse off, with more debt and more stress than before they applied. Some people, though, successfully use debt consolidation loans to turn a bad financial situation around.

In my latest for the Associated Press, a look at debt consolidation loans and how to keep yourself out of the debt trap.

Q&A: Social Security survivor’s benefit

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Dear Liz: My husband will retire next spring but has wisely decided to not collect Social Security until he is 70. I have been retired for several years and have been collecting my Social Security benefits, which are significantly less than what his will be because he was the higher wage earner. Should he die before age 70, would I still be able to claim, as his surviving spouse, his larger benefit, even though he would not have started collecting it yet? The information I read only talks in terms of the higher wage earner already collecting Social Security benefits before his or her demise.

Answer: Even if your husband dies before starting Social Security, you can collect the larger benefit he’s earned, including any delayed retirement credits from putting off his application.

Those delayed retirement credits increase his benefit, and yours as the surviving spouse, by 8% each year between his full retirement age of 66 and age 70. That can make a huge difference in the quality of life of the surviving spouse, who has to get by on a single check after the other partner dies.

Q&A: Paying credit card debt after death

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Dear Liz: I am 80 and I have a substantial amount of credit card debt, approximately $30,000. What becomes of this credit card debt in the event of my death? Will it become a future liability for my two sons or will this eventually become a bad debt for the credit card company? I would hate to see this become a financial burden for my sons.

Answer: Any credit card balances you leave behind will be a liability for your estate, not for your sons — although the debt could reduce any inheritance they get. Creditors have to be paid before any remaining assets are distributed. If you don’t have enough assets to cover the bill, creditors will get a proportionate amount of whatever’s left after paying your final expenses. Any remaining debt will be a write-off for the creditor, and your sons typically wouldn’t get anything.

You didn’t ask for help dealing with this debt, but you shouldn’t assume you can just tread water until you die and leave it for someone else to sort out. Your life expectancy at age 80 is another eight years if you’re male and nearly 10 years if you’re female, and you could live considerably longer. If overspending or medical bills led to the debt, you could accrue a lot more before you’re done. If you rack up so much debt that you can’t make the minimum payments, your interest rates could skyrocket and you may have to fend off collection calls.

You should at least discuss your options with an experienced bankruptcy attorney and with a nonprofit credit counselor.