Money Tasks to Take OFF your to-do list

Don't hurry to pay off a low interest mortgage. Buy US I bonds instead. The current rate is 7.12% payable through April 2022. You can't access your money for 12 months but give up access to any mortgage prepayment anyway.  Search for I bonds on this blog for more info. 

Don't be a sucker when the ad says "supplies are limited," "only a few left" or "limited time offer or similar" effort to get you to buy now or you will lose out on savings. It's simply marketing language to get you to part with your money NOW!

Don't track every penny spent. Did I really write that? Most people don't need to obsess over every dollar they spend. Simply follow the 50/20/30 recommendations: 50% of your pay for rent/mortgage and other essential bills (electricity, fuel, etc.); 20% for savings (includes emergency fund, short term goals, and retirement contributions); and 30% for remaining expenses. Pay yourself first with an automatic saving/investing contributions. Pay bills automatically (utilities, insurance, credit cards). 

Don't fall for FOMO (fear of missing out). Skip the cryptocurrency rage and invest in time-tested strategies described in this blog: Keep expenses low, diversify and buy index funds. 

Thanks to Veronica Dagher, writing for The Wall Street Journal, 12/29/21

Student Loans: What were they thinking?

A front page article in The Wall Street Journal (December 20, 2021) is a scathing expose of New York University's (NYU) practice of charging exorbitant tuition while students and parents borrowed far beyond their ability to repay. "NYU Tops Ranks-- in Debt for Grad Student, parents: pricey Manhattan school leaves many families struggling with loans" by Melissa Korn and Andrea Fuller provides gruesome details about the burdensome debt that both NYU undergrads and grad students and they parents are undertaking.  The federal Grad Plus and Parent Plus loans burden families while enriching universities, even ones like NYU that have substantial endowments (but meager student aid). NYU's endowment ended fiscal 2021 at $5.8 billion.

One WSJ graphic shows: "New York university has more graduate programs that leave students with high debt loads compared with their salaries than any other U.S. university."

Majoring in film at NYU is a sure bet to land students (and some parents) in debt loads they will never be able to repay. Meaning the U.S. taxpayer ends up footing the bill.

U.S. Colleges and universities offer so many options and opportunities for quality post-secondary education at affordable rates. Plus part of what students and their families need to consider is: Is it worth going into debt for a degree or credential that is unlikely to pay enough for me to live on, let alone repay student loan debt. 

What I can't wrap my head around is what the students and their parents were thinking when they signed up for huge education loans. 

Student loans cannot be discharged in bankruptcy (another area of my research). 

The last research article I published before retiring from 40+ years of years of teaching/research personal finance, consumer problems:

Johnson, C., O’Neill, B., Worthy, S. L., Lown, J. M., & Bowen, C. F. (2017). What are student loan borrowers thinking? Insights from focus groups on college selection and student loan decision-making. Journal of Financial Counseling and Planning,27, 184-198. 

The answer: they weren't... thinking.

Free Open-source Social Security Strategy Calculator

 Deciding when to claim Social Security retirement benefits can be simple for single, never-married persons but complicated for the rest of us. If you've been divorced, widowed, have a disable child or a child still in high school Social Security decisions are complicated. Even married couples are well advised to use a calculator to help them decide the best claiming strategy. 

Most of us, especially if we expect to live longer than the average American, will benefit (greatly!) by waiting until age 70 to claim SS retirement benefits but you need to get expert advice before you make this extremely important decision.

A free calculator Open Social Security https://opensocialsecurity.com/ was developed by Mike Piper, CPA and author of several personal finance books.

The Open Social Security site was recommended by Wade D. Pfau, Ph.D., CFA, is the curriculum director of the Retirement Income Certified Professional program at The American College in King of Prussia, PA. He is also a principal and director at McLean Asset Management and RetirementResearcher.com.

Check out the website of the Open Social Security calculator: author, Mike Piper, Oblivious Investor (simple, low-maintenance Investing): https://obliviousinvestor.com/

Never pay the first medical bill and how to negotiate the billing system

Never Pay the First Bill: And Other Ways to Fight the Health Care System and Win

Never pay the first bill : and other ways to fight the health care system and win

by Allen, Marshall (Journalist), author.

