I received a new ATM bank card and a new Discover credit card in the past few months which carry the new computer chip technology, EMV. This technology is supposed to protect consumers from fraud. At first, I was hesitant to use the new cards, but after my daughter received some unauthorized purchases on her traditional magnetic strip credit card, I activated my new cards immediately. These types of identity theft crimes are all too common. Read more…
Get serious about protecting yourself from identity theft
identitytheft.org.uk
Anya Kamenetz, THE SAVINGS GAME
“Having someone else pretend to be you is now something that has probably happened to you or someone you know. And it’s not as fun as it sounds.According to Bankrate, the financial website, says that 41 million U.S. adults have now had their identities stolen — and another 49 million know someone who has.Having your credit card used without your permission is the commonest, and in some ways the mildest, form of ID theft, because your bank’s fraud alert will likely notify you, cancel the charges and get you a new card before you lose any money.Letting someone get ahold of your Social Security number, date of birth and other biographical information is much worse. You can be liable for thousands of dollars in charges, it can ruin your credit, and once the information is out there changing hands, these violations can be repeated again and again.”
“In past columns I have written that reverse mortgages have become more advantageous for consumers aged 62 and older. That’s because of recent HUD regulatory changes and because some lenders have reduced the initial costs of obtaining these mortgages.
Still, consumers must beware. The Consumer Financial Protection Bureau (CFPB) has identified three lenders who have engaged in deceptive and illegal advertising practices: American Advisors Group, Reverse Mortgage Solutions and Aegean Financial.
Together, these companies have incurred civil penalties totaling $790,000 and will have to modify their advertising policies so that consumers will not be deceived.
Some of the illegal advertisements in question stated that borrowers could not lose their homes, cannot be forced to leave and/or that always retain ownership. In reality, reverse mortgage contracts specify that borrowers must pay homeowner insurance and real estate taxes, maintain the property and comply with other requirements. If the borrower does not do all of these things, the lender can foreclose on the home. If the borrower faces foreclosure, he will lose his home, will be forced to leave and will no longer retain ownership.
In the future, the lenders will have to modify their advertising so that borrowers know that unless they continue to pay all related homeowner insurance and real estate taxes and maintain their property, they can lose their property through foreclosure.”
If you haven’t checked your credit reports for a while or ever, you may want to do so this month. It’s easy and it’s free. By reviewing your reports you might even detect identity theft early and stop it.
Equifax, Experian and TransUnion are the three major credit report firms and you can go to AnnualCreditReport.com to receive free copies of your credit reports. You can choose to get a copy of all three reports now or stagger them throughout the year to monitor your credit.
“A credit report is an organized list of the information related to your credit activity. Credit reports may include:
A list of businesses that have given you credit or loans
The total amount for each loan or credit limit for each credit card
How often you paid your credit or loans on time, and the amount you paid
Any missed or late payments as well as bad debts
Credit reports may also include:
A list of businesses that have obtained your credit report within a certain time period
Your current and former names, address(es) and/or employers
Any bankruptcies or other public record information
Under Federal law, you are entitled to receive one free copy of your credit report from each credit reporting company every 12 months.
Make sure you recognize the information on your credit report including your personally identifiable information, such as names, addresses, Social Security Number, accounts and loans. Then check that the other information on your credit report is accurate and complete. If you find information you believe does not belong to you or is not correct, contact the business that issued the account or the credit reporting company that issued the report.”
Keep these things in mind when you’re looking for a financial adviser
by Alina Tugend
October 8, 2016
“When my family moved to New York from London in 2000, we had two small children and were buying a house in the U.S. for the first time. We needed some financial advice.
A friend recommended her investment adviser, who at the time worked at a big bank. We hit it off, and we soon decided to put him in charge of managing our retirement savings.
I’ve been mostly satisfied with our choice, but now I realize it was more luck than skill. At the time, I had no idea what questions to ask to make sure this adviser would really handle our money responsibly.
