dependents http://www.wisebread.com/taxonomy/term/19994/all en-US 5 Estate Planning Questions Everyone Should Ask http://www.wisebread.com/5-estate-planning-questions-everyone-should-ask <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-estate-planning-questions-everyone-should-ask" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/gavel_and_a_last_will_and_testament.jpg" alt="Gavel And A Last Will And Testament" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>There are no guarantees when it comes to the number of years everyone gets on this earth. You may plan to live well into your 90s, but circumstances &mdash; and your health &mdash; can change very quickly. This is why it's important not to put off the uncomfortable but necessary work of planning your estate.</p> <p>Not sure where to start? Ask yourself these five key estate planning questions.</p> <h2>1. Why haven't I created a will?</h2> <p>You might not be rich, or even old, but that doesn't mean you don't need a will. A will is for anyone who wants to leave behind assets to loved ones or specify who should raise their children if they die.</p> <p>That last point is especially important. If you are a parent of young children, you need to spell out in a will who should take guardianship of your sons or daughters should you unexpectedly pass away. If you don't, the courts will make that decision for you. Don't leave this up to chance. Draft a will and include these instructions. If you already have a will but you've had a major life change since you wrote it, it's probably time to <a href="http://www.wisebread.com/6-times-you-need-to-update-your-will?ref=internal" target="_blank">update your will</a>.</p> <p>It's best to work with a legal professional when drafting your will. A professional can help you list clearly who gets what assets. If you want to leave your home to a loved one after you die, you might need to take the extra step to create a trust, too. This can get complicated, so again, it's best to work with an attorney. (See also: <a href="http://www.wisebread.com/heres-what-happens-if-you-dont-leave-a-will?ref=seealso" target="_blank">Here's What Happens If You Don't Leave a Will</a>)</p> <h2>2. Do I have enough life insurance?</h2> <p>Life insurance is a necessary financial protection for your loved ones. If you should pass away unexpectedly, would your spouse be able to afford the monthly mortgage payments? Would your children be able to remain in the home in which they've grown up?</p> <p>Life insurance can help ensure that your loved ones don't have to worry about paying their bills after you die. Upon your death, your life insurance will give an agreed-upon payment to your beneficiary, who can use that money to cover anything from mortgage payments to college tuition.</p> <p>There are two main types of life insurance: term and whole. Term life insurance is less expensive but still provides solid coverage. With this type of insurance, you pay a premium for a certain number of years, perhaps 20 or 30. If you die during this time, your policy pays out. Once that term expires, you'll need to buy a new policy if you want to maintain life insurance coverage.</p> <p>Whole life insurance is usually more expensive, but you don't have to worry about renewing after a term ends. Instead, you pay a premium every month &mdash; or every year &mdash; for the rest of your life. There is no end limit on the premium. The policy will pay out when you die.</p> <p>How much life insurance do you need? That depends on your situation. Do you have young children dependent on your income? Does your spouse work? Are all your children young adults who are earning livings of their own? You'll want more life insurance coverage the younger and more dependent on your income your loved ones are. Your life insurance payout should at least cover the debt you owe for your mortgage, car, credit cards, and education. (See also: <a href="http://www.wisebread.com/term-vs-whole-life-insurance-heres-how-to-choose?ref=seealso" target="_blank">Term vs Whole Life Insurance: Here's How to Choose</a>)</p> <h2>3. What do I want to do with my home?</h2> <p>One of the biggest assets you might have is your home. A home, though, can be a problem after you die.</p> <p>If you've paid off your home and own it, you'll have to determine what you want your survivors to do with that residence. Do you want to leave your home to a child? That can be a tough decision if you have more than one child. Or do you want your children to sell the home and split the proceeds? Make sure you specify in your will what your preference is for dealing with your home. This can help prevent tension among your survivors.</p> <p>If you haven't finished paying off your house, your options may be more limited. Funds from your estate may be used to pay off the debt you owe to your mortgage lender. But if your estate doesn't have enough money to cover this, your home might have to be sold, especially if none of your survivors want to take on your remaining mortgage payments. (See also: <a href="http://www.wisebread.com/why-you-may-need-a-revocable-living-trust?ref=seealso" target="_blank">Why You May Need a Revocable Living Trust</a>)</p> <h2>4. Will anyone know how to find my key documents?</h2> <p>Where do you keep your most important financial documents? Do you have a designated place for everything, from your will, to your tax returns and bank statements, to instructions for your funeral?</p> <p>Wherever that place is, you need to make sure that your loved ones know where to find these important papers. Having a will doesn't help if no one can find it. And making sure that your next of kin know exactly where your checkbook, bank account statements, and past tax returns are stored can ease the burden they'll face when trying to move on from your death. (See also: <a href="http://www.wisebread.com/9-end-of-life-cost-savings-your-survivors-will-thank-you-for?ref=seealso" target="_blank">9 End-of-Life Cost Savings Your Survivors Will Thank You For</a>)</p> <h2>5. Who will care for your pets?</h2> <p>Do you share your home with a beloved pooch, cat, or parakeet? What would happen to these companions if you should pass away?</p> <p>If you want to make sure that your pets are cared for after you pass, leave instructions. You can include this information in a will, especially if you are going to leave your pets to a family member. You might want to also set up a savings account or leave a sum of money that will help cover the costs of caring for your pets, as a way to ease any burden on family members.</p> <p>If you have no one to care for your pets after you die, you might specify in your will that you'd like your animals donated to a pet-care organization. (See also: <a href="http://www.wisebread.com/6-reasons-you-need-to-include-pets-in-your-will?ref=seealso" target="_blank">6 Reasons You Need to Include Pets in Your Will</a>)</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F5-estate-planning-questions-everyone-should-ask&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F5%2520Estate%2520Planning%2520Questions%2520Everyone%2520Should%2520Ask.jpg&amp;description=5%20Estate%20Planning%20Questions%20Everyone%20Should%20Ask"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/5%20Estate%20Planning%20Questions%20Everyone%20Should%20Ask.jpg" alt="5 Estate Planning Questions Everyone Should Ask" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/5-estate-planning-questions-everyone-should-ask">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-times-you-need-to-update-your-will">6 Times You Need to Update Your Will</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-fair-way-to-split-up-your-familys-estate">The Fair Way to Split Up Your Family&#039;s Estate</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/when-dropping-your-life-insurance-is-the-right-decision">When Dropping Your Life Insurance Is the Right Decision</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/dont-make-these-5-common-mistakes-when-writing-a-will">Don&#039;t Make These 5 Common Mistakes When Writing a Will</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-money-moves-to-make-before-you-remarry">8 Money Moves to Make Before You Remarry</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance beneficiaries children dependents estate planning funerals last will and testament life insurance pets will Mon, 05 Mar 2018 09:00:07 +0000 Dan Rafter 2110678 at http://www.wisebread.com 5 Kinds of Insurance Every Retiree Should Consider http://www.wisebread.com/5-kinds-of-insurance-every-retiree-should-consider <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-kinds-of-insurance-every-retiree-should-consider" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/senior_couple_sit_on_steps_outside_their_house.jpg" alt="Senior couple sit on steps outside their house" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Your insurance needs don't remain constant throughout your life. You need different insurance coverage when you're single and in your 20s than you do when you're raising a family in your 40s. When you retire, your insurance needs will evolve once again.</p> <p>There are certain types of insurance protections you'll no longer need after leaving the workforce, and other types that you'll want to add. Here is a primer on the kinds of insurance that every retiree should consider.</p> <h2>1. Health insurance</h2> <p>You'll absolutely need health insurance after you've retired. Health care costs are only rising, and seniors tend to spend a large percentage of their income on medical care each year.</p> <p>A study released by Fidelity Benefits Consulting said that the average 65-year-old couple retiring in 2017 would need $275,000 to cover their medical expenses throughout retirement. That number isn't falling, either. Fidelity reported that the 2017 figure is up from the $260,000 that the average 65-year-old couple needed in 2016.</p> <p>Most seniors will qualify for Medicare, the federal health care insurance program, when they turn 65. Medicare isn't free, but it does cost far less than what you'd pay for private insurance. Medicare covers a lot, but it doesn't cover every medical service you might need.</p> <p>Do you need to purchase supplemental health insurance to boost the coverage you're already getting with Medicare? That's not an easy question to answer. It all depends on your health and how often you plan on visiting a doctor after you retire. For many retirees, Medicare may be adequate. (See also: <a href="http://www.wisebread.com/5-common-medicare-myths-debunked?Ref=seealso" target="_blank">5 Common Medicare Myths, Debunked</a>)</p> <h2>2. Homeowners or renters insurance</h2> <p>Will you still own a home after you retire? If so, you still need your homeowners insurance policy. This policy will pay out to help you rebuild if your home is damaged by a fire or other natural disaster. It will also help you pay for any items inside your home &mdash; such as electronics, clothing, furniture, and jewelry &mdash; that get stolen or damaged in a disaster.</p> <p>Renters insurance works the same way, but it protects people who are renting an apartment. If you plan on ditching your home and renting after you retire, make sure to invest in a renters insurance policy. Think about how much money you'd need to replace your valuables if they were stolen or destroyed. (See also: <a href="http://www.wisebread.com/5-reasons-you-definitely-need-renters-insurance?Ref=seealso" target="_blank">5 Reasons You Definitely Need Renters Insurance</a>)</p> <h2>3. Auto insurance</h2> <p>If you plan to keep driving after retirement, you'll need to pay for auto insurance. It's illegal in most U.S. states to drive without car insurance.</p> <p>Maybe you're planning to sell your car and move into an urban neighborhood after you retire. Instead of doing your own driving, you plan to walk, take public transportation, or Uber to grocery stores, movie theaters, and restaurants. In this case, getting rid of your car insurance might make sense. But even if you're hanging onto your car only for emergencies or long trips, you'll need to keep your auto insurance policy.</p> <h2>4. Life insurance</h2> <p>Life insurance is usually one type of policy you can drop after retirement. After all, life insurance is a way to protect your loved ones who are dependent on your income. Once you get to retirement age, these dependents &mdash; usually your children &mdash; should be self-sufficient. They won't need a payout after you die to pay their bills.</p> <p>But what if your spouse or children still aren't financially self-sufficient by the time you retire? If that's the case, you should hang onto your life insurance policy. Maybe you have a child with special needs. That child might still rely on financial assistance from you. What if you were gone and you didn't have a life insurance policy? Would that child still get the financial assistance necessary?</p> <p>In most cases, retirees no longer need life insurance policies. But for special cases, keeping the policy is the smart move. (See also: <a href="http://www.wisebread.com/when-dropping-your-life-insurance-is-the-right-decision?ref=seealso" target="_blank">When Dropping Your Life Insurance Is the Right Decision</a>)</p> <h2>5. Umbrella insurance</h2> <p>What if someone was visiting your home and seriously injured themselves? Would your homeowners insurance policy provide enough protection? Maybe. But umbrella insurance can provide retirees with the peace of mind that they'll be protected even if their homeowners insurance doesn't offer enough coverage.</p> <p>Umbrella insurance provides <em>extra </em>liability coverage above the limits of your homeowners and auto insurance policies. Basically, it pays out in cases where your homeowners and auto policies don't pay enough to cover all of the damages for which you are responsible.