Trump's Education Secretary Tries Again to Cut Debt Relief for Students Who Were Misled

"Thousands of students who took out federal loans to attend schools that lured them with fraudulent claims will still have to repay a portion of their debts, the Education Department said Tuesday — a new attempt to water down a loan-forgiveness program that the department’s leader has long deplored."

Stacey Cowley, writing for The New York Times explains: 
"The change creates a complicated sliding scale on which defrauded students’ relief is calculated using group earnings data. Debts will be fully forgiven only if students in a particular program earned far less than those from similar programs at other schools." 


Education Secretary Betsy "DeVos sought in 2017 to reduce the relief offered through the rule known as “borrower defense to repayment,” which allows the former students of schools that broke laws to seek forgiveness of their federal student loans. A federal court blocked that effort, saying the department’s method for determining how much relief to grant applicants illegally misused individual income data obtained from another federal agency."

"Ms. DeVos’s actions are 'a slap in the face of students across the country,' a group of students who attended now-closed for-profit schools said in a letter sent to the secretary on Tuesday."

Check Out the New W-4 Tax Withholding Form

If you are starting a new job, work multiple jobs, are self-employed, or if you want to adjust the amount of income tax withheld from your paycheck, the IRS offers a new version of Form W-4, which instructs employers how much tax to withhold.

"The redesign reflects changes to the federal tax code from the Tax Cuts and Jobs Act, which took effect last year." according to Ann Carrns, writing for The New York Times.

"Accurate paycheck withholding is important because if too little money is deducted, you may face an unwelcome bill — and possibly a penalty — at tax time. Ideally, tax experts say, the amount withheld should roughly match the amount of tax owed."

"If too much money is deducted, you may get a fat tax refund. Some people prefer large refunds as a sort of forced savings, but a big refund means you gave the government a no-interest loan."
"the form allows workers to use the I.R.S.’s online tax withholding estimator tool or to complete a printed work sheet to determine how much to withhold"

Required Minimum Distributions (RMDs) from retirement accounts

• After you turn 70½, you must prepare for required minimum distributions from your individual retirement accounts and 401(k) plans.
• If you don’t take your so-called RMD in time, you’ll face a penalty of 50% of what you were supposed to withdraw.
• Got an RMD for 2019? You have less than four weeks to get it together.

"Individuals who turned 70½ this year — and those who are older — are responsible for taking required minimum distributions from their individual retirement accounts and from each of their 401(k) plans."
"Generally, you have until Dec. 31 to take your so-called RMD."
"People who just turned 70½ in 2019 may wait until April 1, 2020 to take their first distribution. However, they will still need to take a 2020 distribution by the end of that year."

Details from Darla Mercado at CNBC at: https://www.cnbc.com/2019/12/10/if-you-miss-this-year-end-retirement-deadline-youll-face-a-50percent-tax.html

Retirement plan limits for 2019-2020

 401(k) contributions
The annual contribution limit for employees who participate in 401(k), 403(b), most 457 plans and the Thrift Savings Plan used by federal government employees increased in 2019 to $19,000 (and those limits will be going up another $500 in 2020). If you’re 50 or older, you also can take advantage of a catch-up provision of $6,000 (a figure that is also rising by $500 in 2020). That means all together you could put away $25,000 in your employer-sponsored plan in 2019 — and that total rises to $26,000 in 2020. And in case you were wondering, your employer’s matching contribution, if there is one, doesn’t count toward your limit

IRAs
The contribution limits for traditional and Roth IRAs went up in 2019 — to $6,000, or $7,000 for those who are 50 and older. So if you’re a 50-plus individual focused on growing your savings account, you could put away as much as $32,000 between your 401(k) and your Roth in 2019.

Contribution limits for Roth IRAs and traditional IRAs will remain the same in 2020.

Thanks to:  Dina Siracusa, Investment Adviser Representative | Provident Wealth Advisors
Source: https://www.kiplinger.com/article/retirement/T047-C032-S014-401-k-and-ira-advice-especially-for-women.html

Understanding Medicare and Social Security

A great resource for understanding the basics of Social Security and Medicare

Writing for USNWR, Rachel Hartman explains:

How Social Security and Medicare Work Together

 "Social Security and Medicare are social safety programs that Americans pay into during their working years through taxes. Both are designed to assist older Americans and distribute benefits to the disabled and their families. Social Security provides financial support, and Medicare is a health insurance program that helps cover doctor visits, hospital stays and other medical treatments.

While the programs are separate, Social Security and Medicare are intertwined in several ways. Here, we look at the connections between the two programs as well as what to expect when applying for benefits."

