Get smart with your money
Widows and widowers are often told not to make any major decisions for a year or more after a spouse’s death. Grief can cause you to make choices you later regret.
Some financial tasks, though, shouldn’t be postponed. Revising your budget, meeting with a tax pro and securing access to credit can help protect you from unpleasant surprises later. In my latest for ABC News, learn 3 time-sensitive money tasks for new widows and widowers.
This week’s top story: White House touts U.S. economy’s strength as election year begins. In other news: 5 signs you should consolidate your credit card debt in 2024, the cost of literally keeping your chin up, and 5 cities where you can book a 5-star hotel for cheap.
White House Touts U.S. Economy’s Strength as Election Year Begins
Jared Bernstein, chair of the Council of Economic Advisers, discusses December’s strong jobs report, wage growth and easing inflation.
5 Signs You Should Consolidate Your Credit Card Debt in 2024
Credit card consolidation combines multiple balances, ideally under a lower interest rate, which can help you get out of debt faster.
Forever Young? The Cost of Literally Keeping Your Chin up
Good skin isn’t always cheap, but there are ways to stretch a self-care budget. Don’t forget the sunscreen.
5 Cities Where You Can Book a 5-Star Hotel for Cheap
Destination cities in Malaysia, Vietnam, Thailand and elsewhere offer surprisingly affordable five-star experiences.
Dear Liz: The beneficiary on the 529 college savings account I manage has no education plans so they cannot use the 529 funds without tax penalty. They also do not work, so I cannot roll the money over into a Roth IRA for them because there is no earned income to qualify for the rollover contribution.
However, I understand that 529 beneficiaries can be changed to a qualified relative. If the 529 beneficiary were changed to a relative, could funds be rolled over to the new beneficiary’s Roth account? Does the 15-year clock reset on the 529 account when changed to a different beneficiary, effectively delaying such a rollover?
Answer: 2024 is the first year that unused money can be rolled penalty- and tax-free from a 529 college savings account into a Roth IRA for the same beneficiary. The law that created these rollovers specified that money can’t be rolled over until the account has been in existence at least 15 years. The IRS has yet to say if the clock restarts when the beneficiary changes, but many tax experts believe that will be the case.
Dear Liz: I have a dear friend who after 48 years of marriage went through a horrible divorce. She worked for a school district that did not pay into Social Security but her ex was self-employed and did pay into the system. I advised her to apply for spousal benefits but she was told she was not entitled due to her pension. Is this right? Social Security is a federal program. What does it have to do with a state or county pension? I feel she is being cheated out of income she could desperately use.
Answer: It’s unfortunate that your friend is struggling. But she’d be worse off trying to live on a spousal benefit from Social Security than she is now.
People who get pensions from jobs that didn’t pay into Social Security may be subject to two provisions, the windfall elimination provision and the government pension offset. WEP can reduce but not eliminate any Social Security retirement benefit they earned from other jobs that paid into Social Security. Typically, the Social Security benefit at full retirement age won’t be reduced by more than half the pension amount.
GPO, by contrast, reduces a Social Security spousal or survivor benefit by two-thirds of the amount of the pension. That means GPO can entirely eliminate a Social Security benefit based on someone else’s work record. If your friend can’t qualify for a divorced spousal benefit, that means she’s already receiving more from her pension than she would get from Social Security.
Consider helping your friend look for other ways to make ends meet. Benefits Checkup, offered by the National Council on Aging, could help her find programs that could help pay for medical care, groceries, utilities and other necessities.
Dear Liz: I had several checks stolen from the U.S. Postal Service. The thieves altered and cashed the checks. I monitor my bank accounts religiously and discovered the altered checks quickly. I immediately put holds on the checks and for the most part I have been reimbursed. One check, however, was written out to one bank for $4,339 and then cashed through another bank. The first bank told me they were pursuing the second bank for payment, and that when they get reimbursed, I’ll get reimbursed. I’ve been waiting since October 2022! Recently I received a letter from the first bank saying, in effect, that the other bank hasn’t responded so they consider the case closed. Basically, I’m out the money. This is obvious fraud and no one is taking it seriously.
Answer: Check fraud is soaring even as the use of checks has declined. Thieves take signed checks from mailboxes, sometimes using keys stolen from mail carriers, and “wash” them with common solvents such as nail polish remover. Once the checks dry, they change the amounts and payees and then cash the altered checks.
If you report the problem to your bank promptly — typically within 30 to 60 days of your statement date, depending on state law — then you should be made whole.
You can start by making a complaint to the Consumer Financial Protection Bureau online or by calling (855) 411-2372. The CFPB has a pretty good track record of getting companies to respond.
Also, please look into other payment methods. Electronic payments are much more secure as well as faster and easier to trace.
This week’s top story: January mortgage rate forecast. In other news: 4 things that could impact your credit in 2024, the new 2024-25 FAFSA, and how to pay for promising medications like Ozempic.
January Mortgage Rate Forecast: Steady While Waiting for Spring
Mortgage rates might not change much in January, after going through a tumultuous spell toward the end of 2023.
4 Things That Could Impact Your Credit in 2024
Here are four things to look out for that could impact your credit in the new year.
The New 2024-25 FAFSA is Open. Intermittently.
The 2024-25 FAFSA has “soft-launched” after a three-month delay. Submit the simplified form as soon as possible to maximize your financial aid.
How to Pay for Promising Medications Like Ozempic
Ease the cost of prescription medications like Ozempic by understanding your insurance coverage, payment options and budget.