</p> <p>Say you get into an auto accident that ends up with a liability claim of $1 million. If your auto insurance only covers a maximum of $500,000 for liability, your umbrella policy would cover the remaining $500,000. (See also: <a href="http://www.wisebread.com/beware-your-insurance-may-not-cover-these-8-losses?ref=seealso" target="_blank">Beware: Your Insurance May Not Cover These 8 Losses</a>)</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F5-kinds-of-insurance-every-retiree-should-consider&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F5%2520Kinds%2520of%2520Insurance%2520Every%2520Retiree%2520Should%2520Consider.jpg&amp;description=5%20Kinds%20of%20Insurance%20Every%20Retiree%20Should%20Consider"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/5%20Kinds%20of%20Insurance%20Every%20Retiree%20Should%20Consider.jpg" alt="5 Kinds of Insurance Every Retiree Should Consider" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/5-kinds-of-insurance-every-retiree-should-consider">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/beware-your-insurance-may-not-cover-these-8-losses">Beware: Your Insurance May Not Cover These 8 Losses</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-times-when-bundling-insurance-doesnt-make-sense">4 Times When Bundling Insurance Doesn&#039;t Make Sense</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-myths-about-money-in-retirement">5 Myths About Money in Retirement</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/why-your-group-life-insurance-is-not-enough">Why Your Group Life Insurance Is Not Enough</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-common-medicare-myths-debunked">5 Common Medicare Myths, Debunked</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Insurance Retirement auto insurance dependents health care health insurance homeowners insurance life insurance medicare renters insurance umbrella insurance Thu, 01 Mar 2018 09:30:09 +0000 Dan Rafter 2107316 at http://www.wisebread.com Here's What Happens If You Don't Leave a Will http://www.wisebread.com/heres-what-happens-if-you-dont-leave-a-will <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/heres-what-happens-if-you-dont-leave-a-will" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/testament_gavel_and_sacks_with_dollar_sign.jpg" alt="Testament gavel and sacks with dollar sign" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>According to a recent Caring.com survey, 58 percent of Americans currently do not have a will. For those with children under the age of 18, the numbers are even worse &mdash; only 36 percent of these parents and guardians have a will, meaning a full 64 percent of people who are taking care of minor children have no end-of-life plans in place.</p> <p>Americans are really falling down on the job when it comes to estate planning in part because we just don't want to think about our own mortality. And it can be hard to worry too much about what will happen to our assets after we're gone since we won't be around to see it.</p> <p>But dying intestate does have some pretty serious consequences, even though you won't be the one experiencing them. Here's the sobering truth about what happens if you don't have a will in place when you die. (See also: <a href="http://www.wisebread.com/what-you-need-to-know-about-writing-a-will?ref=seealso" target="_blank">What You Need to Know About Writing a Will</a>)</p> <h2>The state will make decisions about your minor children</h2> <p>Who gets to make decisions about your young children if you're not around? For most two-parent households, it's easy to assume that there will always be one parent around even if illness, accident, or bad luck strikes the other. But what if you are a single parent, a divorced parent, or a parent in a blended family? Or what if &mdash; heaven forbid &mdash; something should happen to both parents at once? In that case, dying intestate would mean your state of residence will be making choices about your children's well-being, rather than you.</p> <p>Even though the odds are in favor of parents living to see their kids reach adulthood, having a will in place can offer you peace of mind. It allows you to decide who will take care of your kids, rather than leaving it up to others to decide. (See also: <a href="http://www.wisebread.com/dont-make-these-5-common-mistakes-when-writing-a-will?ref=seealso" target="_blank">Don't Make These 5 Common Mistakes When Writing a Will</a>)</p> <h2>Your stuff will go to your next-of-kin</h2> <p>Let's say your closest living relative is your odious brother. You've never been close to him, and he's been nothing but abusive your entire life &mdash; but the last straw was when he made it clear that he disapproved of your long-term relationship with your live-in girlfriend, who is the love of your life.</p> <p>If you die without a will, he will inherit everything, even if you want your assets to go to her.</p> <p>The state assigns inheritance based on degree of familial relationship, since there is no other fair way of determining what you would have wanted. So even though you swore you'd never speak to your brother again, he will still be your sole heir if you die intestate.</p> <p>This is a particularly tough problem for unmarried life partners. Without either a will or the legal status conferred by marriage, the death of one member of such a couple can be devastating to the surviving partner. Such survivors can lose out on everything from financial assets their partner intended them to have, to the very roof over their heads if the house they shared is part of the decedent's estate.</p> <p>Even uncoupled individuals need to worry about this aspect of dying without a will. A never-married individual with no children may wish to leave all their worldly goods to a favorite charity. But without a will, the estate will go to your nearest relative, who might be someone you have never met. Better to have a will in place and know that your money will enrich the charitable institutions you care about, rather than have an estranged relative be glad you're dead. (See also: <a href="http://www.wisebread.com/6-times-you-need-to-update-your-will?ref=seealso" target="_blank">6 Times You Need to Update Your Will</a>)</p> <h2>An executor will be assigned to your estate</h2> <p>After you pass away, someone needs to be in charge of the logistical details of your estate. That position is known as &quot;executor,&quot; and their duties include:</p> <ul> <li> <p>Managing your assets until they can be distributed to your heirs.</p> </li> <li> <p>Terminating your accounts and credit cards.</p> </li> <li> <p>Notifying banks and government agencies of your death.</p> </li> <li> <p>Paying debts.</p> </li> <li> <p>Paying continuing expenses with estate funds.</p> </li> <li> <p>Paying your final income taxes.</p> </li> <li> <p>Supervising the distribution of your property.</p> </li> </ul> <p>When you write your will, you get to choose who will serve as executor to your estate. This is an important decision, since your executor will need to be trustworthy, will need to know you well enough to know where to find your important documents, and will need to be able to handle the sometimes considerable time commitment necessary to carry out all of the duties associated with the job.</p> <p>Without a will in place, however, the court will appoint someone to the position of executor. While the court will generally appoint a surviving spouse or other family member as executor, this can potentially be disastrous if the court-chosen executor is unable to handle the responsibility. (See also: <a href="http://www.wisebread.com/9-end-of-life-cost-savings-your-survivors-will-thank-you-for?ref=seealso" target="_blank">9 End-of-Life Cost Savings Your Survivors Will Thank You For</a>)</p> <h2>Probate may take longer</h2> <p>Probate is the legal process of determining the deceased's assets and liabilities and transferring title of those assets to the legal heirs. All estates over a certain dollar threshold must go through probate, but having a will in place can help speed up the process somewhat since it will take less work to identify and assess the deceased's property when it's already been specified in the will.</p> <p>There are several reasons why you might want to spare your heirs a prolonged probate process. To start, the cost of probate can be expensive. While small estates can avoid probate &mdash; and the definition of small depends on which state you live in &mdash; estates over a minimum dollar threshold will have to go through the process, and the cost of probate will be taken from the estate. This means dying without a will can cost your heirs.</p> <p>In addition, probate procedures are all public record, meaning anyone can learn more about your estate than you might want them to know.</p> <p>Finally, the process of probate can be incredibly frustrating. Just ask the siblings of legendary musician Prince, who died without a will in April 2016. More than a year after his death, the court is still trying to determine the specifics of the musician's $200 million estate, including everything from who is a legitimate heir to who owns Prince's back catalog of music.</p> <h2>Your will, or the court's way?</h2> <p>Your assets will be distributed after your death, whether or not you write a will. But without a will in place, it will be the courts deciding who gets guardianship of your children, who gets your assets, and who will take care of the logistics of your estate. Rather than put your loved ones through a difficult process that doesn't reflect your choices, take the time to write a will, and keep it updated throughout your life. Your family will be glad you did.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fheres-what-happens-if-you-dont-leave-a-will&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FHere%2527s%2520What%2520Happens%2520If%2520You%2520Don%2527t%2520Leave%2520a%2520Will.jpg&amp;description=Here's%20What%20Happens%20If%20You%20Don't%20Leave%20a%20Will"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/Here%27s%20What%20Happens%20If%20You%20Don%27t%20Leave%20a%20Will.jpg" alt="Here's What Happens If You Don't Leave a Will" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/emily-guy-birken">Emily Guy Birken</a> of <a href="http://www.wisebread.com/heres-what-happens-if-you-dont-leave-a-will">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-3"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-times-you-need-to-update-your-will">6 Times You Need to Update Your Will</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-end-of-life-cost-savings-your-survivors-will-thank-you-for">9 End-of-Life Cost Savings Your Survivors Will Thank You For</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-estate-planning-questions-everyone-should-ask">5 Estate Planning Questions Everyone Should Ask</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-fair-way-to-split-up-your-familys-estate">The Fair Way to Split Up Your Family&#039;s Estate</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-solve-these-6-problems-your-heirs-could-have-with-your-estate">How to Solve These 6 Problems Your Heirs Could Have With Your Estate</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance courts dependents dying intestate estate planning heirs last will and testament next of kin probate Wed, 14 Feb 2018 09:30:09 +0000 Emily Guy Birken 2103693 at http://www.wisebread.com 6 Times You Need to Update Your Will http://www.wisebread.com/6-times-you-need-to-update-your-will <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-times-you-need-to-update-your-will" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/mother_and_father_at_home_with_newborn_baby.jpg" alt="Mother And Father At Home With Newborn Baby" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>If you have a will, you're already one step ahead of most people. According to a recent survey by Caring.com, 60 percent of U.S. adults don't have a will or a living trust.</p> <p>But simply creating a will isn't enough; you must also update it every time you reach a major life milestone. After all, your assets and beneficiaries can change several times long before you reach old age. If you were to pass away before those changes are reflected in a will, your assets may not be distributed to your heirs in the way you had intended. (See also: <a href="http://www.wisebread.com/what-you-need-to-know-about-writing-a-will?ref=seealso" target="_blank">What You Need to Know About Writing a Will</a>)</p> <p>If you've recently gone through one of these big life changes, it's time to sit down and update your estate plan.</p> <h2>1. Marriage</h2> <p>A will that designates what goes to your spouse will make things easier on them when you die. Joint property ownership is automatically turned into complete ownership by the surviving spouse after one spouse dies, and that can't be changed by a will. However, the surviving spouse will need a will to direct what to do with the house after <em>they</em> die.</p> <p>Also, some things may not automatically go to your spouse as a beneficiary if you haven't updated your will. For instance, say you receive an unexpected inheritance just before you die, such as the house of a long-lost relative. Is that joint property with your spouse? Not if it isn't listed in your will. Such assets could go to probate, which is why it's better to have an updated will.</p> <p>What if you and your spouse both die at the same time and neither of you have a will? Other trusts such as life insurance policies and retirement plans will have named beneficiaries. The home will automatically go to those people without requiring a will. But everything else will end up in probate court if there are no wills. (See also: <a href="http://www.wisebread.com/dont-make-these-5-common-mistakes-when-writing-a-will?ref=seealso" target="_blank">Don't Make These 5 Common Mistakes When Writing a Will</a>)</p> <h2>2. Divorce</h2> <p>A marriage adds a person to your life who should be added to a will; in a divorce, you may want to remove that person from your will. Do you want to leave your grandmother's jewelry to your ex-wife? Many people would say no.