Ask Liz Weston

Get smart with your money

Q&A

Q&A: Investment returns

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Dear Liz: In a recent column you mentioned a fund that shows a return of 7% consistently for several years to present. Would you be so kind as to provide me with the name of the fund?

Answer: I don’t know of any mutual fund that’s shown a consistent 7% return year in and year out. What you may be referring to is research showing overall stock market returns. Taking into account each year’s gains and losses, the average annual return over each 30-year period starting in 1928 — from 1928 to 1958, 1929 to 1959, and so on — is greater than 8%, but you can’t expect 8% every year.

Q&A: Social Security survivor benefits

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Dear Liz: My 90-year-old father recently passed away. My mother, who will be 90 in February, has a phone meeting with Social Security coming up. It is my understanding that she will have the opportunity to take my dad’s full benefit in place of hers since it is much higher. Is that correct? Is there anything else I should know to help her receive the maximum benefits?

Answer: Survivors get only one Social Security check, and it’s the larger of the two they received when their spouses were alive. So yes, she will get the amount your father got. At this point she can’t do much to maximize her Social Security benefit. What she gets depends on when your father started his benefit. The later he started, the more she’ll receive.

Q&A: Health insurance subsidies

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Dear Liz: We’re living on a very tight budget and often have to put groceries and unexpected expenses on a credit card that’s in my husband’s name only. I have no personal income. My husband is on Medicare, but I’m too young to qualify and need to find low- or no-cost healthcare, (I haven’t had any insurance since 2007.) They are using my husband’s total income and coming up with high rates that are supposed to be lowered by tax credit, but we don’t pay income tax because our income is too low. Should they be using what the IRS considers our income to be? Or could I apply using my zero personal income?

Answer: By “they,” you presumably mean a health insurance marketplace where you shopped for policies offered by private insurers. HealthCare.gov is the federal marketplace and many states, including California, offer their own. When you shop for a policy through a marketplace, you can qualify for subsidies that can dramatically lower the cost of your coverage.

This subsidy, also known as a premium tax credit, is based on your household income, not your individual income. The tax credit is refundable, which means you get it whether or not you owe federal income taxes, and you can opt to have the subsidy paid in advance to the health insurer to lower your premiums. You don’t have to wait until you file your taxes to get the money back.

You’ll want to act quickly, though, because the penalty for not having coverage is rising. The penalty for 2016 is the greater of $695 per adult or 2.5% of income. You still have a short window to avoid that hit: The enrollment deadline is Jan. 31.

Q&A: Credit card billing errors

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Dear Liz: I have a dispute with a credit card company over an online transaction that I canceled. The company charged me three times but refunded only one of those charges. The credit card company initially canceled the other two transactions but I was rebilled without my knowledge. Despite my submitting evidence and the card company agreeing that I don’t owe the money, it will not take the charge off. Who do I contact to get this settled? When I call the card company, they say they will look into this and contact me in 10 days, which they never do.

Answer: It’s convenient to dispute credit card billing errors over the phone. If you want to preserve your rights under the federal Fair Credit Billing Act, though, you need to put your complaint in writing.

Your letter should be sent to the address given for billing inquiries, rather than the address where you send your payment, according to the Federal Trade Commission. The letter needs to include your name, address and account number along with a description of the problem. You should send copies of any receipts or other documents that back up your case. The letter should be mailed in time to reach the creditor no later than 60 days after the statement with the error was generated. The letter should be sent by certified mail, return receipt requested.

That’s a cumbersome process, and often not necessary for people who monitor their statements and catch a problem early. Ideally, they first would contact the merchant and give it a chance to correct the problem. If the merchant doesn’t do so within a few days, the customer can contact the credit card company and give it time — say, 30 days — to resolve the situation. If that doesn’t work, then the customer can fire off a letter.

Even if you’re now outside the 60-day window, you should still send a letter and ask for a prompt response. If you don’t get one, you can file a complaint with the Consumer Financial Protection Bureau, which intervenes with credit card companies to resolve such disputes.

Q&A: Social Security windfall elimination provision

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Dear Liz: You’ve written about the windfall elimination provision, which reduces the Social Security checks of people who get a pension from a job that didn’t pay into Social Security. I am affected by this provision, but a Social Security representative told me that as long as I don’t start withdrawals from my government pension account, I am entitled to full Social Security payments. This ends when I turn 701/2 years old and must start taking automatic withdrawals from my pension. This info might help with the planning process.

Answer: Thank you for sharing this tip. The windfall elimination provision was enacted to keep people with government pensions that didn’t pay into Social Security from receiving proportionately more than people who paid into the system their entire working lives. But as you note, it’s possible to delay the provision by putting off the start of pension benefits.

Social Security can be complex, and claiming strategies that might work for one person could shortchange another. That’s why it’s important to educate yourself and seek out advisors who understand how Social Security works.

Q&A: Social Security and marriage

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Dear Liz: My partner is 69 and receives about $800 monthly from Social Security. I am 66 and receive about $1,100 from Social Security. We are not married but have been living as such for the past 10 years. We own our home together. Does it make sense financially for us to marry?

Answer: When one of you dies, the survivor will have to get by on one Social Security check. If you were married, it would be the larger of the two checks you received as a couple. Unmarried survivors keep their own checks and lose their partners’ benefits, even if the partners’ benefits were larger.

One reason not to marry would be if either of you qualified for spousal benefits based on a previous marriage, and those benefits were greater than what you’re receiving now. Many people don’t realize that divorced people can receive spousal benefits based on an ex’s work record, as long as the marriage lasted at least 10 years and the ex is at least 62. Divorced spousal benefits end, however, when the recipient remarries.

Divorced people who were married at least 10 years also may qualify for survivor benefits if their exes have died. Unlike spousal benefits, however, survivor benefits can continue if the recipient remarries after reaching the age of 60.