Utah retirement reform throws some retirees into debt

Salt Lake Tribune columnist Paul Rolly explains the problem facing Utah public employees who retired, collected retirement benefits, and then got another job (often part-time) with the state. "Since the Utah Legislature passed sweeping reforms of the state’s retirement system three years ago, one unintended consequence has thrust some retirees under a mountain of debt because they took a part-time job to supplement their incomes."  "The section biting retirees now is the part that ends so-called double dipping, in which employees retire, then get another job with the government while drawing retirement benefits. After it was determined that privilege was being abused, the legislation ended the practice, requiring employees to pay back benefits if they get another government job in retirement." Be sure you understand the terms of your retirement plan to avoid a similar dilemma! Read the details at: http://www.sltrib.com/sltrib/politics/56148482-90/retirement-employee-state-benefits.html.csp

Medigap Plan Benefits for Medicare

The Medicare rights Center provides a useful one page table to help select a Medigap plan to supplement Medicare (for ages 65 & older). The plans get more generous but also more expensive as you progress through the alphabet starting with Plan A, the least costly plan. See:  http://www.medicarerights.org/pdf/june2010medigaps.pdf

How Working in Retirement Affects Your Social Security Benefit

"If you choose to continue working after claiming Social Security benefits, the earned income will not affect your benefits as long as you've reached full retirement age. If you have not yet hit full retirement age and you earn more than $15,120 from your job, you'll face Social Security benefit reductions. However, the withheld benefits will be factored into a monthly benefit recalculation once you reach your full retirement age." 
"For people who did file at 62 and regret the decision, the way to make up for that is to, if possible, go back to work and have your benefit withheld," says Elaine Floyd, director of retirement and life planning at Horsesmouth. "If you work and if your benefit is withheld, it will be recalculated at full retirement age to give you back the reduction that was deducted." Details at: http://money.usnews.com/money/retirement/articles/2013/04/15/how-working-in-retirement-affects-your-social-security-benefit

IRS Warns about Charity Scams Following Tragedies in Boston and Texas

"It’s sad but true. Following major disasters and tragedies, scam artists impersonate charities to steal money or get private information from well-intentioned taxpayers. Fraudulent schemes involve solicitations by phone, social media, email or in-person."
"Scam artists use a variety of tactics. Some operate bogus charities that contact people by telephone to solicit money or financial information. Others use emails to steer people to bogus websites to solicit funds, allegedly for the benefit of tragedy victims. The fraudulent websites often mimic the sites of legitimate charities or use names similar to legitimate charities. They may claim affiliation with legitimate charities to persuade members of the public to send money or provide personal financial information. Scammers then use that information to steal the identities or money of their victims." Learn more at: http://www.irs.gov/uac/IRS-Wants-You-to-Know-About-Schemes,-Scams-and-Cons:

Parents teach kids how to spend but not how to save

"A survey by T. Rowe Price finds that 75% of parents talk with their children about shopping and spending but not budgeting, planning and saving."
"While many parents in the survey think they strongly encourage their kids to talk about money, only 19% of children agree. In fact, close to one-quarter of child respondents say their parents discourage them from talking about money. The survey shows children want to learn the financial basics with 34% citing wanting to know how banks and credit cards work, 29% would like to learn about managing money and 27% have inflation questions." Check out: http://www.foxbusiness.com/personal-finance/2013/04/15/it-time-to-talk-to-your-kids-about-your-finances/

Women “Reactive,” Not Planning Finances

is the title of the Squared Away blog post about research conducted at Utah State University by graduate student Megan Rowley and professors Jean Lown & Kathy Piercy. 
"What motivates women to get to work on their personal finances?  Change.
Emotions are also important motivators.  But 'the most compelling factor' spurring most of the women interviewed in a focus group to take action was a significant life change, Utah State University researchers write in the Journal of Financial Counseling and Planning.
Since April is financial literacy month, Squared Away is again making an appeal to women, who continue to make strides professionally, yet lag men in understanding how to manage their money." So check out the excellent Squared Away blog produced by the Center for Retirement Research at Boston College. http://squaredawayblog.bc.edu/squared-away/women-reactive-not-planning-finances/ Sign up for regular email updates on their website. The blog provides high quality, research-based personal finance and retirement information.