Get the details at: 

https://money.usnews.com/money/retirement/social-security/articles/how-social-security-and-medicare-work-together

How did you pick the funds in your retirement account? ABC...

A paper published in the Financial Review concluded that when selecting funds within their 401(k) plans, many people choose the options at or near the top of alphabetical lists. "It's absolutely amazing how powerful this effect is and how much it is really distorting what's being invested in," said paper co-author Jesse Itzkowitz. As reported in The Wall Street Journal.

Review your mutual fund choices and rebalance your portfolio before the end of the year! 

Managing Sequence of Returns Risk in Retirement & avoid scams with income annuities

What IS "sequence of returns risk"?
Sequence risk, or sequence of returns risk, is the risk that the stock market crashes early in your retirement. Long-term average returns matter less than when those returns occur. If your portfolio drops dramatically in value early in retirement you end up selling low without the ability to gain by buying low. You also have to sell more of your stocks to generate the same amount of income, which means you’re selling off your nest egg shares at a faster rate. It's very difficult to recover from a major investment crash early in retirement. As persons who retired in 2008.
https://www.moneycrashers.com/sequence-returns-risk-investments-retirement/

Sequence-of-returns risk can have a severe impact on an otherwise sound portfolio, writes Phil Caminiti of New York Life Insurance. He suggests retirement savers look into using income annuities as they can provide guaranteed lifetime income regardless of market fluctuations and reduce the amount retirees may need to withdraw early on to cover expenses.
"Income annuities are a useful hedge against sequence-of-returns risk for two reasons: 1) They provide a guaranteed source of lifetime income that is not correlated to market ups and downs or interest rate fluctuations, and 2) annuity income lowers the withdrawals that retirees might need to cover expenses. This is particularly good news when the market performs poorly in the early years of retirement by helping retirees avoid selling at the bottom."
https://www.investmentnews.com/article/20191206/BLOG09/191209955/timing-matters-when-it-comes-to-managing-sequence-of-returns-risk

Another major advantage of an income annuity is that scammers can't get access to your nest egg. There have been too many examples of super-sophisticated scams targeting older persons resulting in them losing their entire nest egg. The Wall Street Journal recently reported on scammers who very convincingly impersonate IRS and FBI officials threatening the targeted person with jail and high fines if they don't cooperate and transfer their investments to accounts where the FBI can supposedly protect their money. These super sophisticated scams have exploded in the past year.

Don't get sucked in to one of these scams and don't let your parents or grandparents become victims.

Social Security changes for 2020

• Benefits are increasing 2.8% (but Medicare premiums are going up, too).
• Maximum monthly benefit at full retirement age will increase by $150 a month to $3,011.
• The full retirement age will increase by two months to 66 years and eight months for persons born in 1958. Anyone born in 1960 and later has a full retirement age of 67.
• Disability benefits increased.
• Filers who reach full retirement age in 2020 are allowed to earn $48,600 ($4,050 a month) before any withholding, an increase of $140 a month from 2019. 

Source: http://advisornews.com/innarticle/changes-to-social-security-you-need-to-know-for-2020#.XeHuRdV7mCg

Coping with Student Loan Debt

Yes, You Can Buy a Home, Start a Family AND Pay Off Your Student Loans

• From loan forgiveness, to  
• expedited payments and 
• income-adjusted payments, there are strategies available to get a grip on overwhelming student debt.

Randi Lupi explains the options at: https://www.kiplinger.com/article/college/T042-C032-S014-yes-you-can-buy-a-home-and-pay-off-student-loans.html

Retirement Caregiver Crisis

A labor shortage in the caregiving market could have widespread implications for families. Nursing homes in Maine, the state with the oldest average age, are having to close down due to not being able to hire enough staff. Other nursing homes throughout the U.S. struggle with keeping qualified staff. This situation does not portend well for the massive baby boom generation that is reaching the period when they need assistance with daily living activities. Other nursing homes have lost accreditation due to resident abuse or neglect.
No one likes to think that they will need care in cold age but plenty of us boomers have had experience with dealing with aging parents and know the facts are we will likely need support. But who will be there to provide it?
 
This shortage could be readily alleviated if we were more friendly to immigrants who would love to have steady employment in the U.S.

Source: https://www.wealthmanagement.com/retirement-planning/retirement-caregiver-crisis

Homeowner's Insurance Resource

Time to review your current HO policy, especially if you've made renovations to your home or condo. If you have children going to college away from home, their possessions are usually covered by standard HO policies.


