Money

AARP Expert Martin BookerShould you accelerate debt payoff? During the uncertainty of COVID-19, many people are concerned about their finances or continuing to pay off their current debt. One thing to consider when it comes to debt during these uncertain times is should you accelerate debt payoff. Right now, there is uncertainty about the future of jobs and companies across America.   As you consider how to manage your money right now, one important thing to prioritize is liquid savings. If you have not saved an emergency fund (3 months of your expenses if you’re in a double income household or 6 months of your expenses if you’re in a single income household), then you may want to take measures to increase your savings now. Here are some ways to do so:   Reach out to your financial planner to discuss where you can make changes to increase your liquid savings Contact your mortgage lender or leasing office to discuss options for payment deferral Take advantage of the Student loan payment deferral Pay only the minimum balances on debt and move excess money to savings Reach out to companies where you make payments and ask about COVID-19 relief Save money from expenses that have been lowered such as transportation cost   When asking for a deferral or deciding to defer in order to save money, be sure to understand the terms of your deferral before you make a decision. Ask the following questions when contacting a representative:   When will payments begin again? What are my options for payback after the deferment? Will you report missed payments to the credit bureau during this deferral? What will happen to any interest that I owe during a payment deferral? Be as informed as possible so that you in a better situation after we make it through these uncertain times. For more information on managing your budget and debt, check out this recent expert series.  

AARP Expert Martin BookerWhat are the three most important numbers to know when budgeting? AARP Expert Martin Booker offers the following tips:   Income: List all of your income from all sources. Be sure to include sporadic and variable income as well when you budget. When creating your budget, it is better to round down on your variable income in order to prevent a deficit. For example, if your take-home pay is between $489 and $515 a week, you may want to set your projected income at $480 and adjust the income line on payday. Your income is what you will use to fund your current lifestyle and reach your goals.   Expenses: Include all expenses in your budget. It is easy to forget about spending related to self-care or gratuity but as much as you can estimate these expenses, the more accurate your budget will become. It’s important to round up on your expenses if it is a variable expense. By doing so, you can prevent a deficit in your budget when you make payments. For example, if a utility can range between $40 and $55, you may want to set it in your budget at $60 and adjust your budget when you make the payment.   The difference: This is the balance remaining after subtracting your expenses from your income. The difference is the amount of money that you are able to use, for example, to pay off more debt, give to charity or increase your savings. The more that you can increase your income and/or lower expenses the larger the difference. When you determine how you will use the difference, you can determine how soon you can reach that goal by knowing your difference. Any time that there is a deficit when subtracting your expenses from your income, you have two choices. You can either increase your income or decrease your expenses in order to break even or have excess.   After creating your budget, become familiar with your numbers. If you have a significant difference between your income and your expenses, create some important goals to reach such as increasing retirement savings, paying off debt, or saving money for a child’s college. When you know these three numbers, you will be more aware of your finances which can lead to better money management.

AARP Expert Martin Booker answers this question during a March 2020 online event, Ask The Expert: Making Smart Decisions About Credit: I paid off 4 credit cards in the last three months. My credit score dropped. Will it get higher? -by FrancesO708191   Credit card debt is some of the highest interest rate loans that a person can possess. Paying off those credit cards will allow you to save more towards your future, instead of paying for your past. Your score may have dropped because you have no debt utilization from the credit cards at the moment. Once you paid the loan off you have no utilization which can cause a slight drop in your score before it begins to rise again. It is a good idea to keep the cards paid off and if you have other loans, the activity from those loans being paid on time will assist in pulling your score back up. If you do not have any other loans that are being paid and reported to the credit bureau, you can use the following strategy to keep loan activity without going further in debt or paying interest:   Link one bill or pay for a necessity (food or transportation) with your credit card each month When you receive the credit card bill, pay the full balance each month to avoid paying interest. Be careful not to overspend because you’re using a credit card. Use only what you have enough cash to pay off in full. Usually by paying a bill that you’re already schedule to pay, you can keep from overspending. If carrying your credit cards will lead to more spending, do not carry your credit card with you. Use it then put it in a safe place away from yourself. You do this because 35% of your score is factored by paying your bill on time and another 30% is factored by keeping your debt amount low. So, using this method will allow you to get the activity you need while not carrying a balance on your loans which will cause you to pay interest.   To view "Ask The Expert: Making Smart Decisions About Credit" in its entirely, click here.