</p> <p>You may also want to update your will after a change in relationship with any other member of your family. Maybe the executor of your will who you named years ago is no longer of sound mind and capable of doing such duties. Or maybe someone you've left a large asset to has died. These are all reasons to update a will.</p> <h2>3. Children</h2> <p>When a child is born, it creates a potential new heir. A will can declare who you would want to be the guardian of your minor children upon your death. Otherwise, if you don't have a will and have young children, your surviving spouse may have to go to court to be appointed guardian of the children's property, according to Sherman Silverstein, a law firm in New Jersey.</p> <p>If a husband and wife die simultaneously without wills, the state may take over the care and support of minor children, and name relatives or someone else to take over their care, according to Silverstein. That's why it's important for both parents to have wills.</p> <p>If there are certain assets you want give to your children, you also need to spell this out in a will and make sure it's regularly updated. Without one, state law may divide your property between your surviving spouse and children against your wishes. If property is left to minor children, a guardian must be named to administer the property for them. It could be someone who is raising the children or someone else. (See also: <a href="http://www.wisebread.com/the-fair-way-to-split-up-your-familys-estate?Ref=seealso" target="_blank">The Fair Way to Split Up Your Family's Estate</a>)</p> <h2>4. Death of an heir</h2> <p>If an heir dies before you do, anything left to them upon your passing could be in flux if your will isn't updated. Without any named heirs, property may pass to the state instead of to friends and relatives.</p> <p>If your spouse dies before you while any of your children are still minors, you'll want to update your will so that you can direct relatives and friends to select a guardian that they agree upon in case of your death. You also may want to direct the probate court to make the selection in the case that the relatives and friends you named can't agree on a guardian.</p> <h2>5. Real estate purchase or sale</h2> <p>Buying or selling a house is a major life event and can be a reason to celebrate. It can also be a reminder that it's time to update your will.</p> <p>As stated above, joint ownership of a home will pass on to your spouse if you die without a will. But other circumstances, such as your spouse also dying, can create the need for a will when you own property.</p> <p>If you're moving out of the state where you executed your will, check with an attorney in your new state to see if the will is still valid. State laws for wills can vary, and you shouldn't assume yours meets the requirements in your new state.</p> <h2>6. Major adjustment to investment portfolio</h2> <p>If your estate has had a substantial increase or decrease in value, then it's time to update your will. This can include your stocks increasing substantially in value, the sale of a major asset, the founding of a business, or anything else that has a big impact on your finances. You may want to change how much you give to one beneficiary over another, for example, or leave a new business to your daughter who is interested in it.</p> <p>Whatever life events come at you &mdash; and whenever &mdash; it's a good idea to review your will every year. A will is meant to disburse your assets according to your wishes. And those wishes may not be so easy to follow if your will has old information.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F6-times-you-need-to-update-your-will&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F6%2520Times%2520You%2520Need%2520to%2520Update%2520Your%2520Will.png&amp;description=6%20Times%20You%20Need%20to%20Update%20Your%20Will"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/6%20Times%20You%20Need%20to%20Update%20Your%20Will.png" alt="6 Times You Need to Update Your Will" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/aaron-crowe">Aaron Crowe</a> of <a href="http://www.wisebread.com/6-times-you-need-to-update-your-will">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-7"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-estate-planning-questions-everyone-should-ask">5 Estate Planning Questions Everyone Should Ask</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/heres-what-happens-if-you-dont-leave-a-will">Here&#039;s What Happens If You Don&#039;t Leave a Will</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-fair-way-to-split-up-your-familys-estate">The Fair Way to Split Up Your Family&#039;s Estate</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-end-of-life-cost-savings-your-survivors-will-thank-you-for">9 End-of-Life Cost Savings Your Survivors Will Thank You For</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-protect-yourself-financially-during-a-divorce-or-separation">How to Protect Yourself Financially During a Divorce or Separation</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance assets children death dependents divorce estate planning heirs homeownership last will and testament marriage update wills Thu, 07 Dec 2017 09:30:06 +0000 Aaron Crowe 2063303 at http://www.wisebread.com 5 Details Your Financial Adviser May Be Ignoring http://www.wisebread.com/5-details-your-financial-adviser-may-be-ignoring <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-details-your-financial-adviser-may-be-ignoring" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/mature_couple_meeting_with_financial_advisor.jpg" alt="Mature Couple Meeting with Financial Advisor" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>All financial advisers are not created equal. And all financial advice &mdash; including advice recommended by top economists and financial experts &mdash; may not be the best advice for you.</p> <p>Your financial plan should encompass your complete financial picture, including your goals and priorities. It should include planning for your children, your spouse, aging parents, long-term care, death, loss of income, and so much more. But just because these things <em>should</em> be included in your plan doesn't mean your adviser is automatically doing so.</p> <p>Here are five key things your financial adviser may ignore or omit telling you.</p> <h2>1. He or she is not a financial fiduciary</h2> <p>The term financial adviser is becoming increasingly ambiguous. Due to the complex rules that determine who can call themselves a &quot;financial adviser,&quot; many professionals who are unqualified to give financial advice are unfairly operating under this label.</p> <p>Benjamin Brandt, a North Dakota financial adviser and host of the podcast <em>Retirement Starts Today Radio</em>, recommends that you only take advice from and follow a financial plan created by a qualified fee-only financial fiduciary. Fee-only fiduciaries are paid a flat fee that ensures they don't earn commissions on investment sales. Since they don't depend on commissions from sales, you won't have to question whether a fiduciary adviser is operating with your best interest at heart.</p> <p>To ensure you are working with a true financial fiduciary, Brandt recommends checking the adviser's credentials using the Paladin Registry, which offers a <a href="http://www.paladinregistry.com/research/credentials-financial-certifications" target="_blank">database of financial adviser designations</a> that can help determine if the adviser holds a professional designation (CFP, CPA, ChFC, and CFA) versus one they may have purchased online. (See also: <a href="http://www.wisebread.com/investment-advice-you-should-never-hear-from-your-financial-advisor?ref=seealso" target="_blank">Investment Advice You Should Never Hear From Your Financial Adviser</a>)</p> <h2>2. Your complete financial picture</h2> <p>Understanding your complete financial picture &mdash; including where you are currently and your future aspirations &mdash; is key in developing a true financial plan that is beneficial.</p> <p>According to Brandt, if a financial adviser shows you a glossy sales brochure and offers you investment products before ever looking at your budget, net worth statement, or written financial goals, you are not working with a fiduciary and should ignore his or her financial advice.</p> <p>Before sitting down with an adviser, it helps to take a good look at your finances. Things like calculating your net worth, setting your financial goals, and creating an informal budget before your first visit with an adviser can help you start off on the right foot.</p> <p>And while your calculations and budget may not be entirely accurate (hence the need for a financial adviser), you will have a better idea of where you are and what you have. It will provide your adviser with a more comprehensive financial picture. It will also allow you to discuss your liabilities and other investments that may not be profitable, as well as help to avoid duplicate investments. (See also: <a href="http://www.wisebread.com/11-secrets-you-need-to-tell-your-financial-adviser?ref=seealso" target="_blank">11 Secrets You Need to Tell Your Financial Adviser</a>)</p> <h2>3. Your personal and financial goals</h2> <p>A financial adviser who fails to ask about your financial goals as it relates to your children, your spouse, and your lifestyle is doing you an injustice. An adviser who merely wants to sell and manage your investments can actually set you up to lose more money long-term than if they include your financial priorities in the plan up front.</p> <p>Take, for example, a parent who wants to send their children to school without student loans. That parent would need to explore options that help in saving specifically for college. This could be done through traditional methods or less conventional saving vehicles such as a 529 plan. There are many factors that can shape that decision and a good financial adviser should work with that parent to determine the best savings vehicle to suit the needs of that family.</p> <p>Your financial adviser should understand and respect your financial goals and find the best avenues to help you achieve those goals. Things they should know and consider are:</p> <ul> <li> <p>If you are working to reduce or eliminate debt.</p> </li> <li> <p>Your plans for one-time expenses such as paying for a wedding or taking a large vacation.</p> </li> <li> <p>Education planning for you or your children (private school, college, continuing education programs, or advanced degrees).</p> </li> <li> <p>A possible career change by you or your spouse.</p> </li> <li> <p>If you are planning to start a business.</p> </li> </ul> <h2>4. Preparations for long-term care</h2> <p>According to LongTermCare.gov, 70 percent of people turning 65 will require long-term care services sometime in their lives. And of that number, the U.S. Department of Health and Human Services found that 18 percent will have to live in a long-term care facility.</p> <p>According to insurance firm Genworth, the average annual cost of a stay in an assisted living facility is $45,000, while a stay in a nursing home with a private room costs an average $97,455 per year. And avoiding a stay in a facility isn't necessarily the answer to saving money on long-term care; an individual receiving 44 hours of in-home health care weekly can expect to pay close to $50,000 per year.</p> <p>Long-term care services come with significant costs that often impact retirement plans, savings and assets, and the level of care one receives. If your adviser doesn't account for these expenses in your financial plan, they are putting you at risk of financial turmoil later in life.</p> <p>This means that for some, considering their age, family history, and potential health risks, a health savings account (HSA) may make more sense than a traditional IRA. With a traditional IRA, you contribute pretax dollars to the plan and the money grows tax-deferred. You pay taxes when you withdraw the money when you retire.</p> <p>To enroll in an HSA, you must have a high-deductible health insurance plan (HDHP). With an HSA, you get the same pretax contribution benefit, but the difference is that when you withdraw money to pay for qualified health insurance premiums or medical expenses (including nursing home stays and in-home care), it comes out tax-free. And the funds rollover from year to year, so you don't lose what you don't spend.</p> <p>But again, the decision on whether or not to invest in an HSA can only be determined on a case-by-case basis. What may make sense for one situation could be detrimental in another. (See also: <a href="http://www.wisebread.com/10-reasons-an-hsa-is-actually-worth-having?ref=seealso" target="_blank">10 Reasons an HSA Is Actually Worth Having</a>)</p> <h2>5. Tax efficiency</h2> <p>Unfortunately, a lot of financial advisers fail to take the time to comb through your tax returns to check for tax efficiency. And tax efficiency is one area where a good financial adviser can be the most helpful.</p> <p>An adviser who only focuses on managing your portfolio may not have the expertise to accurately analyze your tax situation and understand how to maximize your income assets. A financial adviser who holds a CPA or CFP designation, on the other hand, would most likely be qualified to provide sound tax advice.</p> <p>Financial planner Charles Scott recently told <em>USA Today</em> that if the only tax advice your adviser gives is to put your money in tax-deferred investments such as an IRA or 401(k), you may want to get a second opinion. Because even though you'll be in a lower tax bracket when you retire than you are currently, there are so many other factors that must be considered. He advises that you diversify your tax load now <em>and </em>in the future.