So if you’re thinking about hiring someone to help you plan your retirement or improve your personal finances, here’s what I’ve learned in the past 16 years.
First, some definitions of what can be overwhelming jargon: Financial adviser and financial planner are generic terms, often used interchangeably. But certified financial planner (CFP) refers to someone who has passed exams on topics like taxes and retirement planning and is required to adhere to an ethical code. Meanwhile, a registered investment adviser (RIA) describes someone (or a firm) regulated by government securities agencies who gives advice about stocks, bonds and mutual funds. Many such consultants are both RIAs and CFPs.
Second, the most important word you need to know when looking for financial help is fiduciary. That means the person you hire must put your interests before her own, instead of recommending investments that might increase her fees at your expense.”
“For much of the last decade, inflation has been low by historical standards. But, recently, wage growth and higher prices have sent signs that inflation may be making a comeback, serving as a reminder of the risks that come when the buying power of a dollar falls. Such risks always exist, even when they don’t seem so obvious.
If you are a retiree or are planning your retirement, the effects of inflation can be pernicious. Inflation can eat away at spending power. That isn’t necessarily a problem. Some retirees actually see their spending decline as they get older. Still, retirees should at least be aware of the risks posed by inflation. When you are a retiree, you can no longer seek out higher wages to offset higher prices. You have to rely on the inflation protection of your pensions, Social Security, annuities, investments, or other income sources. Consider strategies to maximize these inflation-protection features; otherwise your ability to maintain your lifestyle may decline over time.
Some research suggests that people don’t understand the inflation protection provided by common retirement income sources. A survey from the Financial Literacy Center found that more than 40% of people did not understand how Social Security payments react to inflation—never mind pensions, annuities, or investments.”
The Fed raised rates, and expects the pace of hikes to pick up in 2017. What could it mean for bonds?
Fidelity Viewpoints, December 14, 2016
“For the second time in roughly a decade and the first time in a year, the Federal Reserve has voted to raise interest rates. Treasury bonds, which had already seen sharp losses since the election in November, saw yields climb in trading after the announcement.
While the rate change at the December meeting was widely anticipated by the market, the future path of rates, and what it may mean for bonds and other markets is less certain. Viewpoints caught up with Fidelity Government Income Fund Manager Bill Irving, to get his take on the December meeting, the path forward for the Fed, and what it may mean for investors.” Read more
I think it is premature to call the end of the three-decade bull market for bonds.
“The majority of retirees pay no federal taxes. But taxes should be a concern for retirees who have retirement savings. That’s because the money they take out of their retirement accounts for living expenses will be treated as federal taxable income. It’s difficult enough to figure out how much money to withdraw – and when. Taxes are a separate but related issue.
In this blog, we interviewed Michael Kitces, a well-known financial adviser and partner with a Maryland financial firm, who writes the ‘Nerd’s Eye View‘ blog. He discusses the basics of navigating the tax code. The challenge facing retirees is to make tax decisions today that will minimize taxes now and in the future.
Question: Do you find that new retirees are surprised by their retirement tax situation?
Kitces: It’s usually not even on their radar screen. Pre-tax and post-tax income, different tax buckets – I don’t think most people even think about it once they’re in retirement. That’s why we’re still seeing people who are ‘surprised’ when they turn 70½ and the required minimum distributions (RMDs) begin, and their tax bill gets a whole lot higher. They say, ‘Why didn’t we plan for this?’ We say, ‘We’ve been recommending you plan for this for years!’
The reality is that while we’re working, we don’t think about taxes a lot – the first time you get your paycheck, you notice the difference between what your boss said you were going to get paid and what you take home. You get over that and then work for 40 years, and you just get used to your after-tax cash flow and lifestyle. But when you get into retirement, you have to think about whether accounts are pretax (traditional 401(k)s and IRAs) or after tax (regular bank accounts) or tax free (Roths), and how to draw them down. There’s nothing natural about it.”