Girl Scout study of girls' financial literacy

"Girls age 8 to 17 are upbeat about their future prospects, but just 12% say they're confident about making financial choices, a survey from the Girl Scout Research Institute shows. About 40% said they don't know how to use a credit card, and only 38% knew what a credit score is." Parents need to spend more time educating their children about financial management. Most kids learn by watching their parents which may not be the best introduction to prudent financial attitudes and practices. Learn more from KTVX (abc) in Salt Lake. http://www.abc4.com/content/news/state/story/Girl-Scout-study-about-financial-decisions/0mpJYRs9wEGVZ1FMa8GoQg.cspx

Don't fall for tax refund scams!!

Tis the season for scams based on luring people to provide info in response to an email purporting to need more info in order to process a tax refund. The IRS will NEVER contact you by email! Don't ever provide private information via email. Further, watch out for ID theft related to income tax returns. for more info: http://www.irs.gov/uac/Taxpayer-Guide-to-Identity-Theft-1

Social Security Claiming Strategies Speaker at USU September 11

Join Financial Planning for Women on Wednesday, September 11 at 11:30 in the USU Taggart Student Center room 336 to hear financial planner Suzanne Dalebout discuss SS retirement benefit claiming strategies.  This month only, the evening program (7:00 -8:30 pm) will be held at the Logan Library Bonneville room.  The library's address is 255 N. Main BUT enter from the west facing doors (from 100 West where there is ample free parking).
Deciding when and how to claim retirement benefits is critical for long term financial security; the decision is particularly complex for married couples. Naive decisions can result in thousands of dollars in lost benefits.A great resource to introduce the topic is: The Social Security Claiming Guide: http://crr.bc.edu/special-projects/books/the-social-security-claiming-guide/ 
Bring your lunch, a friend, and your spouse/partner. Men are always welcome to attend FPW and this month's program is especially applicable for spouse/partners.

Related resources from the Center for Retirement Research at Boston College: The Social Security Fix-it Book "a citizen’s guide; a review of the program, its financing problem, and the leading proposals for eliminating the shortfall. Everything the earnest but overburdened citizen needs to know. Cheerfully narrated and handsomely presented in 28 pages." http://squaredawayblog.bc.edu/wp-content/uploads/2011/01/social_security_fix-it_e-book_-_sm2.pdf

Make your Home more Energy Efficient

My husband & I installed solar panels in 2012 and were pleased to discover that federal & state tax credits reimbursed half the cost! Solar panel costs are dropping rapidly due to increased production. With almost all of Utah's electricity generated by dirty coal, it's great to reduce that source of air pollution by generating our own electricity. A few years ago we used the credit to install efficient windows and more insulation. The info below is quoted directly from the IRS. 

Get Credit for Making Your Home Energy-Efficient

If you made your home more energy efficient last year, you may qualify for a tax credit on your 2012 federal income tax return. Here is some basic information about home energy credits that you should know.
Non-Business Energy Property Credit

• You may claim a credit of 10 percent of the cost of certain energy saving property that you added to your main home. This includes the cost of qualified insulation, windows, doors and roofs. 
• In some cases, you may be able to claim the actual cost of certain qualified energy-efficient property. Each type of property has a different dollar limit. Examples include the cost of qualified water heaters and qualified heating and air conditioning systems.
• This credit has a maximum lifetime limit of $500. You may only use $200 of this limit for windows.
• Your main home must be located in the U.S. to qualify for the credit.
• Not all energy-efficient improvements qualify, so be sure you have the manufacturer’s credit certification statement. It is usually available on the manufacturer’s website or with the product’s packaging.
• The credit was to expire at the end of 2011. A recent law extended it for two years through the end of 2013.

Residential Energy Efficient Property Credit

• This tax credit is 30 percent of the cost of alternative energy equipment that you installed on or in your home.
• Qualified equipment includes solar hot water heaters, solar electric equipment and wind turbines.
• There is no limit on the amount of credit available for most types of property. If your credit is more than the tax you owe, you can carry forward the unused portion of this credit to next year’s tax return.
• You must install qualifying equipment in connection with your home located in the United States. It does not have to be your main home.
• The credit is available through 2016.

Use Form 5695, Residential Energy Credits, to claim these credits. You can get Form 5695 at IRS.gov or order it by calling 1-800-TAX-FORM (800-829-3676).