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F5-details-your-financial-adviser-may-be-ignoring&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F5%2520Details%2520Your%2520Financial%2520Adviser%2520May%2520Be%2520Ignoring.jpg&amp;description=5%20Details%20Your%20Financial%20Adviser%20May%20Be%20Ignoring"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/5%20Details%20Your%20Financial%20Adviser%20May%20Be%20Ignoring.jpg" alt="5 Details Your Financial Adviser May Be Ignoring" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/denise-hill">Denise Hill</a> of <a href="http://www.wisebread.com/5-details-your-financial-adviser-may-be-ignoring">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-6"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/what-you-should-ask-your-financial-adviser-at-your-annual-meeting">What You Should Ask Your Financial Adviser at Your Annual Meeting</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/3-reasons-to-be-picky-when-hiring-a-financial-planner">3 Reasons to Be Picky When Hiring a Financial Planner</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/do-you-need-a-financial-planner">Do You Need a Financial Planner?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-questions-your-financial-adviser-should-ask-you">5 Questions Your Financial Adviser Should Ask You</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-money-moves-every-single-parent-should-make">5 Money Moves Every Single Parent Should Make</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance children dependents fiduciary financial advisers financial goals financial planners ignoring investments long term care retirement taxes Fri, 17 Nov 2017 09:30:10 +0000 Denise Hill 2055199 at http://www.wisebread.com When Dropping Your Life Insurance Is the Right Decision http://www.wisebread.com/when-dropping-your-life-insurance-is-the-right-decision <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/when-dropping-your-life-insurance-is-the-right-decision" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/family_property_life_and_health_insurance_concept.jpg" alt="Family property, life and health insurance concept" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Life insurance is a crucial way to protect your family if you should suddenly pass away. The payout from a life insurance policy can help your loved ones continue to pay a mortgage and other large bills they may not otherwise be able to afford.</p> <p>Life insurance is so important that few people ever decide to terminate their policies. But are there times when canceling a life insurance policy actually makes sense?</p> <p>The surprising answer? Sure. It all depends on who continues to rely on your income and who doesn't.</p> <h2>Your children</h2> <p>When deciding whether to cancel a life insurance policy, don't focus solely on your age. Yes, the odds are higher that once you get older (past retirement age), you won't have as many people relying on the money you are making today. With fewer people depending on you financially, it might make sense to cancel your life insurance policy and save the money you are spending on premiums.</p> <p>Life insurance is most important when you are worried about providing your children with a financial safety net. When your children are young, they need the financial protection that a life insurance policy provides. After all, they won't be working or generating their own income.</p> <p>But when your children become adults, they might no longer need the payout that your life insurance would provide them if you should die. Canceling a policy designed to protect your kids is usually a sound financial move once these children become adults who are working and providing for themselves.</p> <h2>Your spouse</h2> <p>What if your life insurance policy is also a form of protection for your spouse or partner? That might change your decision to cancel, even as you get older.</p> <p>Say you die at the age of 65. Would a payout from a life insurance policy provide that extra bit of financial protection to your spouse or partner? Would it help ensure that this person won't struggle with finances after you die?</p> <p>If the answer is yes, canceling your life insurance policy may not be the right move. You may want to hold onto that policy, even as you inch closer to retirement age. (See also: <a href="http://www.wisebread.com/when-should-single-people-get-life-insurance?ref=seealso" target="_blank">When Should Single People Get Life Insurance?</a>)</p> <h2>Getting a better plan</h2> <p>There are other reasons to cancel your life insurance. Say you are no longer happy with your current plan; maybe the monthly premiums seem too high.</p> <p>If you shop around and can find a plan that provides enough coverage at a lower price, canceling your existing policy is not only OK, it ranks as a smart financial move.</p> <p>Just be sure to compare your existing policy with your potential new one carefully. Yes, a new policy might be cheaper &mdash; but it might also not provide the same amount of coverage. Make sure to do your research before canceling any life insurance policy.</p> <h2>You've already paid for your biggest expenses</h2> <p>Life insurance is supposed to be a financial safety net for your loved ones in case you suddenly die. But what if you've already paid off your mortgage? Your spouse or partner won't need a payout from your life insurance policy to cover that bill. What if you've already paid for sending your children to college? Life insurance isn't necessary to help cover this big expense, either. So why not cancel your policy if those big expenses are already in your past?</p> <p>You can take the money you were spending on life insurance premiums and save it for retirement, add it to your emergency fund savings, or invest in the stock market.</p> <p>Of course, this type of plan only works if you actually will take the money you were spending and do something financially savvy with it. But canceling a life insurance policy when the big bills are paid can be an effective way of putting your dollars to better use.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fwhen-dropping-your-life-insurance-is-the-right-decision&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FWhen%2520Dropping%2520Your%2520Life%2520Insurance%2520Is%2520the%2520Right%2520Decision.jpg&amp;description=When%20Dropping%20Your%20Life%20Insurance%20Is%20the%20Right%20Decision"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/When%20Dropping%20Your%20Life%20Insurance%20Is%20the%20Right%20Decision.jpg" alt="When Dropping Your Life Insurance Is the Right Decision" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/when-dropping-your-life-insurance-is-the-right-decision">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-estate-planning-questions-everyone-should-ask">5 Estate Planning Questions Everyone Should Ask</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/when-should-single-people-get-life-insurance">When Should Single People Get Life Insurance?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/why-your-group-life-insurance-is-not-enough">Why Your Group Life Insurance Is Not Enough</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/term-vs-whole-life-insurance-heres-how-to-choose">Term vs Whole Life Insurance: Here&#039;s How to Choose</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-money-moves-every-single-parent-should-make">5 Money Moves Every Single Parent Should Make</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Insurance beneficiaries canceling children dependents estate planning expenses life insurance mortgages Tue, 14 Nov 2017 09:31:05 +0000 Dan Rafter 2051050 at http://www.wisebread.com Here's How Your Taxes Will Change After You Have a Kid http://www.wisebread.com/heres-how-your-taxes-will-change-after-you-have-a-kid <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/heres-how-your-taxes-will-change-after-you-have-a-kid" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-520005424.jpg" alt="Couple finding out how taxes change after having a kid" title="" class="imagecache imagecache-250w" width="250" height="142" /></a> </div> </div> </div> <p>There's no question that having a kid will change your life financially. Introducing a new child to your household adds a slew of new costs, but the good news is that the American tax code is written to help families with some of these expenses.</p> <p>The IRS &mdash; yes, that benevolent organization &mdash; offers a variety of tax credits, deductions, and other incentives that could lead to a smaller tax bill when you have a child. But this also makes your taxes more complicated. So here's a review of what your new baby might mean as you file this year's return.</p> <h2>You get to claim an exemption just for having a kid</h2> <p>When you have a child, you can claim an exemption that will reduce your taxable income by $4,050. And for each child you have, you get to claim another exemption. (So four kids represents $16,200 deducted from your taxable income.)</p> <h2>You can also claim the child tax credit</h2> <p>Yes, you get an additional break on your taxes just by adding a member to your family. You can reduce your tax bill by $1,000 for every dependent in your household. This usually includes any family member 17 or under that lives with you, including adopted children, foster children, and even nieces and nephews if you are their primary caregiver. The benefit is reduced once you hit $110,000 gross income if filing jointly, or $75,000 if filing alone.</p> <h2>You can reduce your taxable income by saving for college</h2> <p>The second you have a child, you can begin saving for college and get some nice tax breaks for doing it. The most popular vehicle is called a 529 college savings plan, and many states allow you to deduct contributions from your taxable income. Gains on the investments in a 529 plan also are not taxed. (See also: <a href="http://www.wisebread.com/the-9-best-state-529-college-savings-plans?ref=seealso" target="_blank">The 9 Best State 529 College Savings Plans</a>)</p> <p>You may save money when you eventually send your child to school. As of 2016, it was possible to get a $2,000 Lifetime Learning Credit each year for qualified education expenses, or a $2,500 American Opportunity Credit. There are <a href="https://www.irs.gov/publications/p970/ar02.html#en_US_2016_publink1000255787" target="_blank">some subtle differences</a> between the two credits, which you can learn more about <a href="https://www.irs.gov/publications/p970/ch03.html" target="_blank">at the IRS website. </a></p> <h2>You might take advantage of a health savings account</h2> <p>You and your partner might not worry about health care expenses, but they become more of an issue when you have kids. Many employers offer health savings accounts (HSAs), which allow you to divert some money into an account to pay for health care expenses you might accrue. Any money placed in an HSA is deducted from your taxable income. You may find it's worth contributing to an HSA if your child has health challenges, or if you have a health insurance plan with a high deductible. (See also: <a href="http://www.wisebread.com/how-an-hsa-saves-you-money?ref=seealso" target="_blank">How an HSA Saves You Money</a>)</p> <h2>You might save less for retirement &mdash; and thus pay more tax</h2> <p>Are you planning to dial back your retirement savings in order to meet the financial demands of a new child? If so, it's important to know how that impacts your tax bill. Any contributions you place in a 401(k) or traditional IRA are deducted from your taxable income, so if you are putting less aside, your tax bill may be higher. Ideally, you'll be able to save at the same rate as always, but if not, be sure to anticipate paying more in tax.</p> <h2>You may pay less tax if you stop working</h2> <p>Many families find that their gross income goes down after having a kid because one parent stops working full-time or altogether. Lower income means lower taxes, and you may even move into a lower tax bracket. (Moving from $80,000 to $60,000 in earned income, for example, means you pay 15 percent in tax instead of 25 percent when filing jointly.) This lower tax helps take the sting out of having less income overall, and in some cases, you may even end up with more take-home pay.</p> <h2>If you pay for child care, you might get a tax break</h2> <p>The IRS allows parents to save money on their taxes if they pay someone to care for their children. This is a great thing for working parents. The child and dependent tax credit offers up to $1,050 for one person receiving care, or $2,100 for two or more. Poorer families can get 35 percent back of any qualifying child care costs.</p> <p>Many parents may save more on their taxes by instead utilizing a dependent care flexible savings account. If your employer offers such an account, you can set aside as much as $5,000 of your paycheck to cover child care costs. Contributions to this account are deducted from your taxable income, thus reducing your tax liability.</p> <h2>If you employ a nanny, your taxes could get complicated</h2> <p>In most cases like the situations above, there are tax breaks to help offset the cost of child care. But if you directly hire a nanny &mdash; as opposed to hiring one through an agency &mdash; you may be considered an employer in the eyes of the IRS. That means a boatload of paperwork, and you're on the hook for things like Social Security, unemployment, and Medicare taxes. So be sure to take all of this into account when researching child care options.</p> <h2>Expanding your home may have tax advantages</h2> <p>When you have a child, you may realize you need to expand your home with a new family room, bedrooms, or other space. The bad news here is that you can't claim the cost of home improvements on your taxes. But, any home upgrades will be added to the cost basis of your home. Thus, you may be able to reduce or even eliminate capital gains taxes when you sell.</p> <p>If you do make upgrades, you can deduct the cost of things to make the home more energy-efficient, such as Energy Star rated windows and appliances.