March 30, 2016

9 Social Security Myths Worth Busting

There are plenty of misconceptions about Social Security benefits and when to claim them. I will summarize the list but you can read the details by clicking the link at the end of this post. 

1. You should claim early, before your full retirement age, in order to “get back what you put in.” 

2. It’s best to take it early, since you don’t know how long you will live.

3. By taking benefits early, you will be able to pay less in taxes.

4. With political gridlock and other problems in Washington, you can’t expect Social Security to stay solvent forever, so you should take benefits as soon as you can.

5. You understand the Social Security breakeven point, and it still seems best to take Social Security before age 70.

6. You don’t need to maximize monthly Social Security benefits because you’ll be spending less in retirement.

7. Getting Social Security means you don’t have to worry about spending a lot of money on health care since you’ll be getting Medicare, too.

8. You don’t need to worry about Social Security, because your kids or other family members can always help support you and even let you live with them, if needed.

9. You can never get the right information on Social Security benefits.

National "my Social Security" Week | April 4 - 13, 2016

It's time to open a secure online my Social Security account at to:
  • Keep track of your earnings and verify them every year;
  • Get an estimate of your future benefits, if you are still working;
  • Get a letter with proof of your benefits, if you currently receive them; and
  • Manage your benefits:
    • Change your address;
    • Start or change your direct deposit;
    • Request a replacement Medicare card; and
    • Get a replacement SSA-1099 or SSA-1042S for tax season. 
    Find out what the presidential candidates propose to deal with the eventual depletion (estimated for 2034) of the Social Security Trust Fund which was built up to address the pressure of the baby boom generation. Once that happens, payroll taxes will be its sole source of funding. Researchers estimate that the taxes would cover between 75% and 79% of benefits.
    Voters concerned about the stability of Social Security should elect those to office who share their view. 
  • To learn more about the options for ensuring the long term viability of Social Security read
    The Social Security Fix-It Book developed by the Center for Retirement Research at Boston College. It's available free at:

March 29, 2016

Beware Private Student Loans

One of my favorite resources, The Squared Away Blog, recently posted a warning about private student loans. "It is much more difficult to negotiate affordable repayment plans with private lenders. Private loans are unlike federal student loans, which have standardized repayment options and procedures." The Q&A with student loan experts emphasized the importance of using federal loans before resorting to private lenders. (Other experts have suggested that students limit themselves to borrowing only as much as the federal government will allow: for dependent students the amounts are $5,500 for first year, $6,500 for second year, and $7,500 for subsequent undergraduate years. If one graduated in four years the total limit would be $27,000.  Many would argue that with the high cost of higher ed, many students would need to borrow more. But $27,000 is close to the average debt for recent graduates. Do you really want to incur more debt? Maybe it's time to consider other options such as community college, finding a high paying summer job, working while in school (no more than 12 hours/week according to the experts), and forgoing the costly private college. Before you decide that private loans are the answer, please read Private Student Loans: Borrower Beware at

A college grad's perspective on paying down student loan debt

Check out how one recent college graduate manages her student loan debts in a way that offers a fresh perspective on the advantages of learning to manage money though debt repayment. One great resource that she doesn't mention in her article is PowerPay Debt Reduction program available free at "PowerPay will give you the tools to develop a personalized, self-directed debt elimination plan. Discover how quickly you can become debt free, and how much you can save in interest costs by following your debt reduction plan. Utah State University Extension is pleased to provide this debt management tool without any cost to consumers worldwide."

March 28, 2016

Mobile payments: When a wallet is no better than a ziploc

"Many startups aren’t properly securing their users’ data," according to Ilga Kharif writing for Bloomberg Business Week. Are you a PayPal, Dwolla, or Venmo user? Then you need to read this article.  If you are using your smart phone to make payments (with any of a variety of apps) you are setting yourself up for identity theft. As more people around the world use mobile payment apps the hackers and thieves are having a hay day taking advantage of the security gaps to steal money and identities from users. 
"Mobile app security provider Bluebox found vulnerabilities in all the roughly 10 unnamed U.S. mobile payment apps it examined last year. 'Most of the time, the apps themselves aren’t using any kind of encryption to protect the data on the phone or to protect the data in transit,' says Andrew Blaich, Bluebox’s lead security analyst."
Think twice before you pay with your smart phone. The few seconds it takes to pay with cash, check, debit or credit card can save months of agonizing frustration if you become a victim of ID theft.  Read the details at:

Financial Wellnes is about more than Wealth

Financial wellness is about not only security but also "the ways that wealth and income affect our emotional and physical well-being," certified financial planner Rick Kahler writes. "The journey to financial wellness is far different than the path to becoming rich. Achieving financial wellness cannot be done in a vacuum; it requires developing a degree of emotional and physical wellness as well. Searching for one inherently will expand to a search for all three."
A quick summary: 
1. Remember, it’s your journey.
2. Don’t attempt to guilt, shame or manipulate anyone else to come along with you on the journey.
3. Be prepared for the naysayers.
4. Lower your expectations of how quickly your attitudes and behaviors around money and finances will change.
5. In the early stages of your journey, resist the urge to substitute getting more practical and logical information about money and finances instead of looking at the emotions and feelings you have around money.
6. Find one or more trusted guides to help you along the journey.
7. Open yourself to new awareness and knowledge.  
8. Be gentle with yourself when you get off the main path and need to retrace your steps.
Read Rick Kahler's full article at:

March 21, 2016

With compound interest your money multiplies like...

baby bunnies rabbits

Sophia Berry explains compound interest:

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