The following is part of the Ask the Expert series with Amy Nofziger on Identity Theft and Cybersecurity Scams, October 2019. In addition, you're invited to join our current event with Ms. Nofigzer, now thru Monday, March 30, 2020: Ask the Expert: Protect Against Coronavirus Scams Question My 72-year-old mother is ordering and shipping cell phones to a person and others she met online and has never met to other countries. We have confronted her and she continues to do this. At one point, she owed over $1,000 for phones, and her account had to be closed due to lack of payment. She is not senile, and we have had many discussions and she promised not to do it again. Obviously, the behavior has continued. However, she paid a $300 cell phone bill and did not have enough money to pay her rent. She is on a fixed income and has no savings or assets. We are continually having to cover her expenses. How do we put an end to this? Answer Your mom is definitely involved in a scam, and from my 18 years’ experience, it's very difficult to convince some people to stop. These criminals are skilled at what they do, and they have overtaken your mom's cognitive thinking and they are making her think emotionally, with possible fear tactics. I'm not sure from your message how this scam started, but I imagine it was either they claimed that she won a sweepstakes or that they fell in love with her and need these phones for various payment or to stay in communication with her.   If you haven't already, please report this to your local law enforcement and/or file a complaint with ic3.gov or call your local FBI office. What we want to focus on now is getting your mom to STOP sending these phones, and if she realizes that law enforcement is involved, it might jar her into the seriousness of this.   I can imagine you are frustrated and even a little angry, however when speaking with your mom, it's recommended to lead with compassion and empathy. From my experience working with families’ anger towards the victim doesn't help them open up and trust. Remember the criminal is telling them one story in their ear and they are trying to turn your mom against her family. These stories are far too common and we sadly hear them all the time.   Please do not hesitate to call the AARP Fraud Watch Helpline at 1-877-908-3360 and ask to speak to a fraud specialist who can provide you with more support and guidance.   Here is a family that shared their story with AARP. I'm sure you will find some of the feelings similar. https://www.aarp.org/money/scams-fraud/info-2019/mother-conned-sweepstakes.html       *Part of the Ask the Expert series with Amy Nofziger on Identity Theft and Cybersecurity Scams, October 2019. Learn more tips and/or share your stories in our Scams & Fraud forum.

Why should you bank online?

How do I place a freeze on my credit report?

Question What’s the best way to create and keep track of passwords? Answer We are all overwhelmed with passwords, and a password manager might be a good solution for you. As the name suggests, a password manager helps you easily create, store and remember passwords. Many of them are both a website and an app, so you have access to all your passwords regardless of what device you’re on. Many of them are free. In most cases, you set up an account by providing your name, email address and a “master” password to enter your digital locker. Often times people worry about what would happen if their phone or tablet would get lost or stolen — wouldn't the criminal then have access to all their passwords. You need not worry about this, as your device has to be unlocked first — that is, a person would first need to know your PIN or password — and then guess your master password, too, which is highly unlikely, unless you make it easy like 1111 (please don’t use that). And since you can log on to your password manager from virtually any device, you can log in from another machine and change your master password — just in case. If a password manager doesn't seem like something you would be willing to try, I think two-factor authentication is a good solution as well. Two-factor authentication, is a security process in which the user provides two different factors to verify themselves to better protect both the user's credentials and the resources the user can access. So it could be you need to enter a password for the first step and then answer a secret question for the second step.     *Part of the Ask the Expert series with Amy Nofziger on Identity Theft and Cybersecurity Scams, October 2019. Learn more tips and/or share your stories in our Scams & Fraud forum.  