</p> <h2>Adopting a child comes with a big tax break</h2> <p>If you adopt a child, you get some significant tax breaks in addition to the ones listed above. The Federal Adoption Tax Credit gives families a maximum of $13,460 to offset qualified adoption expenses. This can include adoption fees, court fees, travel costs, and attorney fees, among other costs. Parents who adopt a child may also receive additional tax credits from their state.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/heres-how-your-taxes-will-change-after-you-have-a-kid">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-tax-mistakes-new-parents-make">4 Tax Mistakes New Parents Make</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/can-your-spouse-be-a-dependent-on-your-taxes">Can Your Spouse be a Dependent on Your Taxes?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/save-money-with-a-dependent-care-tax-credit-and-fsa">Save Money with a Dependent Care Tax Credit and FSA</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/dont-miss-out-on-this-easy-way-to-pay-for-child-care">Don&#039;t Miss Out on This Easy Way to Pay for Child Care</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-money-moves-to-make-as-soon-as-the-kids-move-out">7 Money Moves to Make as Soon as the Kids Move Out</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Family Taxes adoption american opportunity credit child care children deductions dependents exemptions kids lifetime learning credit parents tax credits Tue, 28 Mar 2017 09:30:33 +0000 Tim Lemke 1913753 at http://www.wisebread.com 8 Money Moves to Make Before You Remarry http://www.wisebread.com/8-money-moves-to-make-before-you-remarry <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/8-money-moves-to-make-before-you-remarry" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-158851087.jpg" alt="Making money moves before remarrying" title="" class="imagecache imagecache-250w" width="250" height="142" /></a> </div> </div> </div> <p>Every year, about three per 1,000 Americans <a href="https://www.cdc.gov/nchs/fastats/marriage-divorce.htm" target="_blank">divorce from their spouse</a>. Since about seven per 1,000 Americans marry every year, there is a chance that some divorcees will eventually tie the knot again with a new partner.</p> <p>But before you remarry, you should evaluate your finances. Let's review eight money moves that will set you both up for financial safety and success.</p> <h2>1. Make Amendments to Your Will (or Make One!)</h2> <p>The joy of finding love again can make you look at everything through a rosy filter. While no one likes thinking about their mortality, especially close to a big wedding day, the reality is that not updating your will could leave your new partner (and potential dependents) with a messy court battle for your estate. Review your current will and update it as necessary. For example, you may redistribute your estate to include your new dependents and choose a different executor &mdash; a person who will manage your estate and carry out the orders in your will.</p> <p>If you don't have a will, then setting one up should become the top priority of all money moves before you remarry. In the absence of a will, a judge will appoint an administrator who will execute your estate according to your state's probate laws. What is legal may not be the ideal situation for your loved ones, so plan ahead. (See also: <a href="http://www.wisebread.com/what-you-need-to-know-about-writing-a-will?ref=seealso" target="_blank">What You Need to Know About Writing a Will</a>)</p> <h2>2. Update Beneficiaries Listed on Your Retirement Accounts</h2> <p>Even after setting up or updating your will, you still need to update the list of beneficiaries listed for your retirement accounts. This is particularly important for 401K plan holders. The Employee Retirement Security Act (ERISA) stipulates that a defined contribution plan, such as a 401K, must provide a <a href="https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/faqs/qdro-drafting" target="_blank">death benefit to the spouse</a> of the plan holder.</p> <p>Your beneficiary form is so important that it can supersede your will under many circumstances. When updating your beneficiary form before you remarry, there are three best practices to follow:</p> <ul> <li>Get written consent from your previous spouse, if applicable, to make changes;<br /> &nbsp;</li> <li>Second, designate only children who are of legal age so they can actually carry out their wishes;<br /> &nbsp;</li> <li>Third, find out the tax implications for beneficiaries other than your spouse as a large windfall could unintentionally create a financial burden.</li> </ul> <h2>3. Consider Setting Up a Trust</h2> <p>Since we're talking about potential financial burdens, many of them could come out of an estate with lots of valuable assets being divided among many beneficiaries, many of them very young.</p> <p>When you have accumulated a lot of wealth over the years, you could be better served by a trust than by a will for several reasons, including keeping your estate out of a court-supervised probate, maintaining the privacy of your records, and allowing you to customize estate distribution. While the cost of setting up a trust can be up to three times that of setting up a will, it can be a worthwhile investment to prevent costly legal battles. (See also: <a href="http://www.wisebread.com/should-you-set-up-a-trust-for-your-child?ref=seealso" target="_blank">Should You Set Up a Trust for Your Child?</a>)</p> <h2>4. Be Aware of Potential Spousal Benefits From Social Security</h2> <p>If your previous marriage ended on very unfriendly terms, you and your spouse may feel that you don't want to leave a penny to each other. Regardless of how you feel, the Social Security Administration (SSA) may still legally entitle your ex-spouse some benefits under certain circumstances.</p> <p>If your former marriage lasted at least 10 years, your previous spouse can receive benefits on your SSA's record as long as he or she:</p> <ul> <li><a href="https://www.ssa.gov/planners/retire/divspouse.html" target="_blank">Remains unmarried</a>;</li> <li>Is age 62 or older;</li> <li>Is entitled to Social Security retirement or disability benefits; and</li> <li>Has an entitled benefit based on his or her own work that is less than the one that he or she would receive based on your work history.</li> </ul> <p>Even when you have remarried, your ex-spouse could receive a check from the SSA based on your record. This is a conversation that you should have with your new partner before you tie the knot so that you're both on the same financial page.</p> <h2>5. Set Up Mail Forwarding With USPS</h2> <p>Depending on how long ago you got divorced and whether or not you kept the same home from your previous marriage, you could still receive some correspondence addressed to your ex's name. While getting a letter from an aunt isn't a big deal, receiving a large monetary gift, important bill, or legal notice could create discussions that you don't want to have.</p> <p>To avoid such issues, spend $1 to set up <a href="https://www.usps.com/manage/forward.htm" target="_blank">mail forward</a> with the USPS so that all correspondence under your married name (and maiden name, if applicable) is forwarded to a new address. Chances are that your ex-spouse already did this, but it's better to be safe than sorry. This service costs $1 per name, so you would need to spend $1 for a married name, and another $1 for a maiden name.</p> <h2>6. Put Your Debts on the Table</h2> <p>Transparency is a pillar in any relationship. No matter how large your financial obligations may be, your new spouse will truly appreciate finding out now rather than when you're struggling to cover monthly bills, applying for a mortgage, or trying to finance a new car.</p> <p>Sit down with your soon-to-be spouse and go through your debt payments, such as student loans, credit card balances, mortgages, car loans, and installment plans. Going over your debts will allow you to have an idea of where the money is going every month, start talking about the potential commingling of finances, and be aware of each other's liabilities. (See also: <a href="http://www.wisebread.com/what-happens-to-your-debt-after-you-die?ref=seealso" target="_blank">What Happens to Your Debt After You Die?</a>)</p> <h2>7. Disclose Any Alimony and Child Care Payments</h2> <p>Whether you're the issuer or recipient of court-mandated spousal support, spousal maintenance, or child care, make sure to disclose those moneys to your spouse and the corresponding expenses that they cover. Failing to help cover certain expenses while making large payments somewhere else could cause tensions between you and your new partner when not previously discussed.</p> <p>Be upfront with your partner and tell the whole story. It helps you establish clear expectations about your joint financial future.</p> <h2>8. Evaluate a Prenuptial</h2> <p>Depending on your own financial plans, you may want to fully combine your finances &mdash; or not at all. For example, you may have accumulated some serious joint credit card debts from your previous marriage and you wouldn't want to transfer that responsibility to your new spouse or start a new string of similar debts. Evaluating a prenup before tying the knot is a necessary conversation for any couple with large differences in individual net worths, levels of retirement savings, and stakes in businesses. (See also: <a href="http://www.wisebread.com/5-ways-to-protect-your-business-during-a-divorce?ref=seealso" target="_blank">5 Ways to Protect Your Business During a Divorce</a>)</p> <p>While thinking that your second marriage may fail like your first one did may sound a bit pessimistic, the reality is that it does happen. In 2013, four out of 10 new marriages <a href="http://www.pewsocialtrends.org/2014/11/14/four-in-ten-couples-are-saying-i-do-again/" target="_blank">involved remarriage</a>.</p> <p>Consult with your financial adviser, lawyer, or accountant about your unique financial situation and determine whether or not you need to present a prenup agreement to your soon-to-be spouse. Keep a positive attitude, and remember that this is a time for celebration. Once you've done your homework, you'll be able to fully enjoy your marriage without any financial worries holding you back.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/damian-davila">Damian Davila</a> of <a href="http://www.wisebread.com/8-money-moves-to-make-before-you-remarry">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-3"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-estate-planning-questions-everyone-should-ask">5 Estate Planning Questions Everyone Should Ask</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-money-moves-youre-never-too-old-to-make">9 Money Moves You&#039;re Never Too Old to Make</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/should-you-set-up-a-trust-for-your-child">Should You Set Up a Trust for Your Child?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/dont-make-these-5-common-mistakes-when-writing-a-will">Don&#039;t Make These 5 Common Mistakes When Writing a Will</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/are-you-putting-off-these-9-adult-money-moves">Are You Putting Off These 9 Adult Money Moves?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance beneficiaries dependents estate planning money moves prenup remarried retirement Second Marriage social security trusts will Wed, 15 Mar 2017 11:00:15 +0000 Damian Davila 1906387 at http://www.wisebread.com 8 Reasons You Should File Your Taxes as Soon as Possible http://www.wisebread.com/8-reasons-you-should-file-your-taxes-as-soon-as-possible <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/8-reasons-you-should-file-your-taxes-as-soon-as-possible" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-610688960.jpg" alt="Learning reasons you should file taxes as soon as possible" title="" class="imagecache imagecache-250w" width="250" height="141" /></a> </div> </div> </div> <p>What do we want? A tax refund! When do we want it? Now!</p> <p>Here are eight reasons you should pick up the pace on your tax preparation and file well before this year's deadline.</p> <h2>1. You'll Get Your Refund Faster</h2> <p>Simple logic, folks: The sooner you file your returns, the faster you'll receive a refund (if you're owed one). The IRS says it issues nine out of 10 refunds within 21 days (sometimes less) with e-file and direct deposit. Use that money to get a head start on spring and summer home improvements, pay off debt sooner than later, or bulk up your emergency savings account.</p> <h2>2. Filing Online Is Easy</h2> <p>If your taxes aren't complicated &mdash; and they shouldn't be if you don't have multiple sources of income &mdash; filing online should be a walk in the park. Using <a href="http://www.tkqlhce.com/click-2822544-12747133" target="_blank">TurboTax online</a>, for example, is almost effortless, and it will help you submit an accurate return while also saving you money. Best of all, you can do it on your own time and in the comfort of your own home.</p> <h2>3. You'll Have Extra Time to Pay the Taxes You May Owe<strong> </strong></h2> <p>Filing early doesn't mean you have to pay the taxes you may owe immediately. In fact, it'll give you a decent window to figure out how to cover that cost, especially if you don't readily have it available. If you submit your tax return in February, for example, you still have until the April deadline to come up with payment.</p> <h2>4. Your Accountant Can Spend More Quality Time on Your Return<strong> </strong></h2> <p>I'm an entrepreneur, and I own a business that requires a decent amount of accounting at tax time. Admittedly, this is not something I want to handle on my own, which is why I have a CPA. I usually schedule my annual meeting with him mid- to late-February &mdash; before he's bombarded with his other clients' returns &mdash; so he can give mine the TLC it needs. If you have a lot of components to your own taxes, this is definitely a strategy to consider. You don't want to lose out on refund money because your accountant was in a hurry.