Reminders:

• Make sure your home valuation report is up to date
• Consider full-replacement cost coverage if you live in a high-risk area
• Find out exactly what your policy covers before purchasing it
• Consider add-on coverages for flood & earthquake-prone areas

There are some new "kids on the block." Have you ever heard of Lemondade, Hippo Home, Young Alfred? Learn about these options at:
https://www.consumersadvocate.org/home-insurance

Preventing Dementia

What Science Tells Us About Preventing Dementia 

"There are no instant, miracle cures. But recent studies suggest we have more control over our cognitive health than we might think."

by Anne Tergesen in the 11/17/19 Wall Street Journal. 

1. Control high blood pressure

2. Exercise

3. Cognitive training

4. Diet: eating "a Mediterranean diet, which is high in fish, fruits, nuts and vegetables, have lower rates of dementia."
"But a variation on that diet may offer even more protection against the development of Alzheimer’s disease." The Mind Diet:

Eat more: leafy green and other vegetables, nuts, berries, beans, whole grains, fish, poultry, olive oil and wine (in moderation). 

Eat less: red meat, butter, cheese, sweets and fried and fast foods. 

Research study showed:
"there were about 50% fewer Alzheimer’s diagnoses among participants who most closely followed either the Mind diet or the Mediterranean diet, compared with those who followed either diet only a little."

5. Sleep

6. Combination: the more positive factors you incorporate, the better equipped to avoid dementia.

Seven Days to a Better Retirement

The 7 days to retirement challenge is brought to you by The New York Times! Writer Ann Carrns explains the process and why you need to start now. https://www.nytimes.com/2019/11/06/business/not-yet-ready-for-retirement-give-us-one-week.html?te=1&nl=your-money&emc=edit_my_20191111?campaign_id=12&instance_id=13780&segment_id=18703&user_id=bde4c6c63beab087f13b761e1ee9fe1e&regi_id=83720664

"In the shuffle of immediate priorities, don't push off planning for what could be the best chapter of your life. Get a week’s worth of simple steps you can take to help plan for and secure a stable and successful retirement."  Get started here:

Seven Days to a Better Retirement:  https://www.nytimes.com/programs/better-retirement-planning?module=inline

Day 1: What is my retirement?
Day 2: Your financial starting point
Day 3: Set your goal
Day 4: Start saving (a little) more
Day 5: Consider health costs
Day 6: Protect your wishes
Day 7: Consider a financial planner

Mounting car debt traps more drivers

Look at all those huge shiny new pick up trucks and SUVs on the roads these days! Are Americans really that affluent? Not really.

How could it make sense to buy a $27,000 vehicle with a $45,000 loan? No I did not mix up the numbers as reported by AnnaMaria Andriotis & Ben Eisen on the front page of the November 11 Wall Street Journal. "Consumers, salespeople and lenders are treating cars a lot like houses during the latest financial crisis: by piling on debt to such a degree that it often exceeds a car's value"

Forget about envying your neighbors driving expensive new vehicles; it may be all debt and more! One-third of new vehicle buyers who traded in a car during first 9 months of 2019 had negative equity. On average these borrowers owed about $5,000 on their trade-in before taking on new debt.

"Easy lending standards are perpetuating the cycle, with lenders routinely making car loans with low or no down payments that can lst seven years or longer." Don't get sucked in! 

Did no one learn any lessons from the Great Recession? 

2020: Increased limits for employee contributions to retirement plans

The IRS limit on annual employee contributions to 401(k)s, 403(b)s, most 457 plans and the federal government's Thrift Savings Plan will rise to $19,500 next year, up from $19,000 in 2019 .

The limit for IRAs remains $6,000 or $7,000 for ages 50 +.

4 Steps to choosing a health plan for the coming year

Get guidance for this important decision from the Humble Dollar, courtesy of Richard Conner.

4-step process:
1. Calculate the total annual premium
2. To the results from step No. 1, add the deductible for each plan. 
3. Subtract the deductible from the out of pocket (OOP) maximum.
4. Add the premium amount from step No. 1 to the OOP maximum.

An example will help. Get the full details and example at:  https://humbledollar.com/2019/10/decision-2020/

Best Credit Cards for 2019

"Credit cards are a useful financial tool if used responsibly. With a credit card, you can charge items and services that you need and then pay them off at a later date. If chosen wisely, a credit card can even be used to earn rewards or to build credit."

Writing for Consumer Affairs, Beverly Harzog provides an excellent, easy to use guide to choosing a credit card and evaluating the ones you hold. Data current as of 3/29/19.