What you should know about credit alerts

Question Why is using Wi-Fi in public spaces like coffee shops and airports risky? What should you do instead? Answer When you are on public Wi-Fi, which is usually found for free at coffee shops, malls, airports, or other public places, you may be putting your personal information at risk, especially if you are inputting credit card numbers, passwords, or bank account information. Hackers will often sit near these Wi-Fi spots and hack into the Wi-Fi to steal any information that is transmitted.   This actually happened to me* a while back. We were in Vegas and I needed to check-in for my flight and purchase a seat. I knew I was taking a risk, but went ahead and did it anyway, hoping for a good outcome. Nope, within one hour I was getting calls from my credit card company that my card was being used across the country. Don't take the risk. If you must do some sort of personal transaction on free Wi-Fi use your cell service, it's safer than free Wi-Fi for sure!   Here are some more tips on keeping safe online from AARP Fraud Watch Network: Public Wi-Fi Scams     *Part of the online community forum Experts Series where AARP Expert Amy Nofziger was asked questions on protecting ones' savings and digital identity.

Question What steps should people take if they suspect they’ve been compromised in a data breach? Answer First, I would consider placing a fraud alert on your credit report. A fraud alert is free and good for one year. You need to make one phone call to one of the three major credit reporting agencies. A fraud alert can make it harder for an identity thief to open more accounts in your name. They will have to notify you first before opening up new credit. The reason I recommend this as a first step is that it's a fairly simple step to take if you are in the midst of finding out your information has been breached and the potential for fraud is high. After this, consider placing a freeze on your credit. Also known as a security freeze, this free tool lets you restrict access to your credit report, which in turn makes it more difficult for criminals to open new accounts in your name. That’s because most creditors need to see your credit report before they approve a new account. If they can’t see your report, they may not extend the credit.   The new credit law, which took effect in 2018, made it so anyone in the country can get a free credit freeze – including children and incapacitated adults (many of whom do not have credit files). On the credit freeze websites, for example, you’ll see options to either place the freeze for yourself or on behalf of another person. For security purposes, some people choose not to send in copies of birth certificates and Social Security cards. But each person looking to do that for the minors in their life will need to make the decision that is best for them.     For more information about both of these options, visit https://www.consumer.ftc.gov/articles/0497-credit-freeze-faqs

Question Does identify theft insurance work, and is it worth the premium? Answer That’s a decision each person will have to weigh for themselves. Most of what ID theft protection can do, you can do for free. The premium is paid, and that might be worth the peace of mind for some. However, make sure to read what the insurance covers. Many people who are victims of ID theft recover most of their financial losses, but they can’t recover their loss of time recovering their identity, and that’s not usually covered by insurance.

