Get smart with your money
Today’s top story: Tax breaks and loan options to pay for college. Also in the news: Why you should buy a home after school starts, how to refinance your student loans, and how to de-stress your retirement program.
Tax Breaks and Loan Options to Pay for College
Easing the burden.
4 Reasons to Buy a Home After School Starts
Less buyer demand.
How to Refinance Your Student Loans
Getting a better deal.
How to de-stress your retirement plan
Taking a deep breath.
Today’s top story: How to save for college without sacrificing retirement. Also in the news: Recovering from a poor credit history, 3 ways to pay off a debt in collections, and the best savings strategies for your personality type.
How to Save for College Without Sacrificing Retirement
It’s possible to do both.
Poor Credit History? There Are Ways to Recover
Making a comeback.
3 Ways to Pay Off a Debt in Collections
Getting debt collectors off your back.
Here Are the Best Savings Strategies for Your Personality Type
Are you the gambling type? Or a goal-setter?
My artist husband likes to say that if I were in charge of our spending, we’d be sitting on milk crates instead of furniture and that if he were in charge, we’d have no retirement accounts.
The fact that we have both nice furniture and retirement funds is a testament to compromise — and the wealth-building power of marriage.
Married people are significantly wealthier than single people in every age group, and the gap tends to widen as people approach retirement age. Married couples age 55 to 64 had a median net worth, excluding home equity, of $108,607 in 2011, the latest available Census Bureau figures show. By contrast, single men in the same age bracket were worth a median $14,226 and single women $11,481.
Income and education also contribute heavily to wealth — and to the likelihood that people will marry. But a 15-year study of 9,000 people found that even after controlling for those and other factors, marriage itself contributed to a 4 percent annual increase in net worth. The same study found that wealth typically began to drop four years before a divorce, which ultimately reduced people’s wealth by 77 percent.
Since marital status is so powerfully associated with financial status, people would be smart to view marriage as a business arrangement in addition to a romantic one. Taking a few pages from the business world has certainly made our 19-year marriage stronger as well as wealthier.
In my latest for the Associated Press, a look at what works for us and how to apply it to your own marriage.
Today’s top story: When and how much a Fed rate hike will cost you. Also in the news: The art of lowering your bills, how to become Social Security savvy, and why you should check your credit report after getting married.
Fed Rate Hike: When and How Much It Will Cost You
What to expect when the Fed pulls the trigger.
Ace the Art of Lowering Your Bills
Treat it like a science.
Are You Social Security Savvy?
What you know and don’t know.
Check Your Credit Report for Inquires After You Get Married
Checking for changes.
Dear Liz: I am confused. I thought all wives were entitled to Social Security if the husband’s earnings qualified. My husband is deceased and he received a larger Social Security benefit than I because he worked longer in a qualified system. We were married almost 49 years. Most of my earnings are from a job that didn’t pay into Social Security. I was told because I had a high retirement income, I could not qualify for a percentage of my husband’s benefit. I didn’t know there was an income basis for Social Security. My income was severely reduced when he died. I appreciate any resource in understanding Social Security you could provide.
Answer: It sounds like your survivor’s benefits were eliminated by something known as the “government pension offset,” or GPO. While this sounds draconian, the GPO is actually meant to ensure that people in your situation don’t wind up getting a bigger benefit than people who paid into the Social Security system.
If you had paid into Social Security, you would get the larger of either your own benefit or your husband’s after his death. You wouldn’t be able to continue receiving both checks. Since you’re receiving a government pension from outside the Social Security system, you would be receiving much more than a typical survivor if you could keep that pension AND get your husband’s check. The GPO reduces your survivor benefit by two-thirds of your government pension to compensate. If your pension is big enough to completely eliminate your survivor’s benefit, that means you’re still better off than you would have been just receiving your husband’s check.
Dear Liz: I would like to know how to close credit card accounts and not get a bad credit rating for doing so. We are trying to improve our credit after filing for bankruptcy seven years ago.
Answer: If you’re trying to improve your credit, then avoid closing credit accounts. Doing so can’t help your scores and may hurt them. Credit-scoring formulas are sensitive to how much of your available credit you’re using. The formulas like to see a wide gap between your credit limits and the amount you charge, both on individual cards and in the aggregate. When you close an account, you reduce your available credit, which narrows that gap and can ding your scores.
If you want to speed up your recovery from the bankruptcy, continue using the cards lightly but regularly and paying the balances in full every month. Make sure to pay all your bills on time so that a skipped payment doesn’t undo all the progress you’ve made. Review your credit reports and dispute any errors, including accounts that were included in the bankruptcy but are still showing up as active debts.
That doesn’t mean you can never close unwanted credit accounts. You just don’t want to do so now, or when you’re in the market for a major loan. You can close an account or two once your scores are in the high 700s on the 300-to-850 FICO scale and you don’t plan to apply for credit in the near future.