Looking for best "balance transfer" card? airline miles? cash back? hotel, business or travel cards?
Check out:
https://www.consumeraffairs.com/credit_cards/credit_cards.htm#

What will Medicare cost me in retirement?

"Health care inflation has been running about double the rate of general inflation." 

"The standard monthly premium for Part B (outpatient services) this year is $135.50; Medicare’s trustees forecast annual increases averaging 5.9 percent through 2028. Enrollees in traditional Medicare can expect inflation of 6 percent if inflation for Medigap premiums is included."

"According to HealthView, a 65-year-old couple using original Medicare this year will spend around $10,300 on premiums for prescription drugs and Medigap, and various out-of-pocket costs. In 20 years, their costs are projected to be around $33,000 annually (future dollars)."

"High-income Medicare enrollees have been paying surcharges on Part B and Part D premiums since 2007. These so-called Income-Related Monthly Adjustment Amounts (IRMAA) affect a relatively small share of the Medicare population — about 7 percent this year, according to federal data — but they are steep."

Source: "Medicare Can Be Confusing: 6 of Your Top Questions," Answered by Mark Miller for The New York Times, 11/1/19.

Note: My husband and I pay $4,020/year this year in Medicare and Advantage premiums for both of us. Eye and dental exams are free in our Medicare Advantage plan. We pay $50 to visit specialists ($30 in 2020) and a few dollars for prescriptions so I estimate about $4,200/year. 

The US Centers for Medicare & Medicaid Services says premiums will rise about 6.7% next year (2020) for most people who participate in Medicare Part B. The increase "is largely due to rising spending on physician-administered drugs," the agency says. 
This increase is way above the CPI rate of inflation!

Tips for College Graduates Making Their First Loan Payments

Your Money adviser (The New York Times)

Tips for College Graduates Making Their First Loan Payment.

By Ann Carrns, Nov. 1, 2019

Make sure you know how much you owe and to whom. Then, look at your payment options.

"Student borrowers typically get a six-month grace period after graduating from college. For students who earned their diplomas in the spring, that means monthly loan payments start in November or December."

"The loan servicer — the company that collects payments and otherwise manages student loans — usually sends a notice a month or so ahead of the first due date."

 

"Go online and check your borrowing history at the National Student Loan Data System. There, you will find a list of your federal student loans and the amounts as well as their servicers, so you can contact them to make sure you are receiving necessary information. (Loans made by private banks and lenders, rather than the federal government, are not included.)"

"Unless you choose an alternative, you will automatically be placed in a standard 10-year loan repayment plan. That’s usually the cheapest option in the long run, and the one that will get you out of debt the quickest." 
Set it and forget it

By Bijan Stephen Nov 1, 2019
"Digit — the automatic savings app that deducts small amounts from your checking account and deposits them into an account you designate — has decided to get further into the debt game. Now, you can use the app to pay off your student loans."

"Digit can help you pay down at least some of that debt painlessly in the same way that the app does everything else. All you have to do is link your student loan account to Digit, set a loan goal, and then quite literally forget about it." 

Well... may be your shouldn't forget about it but it is a strategy to consider. 

Colleges mislead high school student into applying

Numerous reports are coming out with reports that many colleges and universities are recruiting applicants who have no chance of being accepted to their institution. The goal of the colleges is to reduce their acceptance rate, making them appear to be more selective. This process hurts students who may pay substantial application fees to institutions where they have no change of acceptance, bruising their confidence and steering them away from realistic college choices.

So beware of enticements to apply to institutions where your SAT/ACT scores and grades indicate you are unlikely to be accepted.

Source:

For Sale: SAT-Takers’ Names. Colleges Buy Student Data and Boost Exclusivity

By Douglas Belkin (11/5/19)

For 47 cents, the College Board will sell an individual’s information, feeding admissions frenzy

How much do you need to retire?

The “Rule of 25” says you should multiply your total annual expenses by 25 to determine how much you’ll need to have saved by the time you retire. So if you plan to spend $50,000 per year in retirement, you’ll need to save $1.25 million. To have $100,000 per year to spend, you’ll need $2.5 million.
The Rule of 25 is a good starting point, but it is not an ironclad, one-size-fits-all solution for everyone. Among the uncertainties are health care and long-term care costs and inflation.
There are numerous other posts on this blog to provide guidance on how much to save.
For those who gasp and shake their heads at million dollar goals, a book that provides a contrary perspective is “Get a Life: You don’t need a million to retire well” by Ralph Warner.