</p> <h2>5. You Can Spend More Quality Time on Your Return</h2> <p>Even if you're handling your taxes on your own, it's still wise to give yourself ample time to prepare. A lot of information goes onto a return, and you need to ensure that everything is correct. Tax mistakes can be costly, but they can also be avoided if you plan ahead instead of trying to beat the clock at the last minute. Triple-check your numbers and personal information for accuracy. (See also: <a href="http://www.wisebread.com/5-common-tax-mistakes-we-need-to-stop-making?ref=seealso" target="_blank">5 Common Tax Mistakes We Need to Stop Making</a>)</p> <h2>6. You'll Reduce the Chance of Identity Theft</h2> <p>Identity theft is a major concern with regards to your finances, and even your tax return is at risk. Scammers can file fraudulent returns in unsuspecting taxpayers' names, but the chances of that happening are reduced the earlier you file. (See also: <a href="http://www.wisebread.com/beware-these-6-phony-irs-calls-and-emails?ref=seealso" target="_blank">Beware These 6 Phony IRS Calls and Emails</a>)</p> <h2>7. It'll Make Your Home-Buying Process Easier</h2> <p>I've bought several homes over the years, and it's very stressful. For one, the mortgage company needs every last piece of your financial information that they can get their hands on &mdash; and then some. Your homebuying process will go much smoother this time of year if you've already filed your taxes.</p> <h2>8. You'll Have Time to Help Advise Your Working Dependent Kids<strong> </strong></h2> <p>Your working children can also make mistakes on their own returns, filing as independents when they're clearly still dependents. Have a discussion with your kids about this designation &mdash; especially important to remember if they're away at college and filing on their own &mdash; so you don't miss out on deductions that <em>you </em>deserve.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/mikey-rox">Mikey Rox</a> of <a href="http://www.wisebread.com/8-reasons-you-should-file-your-taxes-as-soon-as-possible">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-4"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-tax-scams-you-should-know-about-for-2018">5 Tax Scams You Should Know About for 2018</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/get-your-money-sooner-by-starting-2016-tax-prep-now">Get Your Money Sooner by Starting 2016 Tax Prep Now</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-7-most-common-tax-questions-for-beginners-answered">The 7 Most Common Tax Questions for Beginners, Answered</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-tax-return-mistakes-even-smart-people-make">8 Tax Return Mistakes Even Smart People Make</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/what-to-do-when-your-tax-preparer-makes-a-mistake">What to Do When Your Tax Preparer Makes a Mistake</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Taxes accounting dependents e-file home buying identity theft IRS kids refunds tax returns Tue, 28 Feb 2017 10:00:21 +0000 Mikey Rox 1897587 at http://www.wisebread.com 5 Money Strategies for the Sandwich Generation http://www.wisebread.com/5-money-strategies-for-the-sandwich-generation <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-money-strategies-for-the-sandwich-generation" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-77931648.jpg" alt="Sandwich generation learning smart money strategies" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Generation X is commonly called the sandwich generation for two reasons. First, they are sandwiched between the Millennials and the Baby Boomers, both groups that seem to hog media coverage &mdash; and marketing budgets. More importantly, many Gen Xers face the modern problem of caring for their elderly parents while still also caring for their own children. (See also: <a href="http://www.wisebread.com/6-ways-the-sandwich-generation-can-get-ahead?ref=seealso" target="_blank">6 Ways the Sandwich Generation Can Get Ahead</a>)</p> <p>Being in the sandwich generation can be stressful and financially draining. Here are five strategies to stay financially afloat if you're caring for others.</p> <h2>1. Talk Openly About Finances</h2> <p>Whether your elderly parents live with you or not, it is important to know where they stand financially. For families that didn't grow up talking about money, this might feel awkward. However, it is important for you to be prepared to assume financial responsibility if anything were to happen.</p> <p>Of course, it is best to have this talk with a certified financial planner and estate attorney, as well. There are a lot of financial matters to discuss.</p> <ul> <li>Who has <a href="http://www.wisebread.com/what-is-power-of-attorney" target="_blank">power of attorney</a>?<br /> &nbsp;</li> <li>Where will the funds for your parents' care come from?<br /> &nbsp;</li> <li>Should your parents be receiving veterans' benefits or Medicaid assistance?<br /> &nbsp;</li> <li>Do your parents have any investments, and are they making the best rate of return on them?<br /> &nbsp;</li> <li>Do your parents have <a href="http://www.wisebread.com/is-long-term-care-insurance-worth-it" target="_blank">long-term care insurance</a> or enough retirement savings to cover care costs?</li> </ul> <h2>2. Utilize Special Savings Accounts</h2> <p>Money will be tight when you are caring for your parents and children at the same time, but don't neglect saving accounts. Contribute as much as you can to your retirement account and even look into a 529 plan for future college costs.</p> <p>Many employers offer flexible spending accounts (FSAs), which allow you to contribute up to $2,500 into a health account and dependent care account. If both you and your spouse are employed, then you might both be eligible to contribute $2,500, for a combined $5,000. This money can be used for your own medical costs, your kids' medical costs and care needs, and your elderly parents' medical and care needs, if they are declared as your dependents.</p> <p>An elderly parent can be financially taxing, but don't let that cause you to avoid saving for your retirement or your child's college. You don't want to be stuck in a financial black hole once your elderly loved one is gone.</p> <h2>3. Get Tax Benefits</h2> <p>If you do declare a parent as a dependent, make sure you get all of the possible tax benefits. Talk with a tax specialist about getting special deductions for medical home improvements, medical expenses, and care expenses.</p> <h2>4. Prioritize the Budget</h2> <p>Take a look at your budget and see what can be cut or put on hold. You might have to move to a more affordable area or forgo family vacations for a few years. Being in the sandwich generation will take sacrifice, but if you can survive this time without incurring debt, then you will stay financially afloat.</p> <p>If you need extra money, try to sell unwanted or unneeded items. Every little bit helps. If either your child or parent is capable of earning some money with a part-time position, this can help too. A teenager can get a job and take over their cellphone or car payments, and your parent can help contribute to the grocery budget. Even if this only adds up to an extra $100 a month, it can still create a little bit of breathing room.</p> <h2>5. Ask Other Family Members for Help</h2> <p>An aging parent shouldn't fall on the shoulders of just one person. Siblings and other able family members should help financially and physically. Have a serious talk with your other siblings and family members about contributing. If they cannot contribute financially, then they should be able to watch or care for an elderly parent at least a few hours a month to give you a break.</p> <p>Don't try to balance the weight of aging parents and children alone. Start by talking with a financial adviser, who can help put your finances in order and point you to free resources. It can also help to seek advice from peers who have gone through or are going through the same situation.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/ashley-eneriz">Ashley Eneriz</a> of <a href="http://www.wisebread.com/5-money-strategies-for-the-sandwich-generation">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-ways-the-sandwich-generation-can-get-ahead">6 Ways the Sandwich Generation Can Get Ahead</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-talk-to-mom-and-dad-about-their-money">How to Talk to Mom and Dad About Their Money</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-save-for-retirement-while-caring-for-kids-and-parents">How to Save for Retirement While Caring for Kids and Parents</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-simple-acts-of-self-care-for-the-sandwich-generation">9 Simple Acts of Self-Care for the Sandwich Generation</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-tax-mistakes-new-parents-make">4 Tax Mistakes New Parents Make</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Family aging parents baby boomers children dependents generation x household millennials money advice sandwich generation Mon, 13 Feb 2017 11:00:07 +0000 Ashley Eneriz 1884961 at http://www.wisebread.com Why Your Group Life Insurance Is Not Enough http://www.wisebread.com/why-your-group-life-insurance-is-not-enough <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/why-your-group-life-insurance-is-not-enough" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-516008468.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>You've done it &mdash; you've finally landed a job that offers amazing benefits such as free life insurance. While employer-offered life insurance (also called group life insurance) is worthwhile, it shouldn't be your only source of insurance.</p> <h2>How Do I Get Group Life Insurance?</h2> <p>Many employers will offer a free level of life insurance for employees. Depending on your place of work, this can cover anywhere from $25,000 to your base pay. Since this is a free option, all employees should sign up for the benefit. It's free money if something were to happen to you. However, don't let that be your only coverage. (See also: <a href="http://www.wisebread.com/5-reasons-why-life-insurance-isnt-just-for-old-people?Ref=seealso" target="_blank">5 Reasons Why Life Insurance Isn't Just for Old People</a>)</p> <h2>Is Group Life Insurance Enough?</h2> <p>If you are single, a $25K &mdash;$50K check sounds like a nice chunk of change for your parents or other loved ones you leave behind. However, in most cases &mdash; yes, even for single people &mdash; it's simply not enough. Final expenses can be greater than you think. Funerals can range in price, but a recent survey by the National Funeral Directors Association found a median price of $7K.</p> <p>Furthermore, if your private student loans, mortgage, or car loans have a co-signer, then that co-signer will be stuck with your debt after you die. To avoid this, you can either remove co-signers from loans through refinancing, or purchase term life insurance that will cover the cost of your remaining debt.</p> <p>For healthy, young individuals that do not need much coverage, term life insurance rates are very affordable, with some policies costing less than $20 a month. But for individuals who are married and/or have children, you'll likely need more coverage, To calculate how much coverage you need, add up the following:</p> <ul> <li>Funeral cost;<br /> &nbsp;</li> <li>Cost of paying off any debt not forgiven upon death;<br /> &nbsp;</li> <li>Time you want your loved ones to have income and not worry about work &mdash; for example, even if your spouse works full-time in a successful career, they might need several months to grieve your loss;<br /> &nbsp;</li> <li>Future college costs or other child-rearing expenses.</li> </ul> <p>For many families, the total will be around seven to 10 times your annual paycheck.</p> <h2>Can I Get Supplemental Life Insurance Through an Employer?</h2> <p>Many employers will offer supplemental life insurance for purchase. Since you are purchasing the policy through your employer, it could be slightly cheaper than purchasing individual life insurance. However, your company technically owns the policy. Therefore, if you quit or are fired, your group life is gone, too. Some employers will give you the option to continue carrying the policy after you leave, but it will be at a higher price.</p> <h2>Individual Life Insurance Versus Group Life Insurance</h2> <p>While signing up for free group life insurance is a must, it is much better to sign up for supplemental term life insurance individually. The policy will stay with you even if you move jobs. Furthermore, you can lock in a low premium now when you are still young and healthy.</p> <p>Say you were to secure a low-cost policy with your employer's group life insurance at the young age of 25. Your rates should be quite low. Now fast forward eight years. You want to quit your job and have your own term life insurance policy. You will still get a great rate because you are under 40, but your monthly premium will be more at 33 than it was at 25.</p> <p>To sum it all up, cash in on your employer's free group life insurance perk, but also secure term life insurance when you are still young. This will allow you to lock in the best rate possible.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/ashley-eneriz">Ashley Eneriz</a> of <a href="http://www.wisebread.com/why-your-group-life-insurance-is-not-enough">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-5"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/term-vs-whole-life-insurance-heres-how-to-choose">Term vs Whole Life Insurance: Here&#039;s How to Choose</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/when-dropping-your-life-insurance-is-the-right-decision">When Dropping Your Life Insurance Is the Right Decision</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/when-should-single-people-get-life-insurance">When Should Single People Get Life Insurance?