  Question Living on a budget? What are your top tips or tricks for tracking expenses and creating a budget? Share your top ideas below! Answer   Here are some community generated tips for living on a budget:    Helps if you’re cheap and only buy when given a great deal. That keeps me from going to Disneyland or overpaying at restaurants or anywhere else.   "Don't spend money when you do not have to." I have always remembered what I was told years ago – reminds me to look at other options.   My mantra has always been: Do I need it, or do I want it? I grew up on skid row, south of San Francisco, next to the railroad tracks. As a child we sometimes didn't have food to eat for 1 or 2 days, but we didn't know we were poor, even with holes in our clothes and shoes. Those days taught me to be frugal. And if I need it and can't afford it, I don't make the purchase. But we were happy and I didn't know until I was older that we were poor. I am still a very happy soul and give to others when I can. Our mother taught us to give not because we had a lot, but because we knew what it was like to have nothing. You would be surprised how much you can give to others "when you have nothing."   See a quarter - pick it up! Another way I save is to pick up coins from the ground when I spot them.  Cash my coins in and get a gift card or buy a meal out that I would not do if I were not spending my change.   One of my best savings tricks is to pay bills early in the month, leave $100 in checking for things, and moving the rest of any money to savings. Once in a while I have to pull some back as I overlooked an annual bill or had an unexpected car repair.  This discipline has allowed me to save several thousand dollars by the end of a year.  Plus, savings usually has a higher interest rate!  Retired at 51 1/2, was fortunate to have a pension that I could survive on.  Able to live this way until I could withdraw annually from 401K account.  And, this year I am able to claim my full SS benefits.  Will continue with my savings scheme, as it has allowed me to travel and open education savings for the "great" niece/nephew generation.   Self-evaluation. I don't have a budget, per se. What I did most of my life, was to re-evaluate the day, each evening and morning, as to what things were done or still needs tending to. Therefore, I had a new "budget' each morning. As long as I didn't waste my money, and lived within my means, everything always worked out (more or less).   If possible, wait to retire. My suggestion, and I realize that we all do not have the opportunity to employ this, is to not retire until such time as we can access retirement funds that are about 10% more than what we need. My belief is that there will always be the unforeseen expense that presents itself....and we better be ready for it.   Create a realistic budget, based on what you have been spending over the last year or so, then track future spending against it. Lots of free computer apps will help but paper and pencil works too. Key is to have realistic expectation and self-assess progress on a continuing basis.   I use Intuit's Quicken to track my expenses and plan out my monthly budget.     Buy in bulk. I like to buy certain items at Costco but the amount is generally too large for one person; so I have 3 friends who like some of the same things and we share the products and the cost which usually turns out then to be cheaper than in other grocery stores.   Shop for birthdays and Christmas year round - I buy at the end of the season - it takes time to go through the sale racks - department and discount stores are best. I keep a box in my closet with a list by name of everything I’ve purchased. I picked up some “dog tag” style Star Wars chain in March $1.99. It was the hit of my 10 yr.old granddaughter’s birthday in July. You will be surprised how many perfect gifts you find at 70-80% off   Eat out. It is just my husband and I at home. When we go to the store for a week at a time and plan out our meals we actually usually spend more than if we just eat out. There are always coupons for places to eat and some places have specials on certain days. Plus there is no mess to clean up afterward.   Play hardball. My local newspaper subscription jumped to $261.83 for the next 13 weeks.  I called and said, "Can't do that.  How much would you charge for the digital subscription instead?"  The response was "I can offer to extend the same print subscription to you for that same price for 6 months instead, if you'd like."  It took 3 minutes to save $261.83.  And, I was bluffing.  I prefer to read the paper.   Price comparison shopping. I can do a lot of price comparisons for an item and eventually get tired of doing it and decide to not buy it. It ends compulsive purchases. Use deal sites. Have you tried signing up for free grocery cash back programs? Try ibotta.com, savingstar.com or checkout51. You won't find all the products you’re looking for but I received $73.00 cash back since July on ibotta alone.It's worth a look.  Try Groupon for restaurants and most definitely worth trying ebates.  Received over 8.00 off my new Fitbit tracker plus 10.00 for spending over 25.00.  As long as you’re buying only what you would buy anyway and not buying just for the fun of a cashback reward.   One other tip I wanted to share is a site called "Brad's Deals" I like this site for several reasons. Almost everything is free shipping. All merchandise is from "legitimate" stores, not a website managing orders. When something is on sale, with a manufacturers rebate, store credit (Kohl's cash), etc. ALLof the forms you need to submit for rebate are right there on the site. So you don't have to go hunting around on coupon sites to locate a rebate which may or may not exist.  Example: Daughter wanted Kitchen Aid Stand Mixer (Retail $499.00) - found on Brad's deals at Kohl’s. $100.00 rebate Kitchen Aid, 30% off on sale, $75.00 in Kohl’s money NET: $121.00 for the Stainless Steel Stand Mixer.  (Purchased in Oct.)  One drawback is sometimes it can take a while depending on location - I just got some PUMA leather sneakers for $15.00 shipped from a retailer in Florida and it took 2 weeks. They give you a "market overview" as to how the price on this deal stacks up with other prices out there.          More tips from a savvy saver: I'm 70, married with no children.  Having no children definitely helps live easier during retirement.  Believe it or not, I planned my retirement at age 14.  It came to past.  During my working years, I saved as much as possible.  We did travel all over Europe and the Eastern Mediterranean but we NEVER went into debt for anything until our first home.  Too many people buy boats, RV's, motorcycles, etc.  Most of which they might use once a year.  Rent it.  It's cheaper.  When planning your retirement, decide if you want to move.  If you do, check out the income taxes, property taxes, etc.  I live in Oregon with high income taxes.  But, I do not pay any as I am not working and my retirement is exempted due to a special law that exempts a portion of or all of your military retirement if your duty covers certain years.  Otherwise I would have had to live in a state I did not want.  Pay off your mortgage before you retire.  Don't keep giving money to adult children and relatives or you will never retire.  Don't co-sign for any loans for anyone for anything.  Unless you are very wealthy, you will never retire if you have any loans.  Move to a smaller house or apartment, at least half the size of your current one.  Once retired work part-time if you want and if anyone will hire you after age 50.  Once we reached social security age, i.e. 62, we both took it.  Yes, one receives a reduced monthly payment, but, how long do you really expect to live?  I've known too many who died at age 70 through 76.  Why wait to collect SS?  Keep at least two years annual pre-retirement income in savings.  Six months savings is nothing.  Don't touch any types of IRA's until your late '60's.  Make sure you take out just enough to keep you from going into a higher tax bracket.  Save what you take out.  If you have retirement from your job and healthcare - great.  Use them.  If you do not have any retirement but have to retire on savings alone, then you need at least 1.5 million saved in order to take out only 4% a year to get $60,000 pretax dollars.  Of course this must be adjusted so that you never use your base savings amount - until you get really old.  The wage earner needs to provide income for the spouse if that person dies first.  Get insurance on yourself.  The most important thing after the above has been done - don't overspend, i.e. go into debt or spend all of your savings.  We live comfortably, buy what we want and still save.  We don't scrimp.  Hope this helps.   A fun alternative - Best way to double your money is to fold it in half and put it back in your pocket. My parents used to say that, as they were depression era. Read AARP's 6 Ways to Get Your Finances Ready for 2019 article for financial advice.    