Get money smart. 25 tips to improve your financial well-being from CFPB

This is just a summary of a great website from the Consumer Financial Protection Bureau; it's almost like a complete personal finance course in one place. Click here: https://www.consumerfinance.gov/about-us/blog/get-money-smart-25-tips-improve-your-financial-well-being/?utm_source=newsletter&utm_medium=email&utm_campaign=General&utm_content=October2019

Understand where your money goes 

         1. Take our quiz to see how healthy your finances are. https://www.consumerfinance.gov/consumer-tools/financial-well-being/ 

         2. Learn where your money is coming from. 

         3. Learn where your money is going. 

         4. Write your bill due dates on a calendar. 

Small changes can make a big difference 

         5. Create a working budget that matches your cash flow. 

        6. Request due dates for your bills that help you stay on track. 

        7. Compare your spending month-to-month. 

Save for emergencies

8. Give yourself financial security with an emergency savings fund.

9. Set rules for your emergency savings–but don’t be afraid to use it.

10. Make saving easy by making it automatic.

11. Put extra money into savings at times when you have it.

12. Use your tax refund to help you reach financial goals.

Reduce your debt

13. Before making a plan to pay down your debts, know what you owe.

14. Choose a debt reduction strategy that works best for you. 

15. Learn about federal and private student loans repayment options. 

16. In the market for a car? Negotiating can save you hundreds or thousands of dollars over the life of your loan. 

Create better money habits 

17. Apply only for credit you need.

18. Set an annual reminder to check your credit reports. 

19. Set up alerts to stay on top of your checking account balance.

20. If you can’t make a bill payment, act fast and call your creditors.

21. When shopping for a loan, get quotes from at least three lenders. 

Plan for success 

22. When planning for the future, set SMART financial goals.

23. Set up a 529 savings plan for your children.

24. Make your savings consistent.

25. Prepare for life events and large purchases by planning ahead.

Think you can time the market?

October is notable for the many stock market crashes that occurred in this month. It's the 90th anniversary of legendary Crash of 1929. The Panic of 1907 and the October 1987 crash are other examples. But the month is not the point. Too many investors think they will cash out then jump back into the market after it recovers. Such a strategy guarantees selling at the bottom and buying near the top... not a way to get rich. Just as market crashes are sudden, unexpected and dramatic, so, often are markets recoveries. No one sounds a horn when the stock market bottoms out to announce the beginning of a recovery. "Trying to sit out a crash often means missing some of the market's best days" which come in fits and starts, no on a smooth trajectory. Numerous studies have revealed the penalties of sitting on the sidelines and trying to decide the best time to buy. Putnam Investments figured that "missing just the U.S. markets' 10 best days in the 15 years through 2018 would have cut your ending portfolio in half. Missing the 20 best days would leave you with two-thirds less" reports Spencer Jakab in The Wall Street Journal, 10/26-27/2019. Money you will need in the coming 5 years should not be invested in stocks. It was sad to hear about retirees bailing out of stocks in 2008 to early 2009, thus locking in huge losses. The longest bull market started on March 9, 2009 but those who panicked lost out by sitting on the sidelines after the trauma of inflicting large losses on their portfolio.

How to "pump up" retirement savings with a very late start

In his column "Ask Encore" Wall Street Journal columnist Glenn Ruffenach answers a reader's questions with the following advice: 1. Keep working 2. Slash debt 3. Get ruthless with expenses 4. Downsize Lots more advice on this topic in this blog.

Wall Street Brokers missed the memo on Index Funds

"In recent years, investors have been flocking to low-cost index funds, driven by their long-term record of outperforming higher cost actively managed funds" writes Randall Smith in The Wall Street Journal (10/7/19). However, clients of Wall Street brokers have just 29% of assets in passive index funds according to a report by Cerulli Associates. The situation is even worse for clients of regional and independent firms with only 20-22% of assets invested in index funds. Who is getting rich? Certainly not the client who is paying high fees for funds that under perform their indexes. The benefits of index investing has been a major theme of this blog. Check out other posts that may convince you that your charming, persuasive broker may not have your best interests in mind.

Amazon sells clothes from factories other stores shun

"After a 2103 factory collapse killed more than 1,100 people in Bangladesh, most of the biggest U.S. apparel retailers joined safety-monitoring groups that required tham to stop selling clothing from factories that violated certain safety standards" according to Wall Street Journal writers J. Scheck, J. Emont, and A. Berzon (front page WSJ 10/24/19). Except Amazon which sells clothing from dozens of Bangladesh factories that violate basic safety for employees.
So please... think twice before buying clothing on Amazon.

Flying is bad for the planet: What can you do besides fly less?

