Ask Liz Weston

Get smart with your money

Q&A

Q&A: Social Security minors’ benefits

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Dear Liz: One thing I rarely see mentioned in discussions of when to take Social Security is the benefit for minors who are still in school. I took my benefit at 62. Social Security called me and told me that my daughter was eligible as well. We collected over $60,000 by the time she graduated high school.

Answer: Child benefits can indeed change the math of Social Security claiming strategies.

To get a child benefit, the parent must be receiving Social Security retirement or disability benefits. The child must be unmarried and benefits stop at age 18, unless she is still in high school — in which case checks stop at graduation or two months after she turns 19, whichever comes first. Child benefits are available for those 18 or older with a disability that began before age 22.

The child can receive up to half the parent’s benefit, although both benefits are subject to the earnings test if the parent started Social Security before his or her full retirement age. The earnings test reduces checks by $1 for every $2 the parent earns over a certain amount, which in 2019 was $17,640. Also, there’s a limit to how much a family can get based on one person’s work record. The family limit is 150% to 180% of the parent’s full benefit amount.

Many free Social Security claiming calculators don’t include child benefits as one of the variables they include, so if your child would be eligible it can make sense to pay $40 for a customized strategy from a more sophisticated calculator, such as the one at Maximize My Social Security.

Q&A: Don’t fall for Social Security phone scams

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Dear Liz: I have just received a phone call advising me that my Social Security number “is about to be suspended” and that for help, I should call a certain number. Is this legitimate?

Answer: No. Your Social Security number can’t be locked or suspended or any of the other dire-sounding consequences these robo-callers threaten. If you did call the number, the scam artist on the other end would try to trick you into revealing personal information or convince you to wire money or buy gift cards, which they can quickly exchange (or “wash”) to erase their trails. People lost $10 million to these Social Security scams last year, according to the Federal Trade Commission.

Q&A: Don’t expect timeshares to increase in value

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Dear Liz: I’m trying to get rid of my timeshare. Do you have any suggestions for me, as a single mom, on making any money from this? Even a few grand would be nice (and yes, I’ve tried both Craigslist and EBay). I paid a whopping $15,000 in 2010, so it’s paid for, but annual maintenance fees have just gone up each year. The fees are now over $1,100, and I fear for the future.

The developer is willing to take back my timeshare and not charge me the $1,000 they usually do. They act like they’re doing me this huge favor but I’m out $15,000! I was told by their sales representative it was real estate property that would increase in value. I’m just so sick to my stomach over this. Should I just give it back and walk away, or do you have anything you can think of for me to try to get even a small amount of money?

Answer: Timeshares should not be purchased, or sold, as an investment. The developer may raise the price of newly sold timeshares, but that doesn’t mean the one you purchased has any value at all on the resale market.

Clearly the sales rep deceived you, but timeshare contracts typically have a clause that absolves the developer from responsibility for anything sales reps say. Timeshare attorney Michael Finn of Largo, Fla., calls that the “license to lie” clause.

Your $15,000 is what economists call a “sunk cost.” You’re not going to get the money back. If you continue to try, you may fall victim to another type of scam, where con artists convince you that they can sell your timeshare — if only you pay them a hefty upfront fee.

You should take the developer up on its offer. Many developers won’t take back timeshares even if you pay them. Your other alternative is to try to sell it for $1 or less on a timeshare owners’ site such as Redweek or Timeshare Users Group, but sometimes owners have to offer to pay one or two years’ worth of maintenance fees just to convince someone else to take the timeshares off their hands.

Q&A: When family balks at paying their fair share

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Dear Liz: I inherited half a duplex from my parents. They were partners with my aunt and uncle. When alive, all parties shared expenses for the common areas. I rent out my half of the duplex while my aunt still lives in the other half. My cousins now control my aunt’s finances (she is 94 and in poor health). They refuse to reimburse me for common-area expenses such as painting the exterior (the paint was peeling, exposing the wood, and hadn’t been painted in more than 10 years) and repairing and updating the electrical panel, which had frayed and exposed wires that posed a fire hazard. The panel is on their half of the duplex but serves both units. These costs were about $15,000. What can I do? It’s not fair that I pay for everything when both owners benefit from the necessary repairs.

Answer: Your best hope may be to change your approach. Did you ask your cousins to help you pay for the repairs before you had them done, or only afterward? If they had no input into what was done or how, it’s understandable that they would balk when presented with half the bill.

Of course, they might have balked anyway, and that’s why owning property with other people can get tricky: They often don’t share your opinions about what needs to be done and how much to spend. Some prefer to defer maintenance and repairs indefinitely rather than shell out money to protect their investment. Others understand how important maintenance and repairs are but might want to do some of the work themselves to save money (although do-it-yourselfers shouldn’t attempt an electrical panel upgrade, obviously.)

So your frustration is understandable, but your options may be limited. If you can’t work something out with your cousins, your alternative may be to sell your half of the duplex, but that could require going to court to force a “partition” of the property. You should talk to an attorney familiar with the property laws in your state so you can get an idea of your options and their cost.

Q&A: Working after retirement

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Dear Liz: My profession was one of the hardest hit by the Great Recession. I retired by default when I turned 62 in 2012. My Social Security payment was reduced because I started it early. I’ve found it necessary to return to the workforce part time to move beyond just surviving and have some discretionary funds. What does my employment mean for future Social Security payments?

Answer: You’re past your “full retirement age” of 66, so you no longer face the earnings test that can reduce your Social Security benefit by $1 for every $2 you earn over a certain limit ($17,640 in 2019).

Sometimes returning to work — or continuing to work after you start receiving Social Security — can increase your benefit if you had some low- or no-wage years in your work history. Social Security uses your 35 highest-earning years to calculate your checks. The amounts are adjusted to reflect changes in average wages, which is somewhat similar to an inflation adjustment. If you should earn more this year than you did in one of those previous years, your current earnings would replace that year’s earnings in the calculation and could increase your check.

Another way to boost your benefit if you’ve reached full retirement age but are not yet 70 is to suspend it. That means going without checks for a while, but your benefit earns delayed retirement credits that can increase the amount by 2/3 of 1% each month, or 8% a year. It may not be practical for you to do this: You probably need the money, and you could be too close to 70 to get much benefit. But perhaps that’s not the case for someone else reading this.

Q&A: Investing books for beginners

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Dear Liz: What are the best books for a beginning adult investor?

Answer: “The Little Book of Common Sense Investing,” by the late John Bogle, is a terrific explanation of why low-cost index funds are the best choice for most people (a sentiment shared by legendary investor Warren Buffett, who also endorsed the book). If you want to venture beyond index funds, or even if you don’t, “Investing for Dummies” by Eric Tyson, “Investing 101” by Kathy Kristof and “Broke Millennial Takes on Investing” by Erin Lowry are other good reads.