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-estate-planning-questions-everyone-should-ask">5 Estate Planning Questions Everyone Should Ask</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-common-medicare-myths-debunked">5 Common Medicare Myths, Debunked</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Insurance beneficiaries benefits coverage dependents employers life insurance premiums Tue, 31 Jan 2017 11:00:10 +0000 Ashley Eneriz 1877983 at http://www.wisebread.com Term vs Whole Life Insurance: Here's How to Choose http://www.wisebread.com/term-vs-whole-life-insurance-heres-how-to-choose <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/term-vs-whole-life-insurance-heres-how-to-choose" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/child_father_hugging_88776971.jpg" alt="Family choosing between whole and term life insurance" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>You know you need life insurance. It's a way to provide financial protection for your spouse, children, or other dependents should you unexpectedly die. But knowing that life insurance is a smart move and knowing which type of policy to take out are two different things.</p> <p>Studying up on life insurance isn't fun. Fortunately, most consumers choose between just two different types of life insurance policies &mdash; term and permanent. And if they choose permanent life insurance, they usually opt for what is known as whole life insurance.</p> <p>What's the difference between the two? And which type of insurance is best for you? Here's a crash course in the difference between term and whole life insurance.</p> <h2>Term Life Insurance &mdash; The Cheaper Choice</h2> <p>For most people, term life insurance is the smart financial choice. That's because this insurance provides solid financial protection for loved ones, while also costing far less than a whole life insurance policy.</p> <p>As the name suggests, term life insurance remains in effect for a certain period &mdash; or term &mdash; of time. You can choose the term, usually anywhere from one to 30 years. The Insurance Information Institute says that most people choose a 20-year term.</p> <p>When taking out a term life policy, you'll provide a list of beneficiaries, such as your children or spouse. Your term life insurance will pay out your death benefit to your listed beneficiaries if you die &mdash; and your death meets the requirements spelled out in your policy during this term (suicide cancels a payout, for example). After the term ends, the policy ends, too, unless you pay to extend it. Your annual premium will usually remain the same during the term.</p> <p>If you take out a term life insurance policy, you'll have to decide how long you want your policy to remain active. Most people choose a term that will last until their dependents no longer need their financial assistance. They might take out a term policy that lasts until their children will have left their home and started their own careers, for instance. Others might choose a policy that ends only after they know they will have paid off their home and built up a significant amount of savings.</p> <p>How much you pay for term life insurance depends on many factors, including your age, health, the amount of coverage you want, and the length of your policy. TrustedChoice.com, a website that helps consumers find independent insurance agents, says that a healthy 35-year-old male nonsmoker who takes out a 20-year term life insurance policy with a value of $500,000 will pay an average of about $35 a month for a policy. A 35-year-old healthy female nonsmoker would pay about $61 a month for $1 million worth of life insurance with a 20-year term.</p> <p>That comes out to $420 a year for the male and $732 for the female taking out the more valuable policy.</p> <h2>Whole Life Insurance</h2> <p>Whole life insurance is a more complicated product. That's because it is really two different financial products in one. It provides life insurance benefits like a term life policy, but also comes with an investment component known as a cash value.</p> <p>Part of every payment you make goes toward growing this cash value on a tax-deferred basis, meaning that you won't pay taxes on any of these cash gains while they are growing. You can borrow against your life insurance account or surrender it at any time to take the cash that has grown in it.</p> <p>You will, though, have to repay any loans you make against your whole life policy, with interest.</p> <p>Whole life also lasts, as its name suggests, for your entire life. No matter when you die, a whole life policy will pay out its death benefits to your listed beneficiaries, as long as the cause of your death is covered under the policy. Your premiums will remain the same until you either cancel the policy or you die.</p> <p>Because it comes with an investment component and lasts for your entire life, whole life insurance is considerably more expensive. TrustedChoice.com says that a healthy 35-year-old male who does not smoke would pay an average of $98.50 a month or $1,119 a year for a whole life insurance policy with death benefits valued at $250,000. A 35-year-old healthy female who doesn't smoke would pay an average of $82 a month or $960 a year for the same policy.</p> <h2>Which Is Right for You?</h2> <p>Which type of insurance is right for you? If you simply want to provide protection for your loved ones until they are financially independent, a term life insurance policy is usually the better choice thanks to their lower costs.</p> <p>If you want a life insurance policy that also generates cash value, then you might consider the whole life version. Whole life might make sense, too, if you need to provide financial protection for a loved one who will be dependent on you for your entire life, such as a child with special needs.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/term-vs-whole-life-insurance-heres-how-to-choose">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-5"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/when-should-single-people-get-life-insurance">When Should Single People Get Life Insurance?</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/why-your-group-life-insurance-is-not-enough">Why Your Group Life Insurance Is Not Enough</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/when-dropping-your-life-insurance-is-the-right-decision">When Dropping Your Life Insurance Is the Right Decision</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-estate-planning-questions-everyone-should-ask">5 Estate Planning Questions Everyone Should Ask</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-reasons-why-life-insurance-isnt-just-for-old-people">5 Reasons Why Life Insurance Isn&#039;t Just for Old People</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Insurance beneficiaries cash value dependents family life insurance payouts term whole life Thu, 03 Nov 2016 10:30:09 +0000 Dan Rafter 1825853 at http://www.wisebread.com 6 Smart Ways to Boost Your Social Security Payout Before Retirement http://www.wisebread.com/6-smart-ways-to-boost-your-social-security-payout-before-retirement <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-smart-ways-to-boost-your-social-security-payout-before-retirement" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/old_couple_retirement_78209735.jpg" alt="Couple boosting their social security payout before retirement" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>According to the Employee Benefit Research Institute, <a href="https://www.ebri.org/pdf/briefspdf/EBRI_IB_422.Mar16.RCS.pdf">84% of U.S. workers</a> expect their Social Security benefit to be a significant source income during retirement. So, let's plan ahead with these six smart ways to boost that monthly Social Security check before retirement:</p> <h2>1. Check Reported Earnings on Your Social Security Statements</h2> <p>In September 2014, the Social Security Administration (SSA) began mailing Social Security Statements to workers at ages 25, 30, 35, 40, 45, 50, 55, and 60 and over, who aren't yet receiving Social Security benefits and don't have a <em>my Social Security</em> account. You should receive those statements about three months before your birthday at each one of those ages.</p> <p>Once you receive one, check your reported earnings for each year to make sure they match your W-2 forms. The SSA uses your average earnings over your lifetime to calculate your benefit amount, so any errors on reported earnings may alter the benefit to which you're entitled. Since you may have many employers during your lifetime, you're the only person who can look at your earnings history and know whether it's complete and correct.</p> <p>If any earnings before the previous year are missing or shown incorrectly, contact the SSA right away at 1-800-772-1213 (7 a.m. to 7 p.m. on your local time). Have your W-2 or tax return for those years available when you call.</p> <h2>2. Sign Up for a my Social Security Account</h2> <p>There's no need to wait five years before getting your next Social Security Statement. By creating you're my Social Security account at <a href="http://www.ssa.gov/myaccount">www.ssa.gov/myaccount</a>, you'll be able to check your reported earnings once a year to verify that those posted amounts are correct.</p> <p>Additionally, you'll receive updated estimates of your future retirement, disability, and survivors benefits. If you meet certain requirements, you'll also be able to request a replacement Social Security card through the my Social Security online portal.</p> <h2>3. Reach Full Retirement Age</h2> <p>When you have earned the necessary 40 credits (individuals with disabilities, recipients of survivor benefits, and some minors may need fewer credits) to qualify for retirement benefits, you can start receiving those benefits as early as age 62. Whether you receive a digital or paper copy of your Social Security statement, you'll receive an estimated benefit of your retirement benefits at age 62.</p> <p>You'll quickly realize that the estimated benefit at age 62 is much lower than the one at your full retirement age. For example, if you were born between 1943 and 1954, your full retirement age would be 66. If you were to start getting retirement benefits at age 62, they would be <a href="https://www.ssa.gov/planners/retire/1943.html">reduced to 75%</a> of what they would be four years later. For every month that you delay retirement past age 62, you would gain an additional 0.4% in retirement benefits until you reach your full retirement age. Depending on your birth year, your full retirement age ranges from <a href="https://www.ssa.gov/planners/retire/retirechart.html">65 to 67</a>.</p> <h2>4. Obtain Delayed Retirement Credits</h2> <p>According to estimates from the SSA, about <a href="https://www.ssa.gov/planners/lifeexpectancy.html">one out of every four</a> 65-year-olds today will live past age 90, and one out of 10 will live past age 95. If you have a family history of longevity, consider delaying retirement until age 70.</p> <p>Individuals born 1943 or later receive an extra <a href="https://www.ssa.gov/planners/retire/delayret.html">2/3 of 1% increase</a> on their retirement benefits for every month that they delay retirement past full retirement age. If your full retirement age were 67, you would increase your retirement benefit to 132% by waiting until age 70. You can only gain delayed retirement credits until age 70.</p> <h2>5. Evaluate Spousal Benefits</h2> <p>Spouses can claim retirement benefits based on their own earnings record or receive up to 50% of the higher earner's benefit, whichever is higher. For example, if your own retirement benefit and your spouse's were $600 and $1,800, respectively, you would receive $900 (50% of $1,800).</p> <p>However, taking the spousal benefit as early as age 62 reduces your payout. A spousal benefit is reduced 25/36 of 1% for each month before full retirement age, up to 36 months. If the number of months exceeds 36, then the benefit is further reduced 5/12 of 1% per month. For those born 1960 or later, a $900 spousal benefit would be reduced to $585 when taking it at age 62.</p> <p>If you're divorced from a marriage <a href="https://www.ssa.gov/planners/retire/divspouse.html">lasting 10 years or longer</a>, remain unmarried, and have a retirement benefit smaller than the one you would receive from your ex-spouse, then you can receive spousal benefits on your ex-spouse's record even if he or she has remarried. However, you'll only be able to keep collecting benefits if you keep single. To learn more details about spousal benefits for divorced spouses, consult the SSA website.</p> <h2>6. Plan Ahead With Your Dependents</h2> <p>Talking about relationship updates later on in life, keep in mind that you can receive additional Social Security payments when you have dependent children <a href="https://www.ssa.gov/planners/retire/yourchildren.html">under age 19</a> living with you during retirement.</p> <p>As long as your biological child, adopted child, stepchild, or dependent grandchild is unmarried and under age 18, then he or she can receive up to one half of your monthly retirement benefit. The benefit can extend until graduation date or two months after the 19th birthday of a dependent who is a full-time student (no higher than grade 12), whichever is earlier.</p> <p>While each one of your qualifying dependent children can receive a benefit, generally the total amount you and your family can receive is about <a href="https://www.ssa.gov/planners/retire/yourchildren.html">150% to 180%</a> of your full retirement benefit. Depending on your child's age, you may find it advantageous to retire earlier than you originally planned to take advantage of a higher total family benefit.