Flying is one of the worst contributors to climate change. Yet Americans are flying more than ever. Granted that some flights are deemed necessary by the passenger... We recently flew from Salt Lake to Baltimore to attend my father in law's funeral which attracted family members who flew from Chicago, St. Louis, Savannah and SLC.

Greta Thunberg is a 16 year old internationally known Swedish climate activist who recently sailed to the U.S. for a climate conference rather than fly. Check out her TED Talk: https://www.ted.com/speakers/greta_thunberg
https://www.theguardian.com/environment/2019/jul/29/greta-thunberg-to-sail-across-atlantic-for-un-climate-summits

For a small fee you can buy carbon offsets to mitigate the impact of the climate change causing emissions. If you fly Delta or United go directly to the links below. Not sure why American Airlines has no carbon offset program. Time to boycott AA? If you are flying a different airline you can still get info the approximate impact and cost at Delta or United. The money does NOT go to the airlines but to organizations such as The Nature Conservancy that typically use the funds to plant trees or other activities to fight climate change.

https://www.delta.com/en_US/about-delta/corporate-responsibility/carbon-emissions-calculator

https://www.united.com/ual/en/us/fly/company/global-citizenship/environment/carbon-offset-program.html

Another website where you can buy offsets with Euros or Paypal: https://flygrn.com/offset-carbon

Flying is really bad for the environment and climate

" The Swedes call it “flygskam,” or “flying shame,” the movement that encourages people to stop taking flights to lower their carbon footprints.

But should most Americans really be ashamed of getting on a plane to see grandma this holiday season?

The short answer: Probably not. If your flights are purely a luxury, though, that’s another matter.

A small group of frequent fliers, 12 percent of Americans who make more than six round trips by air a year, are responsible for two-thirds of all air travel and, by extension, two-thirds of aviation emissions, according to a new analysis by the International Council on Clean Transportation, a nonprofit research group.

Each of these travelers, on average, emits more than 3 tons of carbon dioxide per year, a substantial amount, particularly by global standards. And the most frequent fliers, those who take more than 9 round trips per year, emit the highest share." by By Hiroko Tabuchi and Nadja Popovich writing for the New York Times Climate Forward newsletter.

The countries with the highest CO2 emissions from passenger flights in 2018:
U.S: Americans are responsible for 24% of all air travel and thus, 1/4 of all emissions from flying
China is #2 with 13% of all air travel emissions.
Japan is #3 with 3.1%
WOW! Americans are really the most polluting.

"So what’s to be done to curb frequent flying? One idea, floated by a group in Britain called A Free Ride, would tax fliers progressively: Everyone gets one tax-free return flight each year, and a tax kicks in at a low rate from the second flight. Taxes then ratchet up for each additional flight in that year."

And just this month, a Britain-based commission recommended banning air miles and frequent flier programs so that airlines do not “incentivize excessive flying.” The report cites data showing frequent fliers “strongly tend to be wealthier and less price-sensitive,” and recommends they should “incur increasingly powerful taxation to discourage additional flights.”
"Business travel makes up roughly 30 percent of air travel in the United States, according to data from Airlines for America, a trade group representing airlines. But some corporations are starting to question whether all of that travel is really necessary in an age of email, Slack and teleconferencing. In Europe, companies are starting to give extra time off to employees who opt to travel by train or other less-polluting transportation options on vacation."

If you must fly, then buy carbon offsets.
"Consider a trip from New York to Los Angeles. Flying 2,500 miles in economy class will burn about 0.29 metric tons of carbon per passenger, according to the International Civil Aviation Organization’s carbon emissions calculator. And it will cost about $3.26 to offset the approximately six hour, one-way flight using the travel offset calculator by Cool Effect, a nonprofit organization. If you round up to a full ton of carbon, you’d still only spend $3.30 to $13.18 on the Cool Effect website, depending on the project." By Jillian Mock and Hiroko Tabuchi writing for The New York Times Climate Forward Newsletter

Buy offsets (in Euros) at https://flygrn.com/offset-carbon

https://www.delta.com/en_US/about-delta/corporate-responsibility/carbon-emissions-calculator

https://www.united.com/ual/en/us/fly/company/global-citizenship/environment/carbon-offset-program.html

If you airline doesn't offer carbon offsets go to the Delta or United websites to estimate the cost and contribute on their website.

Why waste money on bottled water?

Almost all Americans have access to clean water. According to Consumer Reports, More than 90% of Americans on municipal systems have pure water. Yet we spend more than $30 BILLION per year on water that is no cleaner than our tap water. In fact, numerous bottled water companies (Aquafina and Dasani)draw their water from municipal supplies! Just think was $30 billion dollars could buy!