ISBN:9780593190005

Abstract:

"From award-winning ProPublica reporter Marshall Allen, a primer for anyone who wants to fight the predatory health care system--and win. Every year, millions of Americans are overcharged and underserved while the health care industry makes record profits. We know something is wrong, but the layers of bureaucracy designed to discourage complaints make pushing back seem impossible. At least, this is what the health care power players want you to think. Never Pay the First Bill is the guerilla guide to health care the American people and employers need. Drawing on 15 years of investigating the health care industry, reporter Marshall Allen shows how companies and individuals have managed to force medical providers to play fair, and shows how you can, too. He reveals the industry's pressure points and how companies and individuals have fought overbilling, price gouging, insurance denials, and more to get the care they deserve. Laying out a practical plan for protecting yourself against the system's predatory practices, Allen offers the inspiration you need and tried-and-true strategies such as: Analyze and contest your medical bills, so you don't pay more than you should; obtain the billing codes for a procedure in advance; write in an appropriate treatment clause before signing financial documents; get your way by suing in small claims court. Few politicians and CEOs have been willing to stand up to the medical industry. It is up to the American people to equip ourselves to fight back for the sake of our families--and everyone else"-- Provided by publisher.

 

My nephew was hit by a pickup truck in South Carolina while on a bike tour. Luckily this driver stopped and had insurance and admitted fault. The hit and run driver in Raleigh, N.C. never stopped. Luckily my nephew wasn't seriously hurt by the hit and run driver but sustained extensive damage to his bike which delayed his trip and cost him out of pocket. The South Carolina accident put him in the hospital. He has medical insurance but as part of the saga I'm learning a lot about how our medical billing system works. My nephew has engaged an attorney on a contingency basis to deal with his hospital bills and expenses of repairing his bike and transportation cost back home. 

Listen to an interview (47:28) with the award winning author: https://www.kalw.org/show/your-call/2021-09-23/never-pay-the-first-bill

Marshall Allen, author of Never Pay the First Bill: And Other Ways to Fight the Health Care System and Win, and investigative health reporter who most recently covered the health care industry at ProPublica. Marshall teaches investigative reporting at the Newmark Graduate School of Journalism at CUNY 

Additional Resources for Consumers to determine the fair cost to pay for medical services: 

HealthCareBlueBook: https://www.healthcarebluebook.com

FairHealthConsumers: https://www.fairhealthconsumer.org/

 

Keeping passwords safe with an authenticator app

 By now everyone should be using a Password Manager like Dashlane or LastPass. If you aren't get to it!

Many financial institutions employ two factor authentication where they send a code to your phone. But what if you lose your phone or it's stolen?

Tatum Hunter, writing for The Washington Post also suggests:

"If you want some password hygiene extra credit, take a couple seconds to download an authenticator app. These connect to your accounts and ping you when somebody tries to log on. Then, the app gives you some second piece of info that authenticates your identity and lets you sign in. Google, Microsoft, Twilio and ID.me all make authenticator apps you can access from different mobile devices. Just type 'authenticator' into an app store and download one of these options."

For Covid skeptics... Hard dollar proof from insurance insdustry

 

Mostly due to the pandemic, life-insurance payouts last year rose 15% to $90.43 billion, the sharpest rise since the 1918 influenza epidemic drove them up 41%, according to the American Council of Life Insurers. Meanwhile, sales of insurance policies took their biggest jump in 25 years, according to industry-funded research firm Limra. Combined with good returns on some investments, that lifted industry assets by 7.7% to $8.2 trillion, the ACLI’s figures show. 

Thanks to The Wall Street Journal writer Leslie Scism, December 9, 2021.

Mid to Late Life Divorce

 Ending a marriage? Don’t get divorced from financial reality in the process

Andrew Osterland covers the following points:

• Sound financial planning may be the last thing on your mind when divorcing but it may never be more valuable.
• “People make mistakes in the divorce process that leave them vulnerable,” said certified divorce financial advisor Stacy Francis, CFP, president and CEO of Francis Financial in New York.
• Here are five key financial issues to consider when ending a marriage.

 Five key issues to consider in divorce

1. Mediation versus litigation

2. Budget for the long-term

3. Watch your assets

4. Mind your taxes

5. Update your life   

Details at: https://www.cnbc.com/2021/11/15/dont-get-divorced-from-financial-reality-when-ending-your-marriage.html

A condensed crash course in estate planning with implications for inherited IRAs

 Wow, that's a long title for a blog post but the link below to Inheritance and IRAs is a good refresher/reminder on tasks to complete...soon, maybe before the fast approaching end of the year.

• The importance of having a will
• The tax implications of inheritance for spouses and other beneficiaries
• The different scenarios that can occur in inheritance planning
• The rights spouses and beneficiaries have in the process
• Extenuating circumstances that could change the outcome of an inheritance
• How inheritance works for different types of assets outside of an IRA

https://www.birchgold.com/inheritance-and-iras/