Friday’s need-to-know money news

Today’s top story: AmEx makes it easier for immigrants to access credit. Also in the news: Retirement savings mistakes financial advisors see too often, big changes could be in store for student loan borrowers, and why you shouldn’t tell the person you just started dating about how much money you have.

AmEx Makes It Easier for Immigrants to Access Credit
How the new feature works.

7 Retirement Savings Mistakes Financial Advisors See Too Often
How to avoid them.

Big changes could be in store for student loan borrowers
Rewriting the rules.

Don’t Tell the Person You Just Started Dating How Much Money You Have
Keep it to yourself for now.

The 6 biggest retirement mistakes, and 1 defense

One of the biggest retirement mistakes you can make is not realizing what you don’t know.

I regularly hear from people in or near retirement who misunderstand how Social Security works, dramatically underestimate life expectancies or fail to plan for big expenses, such as long-term care or taxes.

These aren’t folks looking for advice. They’ve already made up their minds and want to argue about financial planning precepts, such as when to take Social Security or how much retirement is likely to cost. But what they think they know just isn’t so.

In my latest for the Associated Press, why people don’t get objective financial advice before they retire and how to change course.

Q&A: When is it time to take the money and run to a new investment advisor?

Dear Liz: My wife and I are in our early 30s. She has a stock portfolio that has positions in 20 blue chip stocks purchased primarily in the last 20 years. It was set up by her family and managed by a family friend at a large brokerage. Recently, the family friend retired and transitioned the portfolio to a new team at this brokerage. They basically told us that our portfolio underperformed and only saw an average of 3% growth per year over the last 20 years.

The new brokerage team is recommending we gradually transition our 20 positions into a portfolio of 300 stocks that will mirror an index. They would harvest any tax losses to offset the capital gains tax that would otherwise be due. They will charge a 1% fee, and after several years, we will probably have a portfolio that is entirely small positions in a huge number of companies.

My gut reaction was that if they want to mirror an index, why not just buy an index fund with cash freed up from tax-loss harvesting? My wife really feels most comfortable doing whatever her parents recommend and is overwhelmed by what I call advanced investing but wants us to make this decision together.

Answer: If your wife is being charged a 1% annual fee, she should be getting a heck of a lot more than investment management. One percent is the typical fee charged by comprehensive financial planners who offer a wide array of services including retirement, tax, investment, insurance and estate planning. If her portfolio is more than $1 million, the fee probably would be even lower.

Another, larger problem is that the new team of stockbrokers probably does not have a fiduciary duty to your wife. In other words, they’re allowed to recommend a course of action that is more profitable for them, even if there are better-performing and less-expensive options available. That, more than anything else, should be motivating her to find a new advisor who is willing to be a fiduciary.

You can help in a number of ways, starting with the advisor search. The National Assn. of Personal Financial Advisors, the XY Planning Network and the Garrett Planning Network all represent fee-only planners and can offer referrals.

You also can encourage your wife to educate herself about investing, since (as you know) it’s not rocket science and she needs to know the basics to responsibly handle her money. Relying on her family’s influence has left her with an undiversified, underperforming portfolio — and delivered her into the hands of people who probably don’t have her best interests at heart. It’s time to grow up and take charge.

Finally, you can stop referring to it as “our” portfolio. It’s lovely that she wants to share it with you, but the money is hers and she needs to take ownership.

Wednesday’s need-to-know money news

Today’s top story: Don’t let friends and family pick your financial advisor. Also in the news: A month with the 50/30/20 budget plan, what the confusing terms in your 401(k) plan mean, and a growing number of Americans have more credit card debt than savings.

Don’t Let Friends and Family Pick Your Financial Advisor
Due diligence is essential.

Budget Diary: Navigating Holiday Spending and Debt Payments
A month with the 50/30/20 budget.

What This Confusing Term in Your 401(k) Plan Means
Deciphering the strange terms.

A growing number of Americans have more credit-card debt than savings
And it’s getting worse.

Wednesday’s need-to-know money news

Today’s top story: How to know if paying for money advice is paying off. Also in the news: 5 inconvenient truths about real estate agents, the 10 fastest-growing metro areas, and Millennials are loading up on personal loans.

How to Know If Paying for Money Advice Is Paying Off
Calculating your return on investment.

5 Inconvenient Truths About Real Estate Agents
What to know before hiring one.

Home Affordability Watch: The 10 Fastest-Growing Metro Areas
The 10 fastest-growing metro areas, ranked from most to least affordable.

Not just student loans: Millennials are also loading up on this kind of debt
Personal loans are a favorite of this generation.

Thursday’s need-to-know money news

Today’s top story: How not to inherit Mom’s timeshare. Also in the news: Why bundling insurance doesn’t automatically mean savings, why your financial advisor has a financial advisor, and 12 documents to prepare now for your heirs.

How Not to Inherit Mom’s Timeshare
Limiting liability.

Will You Save Money Bundling Insurance? Not Always
When bundling isn’t saving.

Why Your Financial Advisor Has a Financial Advisor
Even experts need experts.

12 Documents to Prepare Now for Your Heirs
Making a difficult time easier.

Monday’s need-to-know money news

Today’s top story: Why your financial advisor has a financial advisor. Also in the news: Is a rent-to-own home right for you, what really matters with your first credit card, and why FICO credit scores are now at their highest levels ever.

Why Your Financial Advisor Has a Financial Advisor
Taking off the blinders.

Is a Rent-to-Own Home Right for You?
The pros and cons.

What Really Matters With Your First Credit Card
Knowing the basics.

FICO credit scores are now at their highest levels ever … here’s why
The average score is now 704.

Tuesday’s need-to-know money news

Today’s top story: Why your parents’ money guru may not be right for you. Also in the news: Home loans with 3% down for 2018, what hotel credit card upgrades mean for your bottom line, and how the student loan grace period works.

Your Parents’ Money Guru May Not Be Right for You
Striking out on your own.

HomeReady and Home Possible: Loans With 3% Down for 2018
What you need to know.

What Hotel Credit Card Upgrades Mean for Your Bottom Line
Sweet new perks.

How the Student Loan Grace Period Works
Interest will still accrue.

Thursday’s need-to-know money news

Today’s top story: Summer is the perfect time for a financial checkup. Also in the news: Why your parents’ money guru may not be right for you, how to get ready for the next recession now, and what you don’t know – but should know – about how your financial advisor is paid.

Summer Is the Perfect Time for a Financial Checkup
A great time to get back on track.

Your Parents’ Money Guru May Not Be Right for You
Your goals may be different.

How to Get Ready for the Next Recession Now
Preparing for the worst.

What you don’t know – but should – about how your financial advisor is paid
Beware of conflicts of interest.

Monday’s need-to-know money news

Today’s top story: Don’t let your love of logos become a financial faux pas. Also in the news: No-sweat solutions to save money on car fixes, what it’s like to use a financial advisor, and overlooking a risk in your home could cost you nearly $10,000.

Don’t Let Your Love of Logos Become a Financial Faux Pas
A pricey new trend.

5 No-Sweat Solutions to Save Money on Car Fixes
Break out the toolbox.

What’s It Like to Use a Financial Advisor?
Help for planning your financial future.

Overlooking this risk in your home could cost you nearly $10,000
Don’r drown in bills.