As I often pick up trash along sidewalks, hiking trails and bike paths, the most common litter is plastic water bottles. While supposedly recyclable, the market for plastic recycling has almost evaporated since China decided to stop importing our waste.

All the microplastics going into our bodies and the environment is another reason to use a refillable water bottle.

Check out the November 2019 issue of Consumer Reports with its special report: "Is bottled water safe?"

How to Create a Personal Retirement Plan

Rachel Hartman explains that
Finding the right retirement plan involves:

    Thinking about your values and goals.
    Identifying your risk tolerance.
    Considering your age.
    Projecting your retirement lifestyle.
    Adjusting your plan as needed.


https://money.usnews.com/money/retirement/baby-boomers/articles/how-to-create-a-personal-retirement-plan

9 Myths About Credit Scores

"People think they know what causes a credit score to rise or fall. They’re often wrong."
Writing for The Wall Street Journal, Demetria Gallegos, explains how credit scores work.
Why are credit scores important?
"A higher score can mean better terms on credit cards, lower rates on mortgages and less expensive premiums on auto and homeowners insurance. It can make it more likely to win approval for an apartment, and get deposits waived when setting up services like electricity and cable in a new home. It can even mean a better chance at nabbing a job offer."

MYTH: Checking my credit score hurts my credit score

MYTH: If I pay my bills on time, that’s all I need to worry about.
Your credit utilization ratio plays a big part in determining your score.

MYTH: Carrying a balance helps boost my credit score.
No! It's one of the worst financial practices.

MYTH: Closing an old credit card with a high interest rate will help my score.
Hold on to old accounts even if you don't use them; having a long history of credit is important.

MYTH: Opening a new retail credit card is a good for your score.
No and these cards charge very high interest!

MYTH: It hurts my credit score to comparison shop for a mortgage, auto or student loan

MYTH: The older my unpaid debt, the more it hurts me.
While bankruptcy will remain on your report for up to 10 years, "it’s the newer delinquencies that will be more aggressively collected" and hurt your score

MYTH: Selecting ‘credit’ while using your debit card for a purchase is good for your credit score

MYTH: Credit reports are accurate. 21% of reports contain inaccurate information. Monitor your data by checking your reports every 4 months:
https://www.annualcreditreport.com/

There are a few existing and coming programs that aim to help consumers demonstrate responsible financial behavior in areas not previously visible to the credit-reporting companies.

Rental reporting "Paying your rent on time can now help your credit score. Such reporting is handled either by big landlords and property-management companies or by individuals who go through a company that verifies and reports the payments."
Phone and utility bills "Experian Boost, a free program launched last December by credit-reporting company Experian, factors household payments for services like telephone, cable and utilities into a person’s FICO score. Consumers connect Experian Boost to the bank account they use for paying these bills. The program then pulls the relevant payment history and immediately recalculates their FICO score."
Bank accounts "In a program expected to launch to consumers next year, FICO will begin taking into account consumers’ banking habits. Under the free program, called UltraFICO, consumers sign up to allow the program to link to their checking, savings or money-market accounts. Consumers are then rated on factors including the account balances they maintain, how long the accounts have been open and avoiding overdrafts."
Learn more about free credit reports: https://www.consumer.ftc.gov/articles/0155-free-credit-reports

Required Minimum Distributions from retirement accounts

"RMDs, as they are commonly known, are the minimum amount individuals who are age 70½ and older must take out of their retirement funds such as individual retirement accounts or workplace-based accounts such as 401(k) plans." Lorie Konish explains that RMDs are based on IRS longevity tables.
Key Points

    *"If you’re 70½ or older, or inherited a retirement account, you need to take your required minimum distribution by Dec. 31."
    *"Now is the time to get organized and start thinking about that distribution. If you miss the Dec. 31 deadline, you will face a tax penalty."
    *"Here are the steps to take and moves to consider so you don’t leave money on the table."

“Always take an inventory first, so you know where all your retirement accounts are."
Consult the IRS RMD tables to determine the amount but have a financial professional or the institution holding your account double-check your RMD calculation.

If you have multiple IRAs or 403(b) accounts, you can take your total RMD from any one or a combination of those accounts.

However, if you have more than one 401(k) account, you have to take money from each one.

Be sure to have a plan for paying your income taxes. The full article offers suggestions.

One way to avoid paying taxes on your RMD: Give the money to charity.

"A qualified charitable distribution allows you to make donations to a charity directly from your IRA."

"So if your RMD is $5,000 and you typically give $5,000 to charity each year, you can donate that money and not pay tax on it."