Question  What's some advice for protecting your identity online?   Answers Never give your Social Security number, phone number, where you reside, or bank information. Make sure you create your personal Social Security Account with the the Social Security Administration, even though you may not be drawing Social Security checks yet (each SS# can create only one, and by you creating one then scammers cannot use your SS# to create one & steal your money). Put a credit lock on yourself with the three major credit bureaus and remember to put the “unlock” code in a very safe place. Enroll in a good identity theft monitoring service that includes the black web, and provides you with access to monthly credit reports and FICO scores. The Federal Trade Commission has excellent information on their website about protecting your identity and your children's identity Closely monitor your financial accounts.  Create strong passwords, and change them at least quarterly. Use different passwords for different sites. Keep your passwords private. Mix up the characters so that there are no distinguishable words and use/subscribe to a password app/service such as Dashlane or 1Password or Lastpass, so that you don't have to worry about memorizing your password and more importantly, so it will make the process of creating complex passwords more convenient and safe for you, since you won't have to memorize them, or write them down! Never write them down anywhere. Password apps like these have counterpart apps for your phone, Mac or PC, so they'll be accessible and encrypted where ever you go. Shred any snail mail that you receive before tossing it. Protect your web access at home. Learn about protecting your home network. In a nutshell, try to turn off the broadcast to your routers SSID or network name. Set up encryption for your network and password protect access to it. If you don't know what I'm talking about, that's not a good thing. Talk to an expert or research to learn more. Don't open Emails you do not recognize. These are often physhing exercises. Have security software on but know hackers can break through.  Add NOMOROBO.com if it's available with your phone system, it's free for many land lines. Avoid responding with confidential information when using a public/ guest hotspot. If you do need to access the internet while out and about, use Virtual Private Network (VPN) software or better yet, a VPN device to encrypt your public Wifi session. Or at the very least, use your phone or tablet and connect over your cellular account to surf the web instead of using Wifi.   Learn from the personal experiences of others:   Last week I got a call from "Social Security" stating there were some type of fraud going on, I looked at the number they used to call me and then I began asking questions like - who are you and what is your name? I also said this is "Social Security" correct and he said yes, he then asked me for my social security number to verify if it is me. I then said to him if you were "Social Security" you would already know my number and then he hung up. Always get a name and their number and hang up. And then you can Google the information to find out if it's fraud.   I was a victim of fraud many years ago, so I have first hand experience unfortunately. Locking your credit won't protect you online, but it is an identity issue that could result if you do not take seriously, steps that will reduce your chances of having your identify stolen because of online internet access. To help minimize your exposure. Protect your computer and web experience. There are quite few in the marketplace. Most of the good ones require a monthly or yearly subscription. The important thing is, there are many ways for you to get hacked when accessing the web, and online security is like a service. The more you scrimp, the more you increase your chances of being hacked. Go with nothing and your risking a lot. A tool such as this will reduce the chances of vulnerability. 