Safety-First Retirement Planning

"Two fundamentally different philosophies for retirement income planning, which I call probability-based and safety-first, diverge on the critical issue of where a retirement plan is best served: in the risk/reward trade-offs of a diversified and aggressive investment portfolio that relies primarily on the stock market, or in the contractual protections of insurance products that integrate the power of risk pooling and actuarial science alongside investments. The probability-based approach is generally better understood by the public. It advocates using an aggressive investment portfolio with a large allocation to stocks to meet retirement goals. My earlier book How Much Can I Spend in Retirement? A Guide to Investment-Based Retirement Strategies provides an extensive investigation of probability-based approaches. But this investments-only attitude is not the optimal way to build a retirement income plan." Read more on the Amazon website about the contrast between "Probability based" and Safety first" approaches to retirement income strategies.

Probability based strategies rely on investing heavily in the stock market. A safety first approach is built upon a lifetime annuity to ensure income lasts as long as you do.

Dr. Wade Pfau is one of the most respected retirement researchers writing and sharing his wisdom today. His new book, Safety-First Retirement Planning: An Integrated Approach for a Worry-Free Retirement is available at Amazon.

Check out Dr. Pfau's list of important questions to answer for the three major types of annuity products.

https://www.advisorperspectives.com/articles/2019/10/18/safety-first-retirement-planning

Pelosi's drug-negotiation proposal would save Medicare $345B

A provision in a bill introduced by House Speaker Nancy Pelosi, D-Calif., that would permit Health and Human Sservices to negotiate prices for as many as 250 drugs per year would save Medicare $345 billion from 2023 to 2029 and lower pharmaceutical industry revenues by $500 billion to $1 trillion over 10 years, according to a preliminary analysis from the Congressional Budget Office. A separate analysis from the CMS Office of the Actuary found Pelosi's plan would reduce health care spending by $480 billion and save US households $158 billion over 10 years through lower premiums and reduced cost-sharing on drugs.

Details at: https://thehill.com/policy/healthcare/465491-cbo-pelosi-bill-to-lower-drug-prices-saves-medicare-345-billion

The Seven-Year Auto Loan: America’s Middle Class Can’t Afford Its Cars

Do you wonder how your neighbor affords a new vehicle every few years? The truth is often ugly!

Ben Eisen and Adrienne Roberts explain in The Wall Street Journal: "Approximately one-third of loans on new vehicles agreed upon in the first half of 2019 were for more than six years,compared with less than 10% a decade ago, according to Experian. With increases in vehicle prices outstripping income growth, the trend is seen as an indication many households struggle to finance their lifestyle."

"For many Americans, the availability of loans with longer terms has created an illusion of affordability. It has helped fuel car purchases that would have been out of reach with three-, five- or even six-year loans."

If you've ever tried to buy a vehicle with cash you likely experienced the hard sell to finance it instead. A buyer can feel like they are being held captive by the dealership if they want to make a cash purchase. That's because "dealers now make more money on the loans their customers take than on the cars they sell."

"The average loan stretches for roughly 69 months, a record. Some last much longer. In the first half of the year, 1.5% of auto loans for new vehicles had terms of 85 months or longer, according to Experian. Five years ago, these eight- and nine-year loans were practically nonexistent."

"As a result, a growing share of car buyers won’t pay off the debt before they trade in their cars for new ones, either because the car is in need of repairs or because they want a newer model. A third of new-car buyers who trade in their cars roll debt from old vehicles into their new loans, according to car-shopping site Edmunds."

And people wonder why so few Americans are financially prepared for retirement!

How a kid’s allowance can teach money management skills

"Teaching children about money management is a big job for parents. Money talk often starts by paying an allowance. According to new research from the American Institute of CPAs (AICPA), two-thirds of parents (66%) give their child an allowance at an average of $30 a week. An allowance is just part of a larger conversation about effective financial management. Parents must make sure the lessons sink in."

"The good news is that nearly half of parents (49%) say they take time to teach their child about money at least once a week. However, nearly a third (32%) say they only teach their children about money no more than once a month, including the 7% who admit they never teach their kids about money."

Of course, much of what children learn about money management from their parents comes from daily observation. Parents who think they don't teach their children financial lessons are kidding themselves.

The article explains how parents can make decisions about how much allowance to give, which should vary with age. Ideas on how to teach children prudent money skills are also addressed. Check out: https://blog.aicpa.org/2019/10/how-a-kids-allowance-can-teach-money-management-skills.html#sthash.ymIVwxYO.dpbs