Question I'm looking for Windows software that will help with projections. I know my Social Security and pension at diffferent ages and my income from my IRA. I'd like to try some software that allows me to input these incomes and also expenses and tax assumptions for several decades. Can anyone suggest anything?     Answers Excel.     https://www.mywealthtrace.com/ I used the free version for a year, then became a paid subscriber. Good stuff. Monte Carlo simulations, variable inputs, what-if scenarios, slider bars for instantaneous feedback on changing returns, retirement age, expenses, etc. Feeds from all your accounts if you want. I meet periodically with the fellow that authors the software to go through my plan. I also have the Vanguard and Fidelity planners, and have used T.Rowe Price. I like this more.      In addition to looking at the MyWealth subscription products, I might also look at some Mac products, e.g., Quicken, etc.     (1) I use my own Excel workbooks that I have developed since around 1992. Yes, it's a lot of work. (2) I *also* recommend a free online retirement planner (works for you during retirement, too).This is at www.i-orp.com. This is a retired guy's life's work and it is really strong. It does take some time to understand it, but it is very powerful and will hold its own against anything, paid commercial or otherwise. I am getting concerned about it as I have *just* retired and I'm afraid the author will not be maintaining this for too many more years. Still, it is well worth some serious investigation. The big thing for this software is that it optimizes your retirement draws from SS, tax deferred accounts, taxable accounts, etc., to determine your optimal annual draw from all accounts so you don't run out of dough at the end.   (3) I love the commercial products put out by Professor Kotlikoff from Boston University. Cost is manageable for a single license of any of them. "Maxifi" is similar to i-ORP. (4) i-ORP does not link to your existing financial accounts, nor does Maxifi as far as I know. For this consolidated record keeping there are lots of new "apps" out there such as Mint, etc. For this use I simply use my Excel workbooks (and use a Google Sheet with Google Finance functions to get the daily prices).

Grandparents are often among the most important people in our lives. As we celebrate them on September 9, know that they are at risk for the “grandparent scam.” Here’s how grandparents are targeted. Have you ever encountered this scam? How It Works: You get a frantic call from someone claiming to be your grandson or granddaughter.  The caller says there’s an emergency and asks you to send money right away. But there’s a good chance this is an imposter trying to steal your money through the “grandparent scam.”   Scammers usually claim to be in a desperate situation, such as being involved in a car accident or needing money to get out of a legal mess. The caller poses as your grandchild, or a law enforcement officer or attorney calling on your grandchild’s behalf – whatever it takes to sound convincing.  Read an account of how the scam played out for one grandmother. What You Should Know: The caller may have personal information, such as family member’s names that they could have found on social media sites. The caller will likely ask that you send the money by wire transfer or gift card. They will likely beg you to not tell anyone.    What You Should Do: Try to reach the person the caller is claiming to be directly. If you can’t reach him or her, contact a friend or family member to try and validate the emergency. Ask some questions that would be hard for an imposter to answer, like a pet’s name or a mother’s birthday. Don't send money unless you're sure the situation is real.     

Question How can I protect myself from the Tech Support Scam?    Answer The Tech Support Scam is one of the most common scams right now. Microsoft did research around 2015 and found out that billions of dollars had been lost to this scam. So thank you for warning the AARP online community.   A few things about this scam to keep in mind and to help you stay safe:   Computer companies don't proactively reach out to consumers to let them know about potential virus on their computers. If anyone calls asking to remote access into your computer, hang up. If you receive a pop up on your screen telling you that there is a virus and you need to call a phone number, click out of the box, or you may even have to "hard shutdown" your system to get it to go away, but don't call the number or click on any links. Never give personal or financial information to anyone who calls you, nor pay for any services like this, in pre-paid gift cards.  

Question What is an app to alert of scams on mobile devices?   Answer There are many apps in the App Store. Some are free, some cost. A few of the products are hiya, Truecaller, PrivacyStar, and many others. Find the one that looks best for you by reading through the reviews and knowing which features you want.   Also, on your landline, there is a service called nomorobo, that operates similar blocking services on traditional landlines.