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" data-pin-save="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F6-smart-ways-to-boost-your-social-security-payout-before-retirement&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F6%2520Smart%2520Ways%2520to%2520Boost%2520Your%2520Social%2520Security%2520Payout%2520Before%2520Retirement.jpg&amp;description=6%20Smart%20Ways%20to%20Boost%20Your%20Social%20Security%20Payout%20Before%20Retirement"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/6%20Smart%20Ways%20to%20Boost%20Your%20Social%20Security%20Payout%20Before%20Retirement.jpg" alt="6 Smart Ways to Boost Your Social Security Payout Before Retirement" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/damian-davila">Damian Davila</a> of <a href="http://www.wisebread.com/6-smart-ways-to-boost-your-social-security-payout-before-retirement">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-4"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-sobering-facts-about-social-security-you-shouldnt-panic-over">5 Sobering Facts About Social Security You Shouldn&#039;t Panic Over</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-ways-to-find-income-while-waiting-for-full-retirement-age">4 Ways to Find Income While Waiting for Full Retirement Age</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/stop-falling-for-these-6-social-security-myths">Stop Falling for These 6 Social Security Myths</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/what-you-need-to-know-about-working-while-collecting-social-security">What You Need to Know About Working While Collecting Social Security</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-questions-to-ask-before-you-start-claiming-your-social-security-benefits">5 Questions to Ask Before You Start Claiming Your Social Security Benefits</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement benefits dependents full retirement age marriage payout social security spouses ssa Wed, 12 Oct 2016 09:00:06 +0000 Damian Davila 1810488 at http://www.wisebread.com Can Your Spouse be a Dependent on Your Taxes? http://www.wisebread.com/can-your-spouse-be-a-dependent-on-your-taxes <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/can-your-spouse-be-a-dependent-on-your-taxes" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/couple_calculator_bills_17400550.jpg" alt="Couple learning if a spouse can be added as a dependent" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>It's a common scenario: One person in a relationship brings home a much higher salary than the other. For couples in this situation, the higher earner typically handles the majority of the expenses.</p> <p>To lower their tax burden, some may want to claim their lower-earning spouse as a dependent. In other situations, the earner's spouse is disabled and unable to contribute to the family's income. However, while you might think that labeling a spouse as a dependent is a smart decision, it's actually not allowed by the IRS.</p> <h2>What the IRS Says About Dependent Spouses</h2> <p>According to the <a href="http://www.irs.gov/pub/irs-pdf/p17.pdf">IRS Publication 17</a>, your spouse can never be claimed as a dependent. Other people, such as siblings, children, or other relatives can be dependents, but no matter the circumstance, your spouse cannot.</p> <p>In the IRS' eyes, a dependent is defined as a child or qualifying relative. The person does not have to be related by blood &mdash; they just had to live with you for the year and not have gross income.</p> <h2>Spousal Exemptions</h2> <p>While a spouse cannot be a dependent, you may be able to <a href="https://www.irs.gov/uac/can-i-claim-my-personal-and-or-spousal-exemption">claim an exemption</a> for your spouse, thereby lowering your tax burden. You can go this route if you are married, and your partner has no gross income to report.</p> <p>If your spouse is physically challenged, you may be able to claim credit for expenses related to the care of your spouse. This option would be a possibility if you needed to hire help to care for your spouse so you could go to work or search for employment.</p> <h2>Marriage and Taxes</h2> <p>To minimize how much you owe on your taxes, it often makes the most sense to file jointly, rather than separately. To encourage couples to file together, the IRS gives joint filers some of the largest standard deductions, allowing them to deduct a big amount from their taxable income.</p> <p>Joint filers can typically claim two exemptions and more easily qualify for other tax credits, including:</p> <ul> <li>Earned Income Tax Credit</li> <li>Child and Dependent Care Tax Credit</li> <li>American Opportunity and Lifetime Learning Education Credit</li> </ul> <p>If you file jointly, there is also a higher threshold for taxes and deductions, meaning you can qualify for more credit and tax breaks for a higher income than if you filed separately.</p> <h2>When It Makes Sense to File Separately</h2> <p>Filing separately only makes sense in very specific circumstances, such as in the case of large out-of-pocket medical expenses. Because the IRS only allows you to deduct 10% of your adjusted gross income (AGI), filing separately can help you save more money.</p> <p>While you may hear some professionals recommend claiming your spouse as a dependent, it is not permissible by the IRS. Instead, you can claim your partner as a personal exemption in particular circumstances. To lower your tax burden, consult with a tax professional to make sure filing jointly makes the most financial sense for your situation and get all of the deductions and tax breaks you are entitled to.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/kat-tretina">Kat Tretina</a> of <a href="http://www.wisebread.com/can-your-spouse-be-a-dependent-on-your-taxes">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-6"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/heres-how-your-taxes-will-change-after-marriage">Here&#039;s How Your Taxes Will Change After Marriage</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/heres-how-your-taxes-will-change-after-you-have-a-kid">Here&#039;s How Your Taxes Will Change After You Have a Kid</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-clever-tax-shelters-anyone-can-use">5 Clever Tax Shelters Anyone Can Use</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-ways-student-loans-impact-your-taxes">4 Ways Student Loans Impact Your Taxes</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-smart-ways-to-boost-your-social-security-payout-before-retirement">6 Smart Ways to Boost Your Social Security Payout Before Retirement</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Taxes deductions dependents exemptions filing jointly filing separately marriage spouses tax credits Fri, 23 Sep 2016 10:00:07 +0000 Kat Tretina 1796981 at http://www.wisebread.com 7 Money Moves to Make as Soon as the Kids Move Out http://www.wisebread.com/7-money-moves-to-make-as-soon-as-the-kids-move-out <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/7-money-moves-to-make-as-soon-as-the-kids-move-out" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/friends_carrying_boxes_27414930.jpg" alt="Parents making money moves after kids move out" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Have your kids recently flown the coop? Huzzah &mdash; it's time to celebrate, empty nester! Shed a few tears so you don't look completely insensitive, but then get down to business. You've put in 18 years (or, God help you, even more), and now it's time to concentrate on you and your future. Thus, here are six money moves you should make as soon as your little kids strike out on their own.</p> <h2>1. Cut Your Children Off as Financial Dependents</h2> <p>Cutting your kids off the financial gravy train doesn't mean you can't help them out when they're in a tight spot, but they're adults now and they need to start acting like it. Start handing over the bills to their cellphones, car insurance, and whatever other payments you're taking care of on their behalf.</p> <p>Similarly, this also is the time to start reversing the mindset that they can call Mom and Dad whenever they need money. If you've facilitated this kind of reliance in your children, it's time to help them learn to stand on their own.</p> <h2>2. Increase Contributions to Your Retirement Fund</h2> <p>Now that you've freed up a good chunk of your disposable income, you can start concentrating on yourself again &mdash; and right now that means retirement.</p> <p>&quot;Once you have an empty nest, it's time to make sure you're on track for your retirement,&quot; says retirement-savings expert Patty Cathey. &quot;I recommend putting away 15% of your salary into a 401K or IRA. If you can put more away &mdash; do it. You may have some ground to make up if you've been prioritizing you kids over retirement.&quot;</p> <p>CFP Scott Hanson, who owns a financial advising firm in California, offers an additional tip on how to play catch-up on <a href="http://www.wisebread.com/using-your-roth-ira-as-an-emergency-fund-ever-a-good-idea" target="_blank">your retirement savings</a>.</p> <p>&quot;You can contribute as much as $24,000 into a 401K plan if you are age 50 or older. Too few of us ever reach that milestone, but from my experience, those that have contributed the most to their employer's 401K or 403B are in the best financial position at retirement time.&quot;</p> <h2>3. Make Improvements to Increase the Value of Your Home</h2> <p>If your home has been neglected for a few years (or more) because you've been paying for your high schooler's academic, athletic, and artistic needs (and then exponentially more during college), now's the time to start directing some of that money back into your tangible investments. Fix what needs fixing and give the joint a cosmetic face-lift where necessary to increase its value. Just be careful that you're not making expensive improvements that won't pay off in the long run. Concentrate on what's key to buyers and leave the rest for them.</p> <h2>4. Develop a Strategy to Pay Off Your Home</h2> <p>If you're nearing retirement age, chances are you're well into paying off your mortgage, if not approaching total payoff. You'll put yourself in the best financial position if you can develop a strategy to eliminate that mortgage debt altogether.</p> <p>&quot;Calculate how much you should pay each month so that your home is paid off by the time you reach retirement age,&quot; Hanson advises. &quot;For example, if you are age 52 and want to retire at age 65, you'll want to adjust your payments so that your home is paid off in 13 years. There are many online calculators that can help you figure this out.&quot;</p> <h2>5. Offer Your Kid's Room to a Rent-Paying Boarder</h2> <p>You'll find help in paying off your mortgage faster or putting more money toward your retirement plan if you can monetize the extra space in your house. If your kid doesn't have any plans to return (or you've changed the locks so they can't &mdash; and high-five for that!), consider turning their bedroom into a short or long-term rental.</p> <p>There are pros and cons to both situations.</p> <p>On the short-term side, there's potential to make much more money per month if you live in a well-traveled area, and you have the pleasure of welcoming new guests on a regular basis (if you like that sort of thing), while avoiding the annoyance of a full-time tenant. If you prefer a more long-term situation, you can count on steady income, though it may net less than a short-term setup, and you won't have to continually greet new guests and clean up after them.</p> <p>Either way, my philosophy is that if your empty room isn't making you money, it's costing you money &mdash; and when you look at it that way, it's easy to discern which is the better solution for your savings goals.</p> <h2>6. Consider Downsizing to a Smaller Home</h2> <p>If you're not keen on renting your extra room(s) to short-term vacationers or a long-term tenant, consider downsizing altogether if you have more space than you really need. At this stage, there's no point in paying for a three or four-bedroom mortgage when you may be able to buy a new one-bedroom condo outright with the money you make from the sale of your existing home. Cutting your mortgage way down will help also you put the excess savings toward retirement.</p> <p>&quot;You'll not only save money on the mortgage, but you can save on utility bills, maintenance costs, and taxes,&quot; Cathey adds. &quot;Not to mention, you may be able to ease some of the home maintenance burdens, freeing up time spent on cleaning, lawn care, and shoveling.&quot;</p> <h2>7. Look at Other Areas in Your Life That You Can Downsize</h2> <p>Driving a gas guzzler? Look into an inexpensive, more fuel-efficient vehicle. Keeping services, memberships, and subscriptions that you don't really use? Cancel them. Energy costs eating up a good portion of your budget? Research ways to cut back and go a little greener. There are likely plenty of areas you can shave money off your bills here and there by reducing what you're using. The amount may seem insignificant singularly, but combined they'll add up fast.</p> <p><em>Did you kids recently move out? What have you done to put more money back in your pocket instead of theirs? Let's discuss in the comments below.</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/mikey-rox">Mikey Rox</a> of <a href="http://www.wisebread.com/7-money-moves-to-make-as-soon-as-the-kids-move-out">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-7"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-help-your-adult-children-become-financially-independent">How to Help Your Adult Children Become Financially Independent</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-smart-money-moves-for-empty-nesters">7 Smart Money Moves for Empty Nesters</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-family-money-matters-your-kids-dont-need-to-know">9 Family Money Matters Your Kids Don&#039;t Need to Know</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/dont-start-a-family-before-reaching-these-5-money-goals">Don&#039;t Start a Family Before Reaching These 5 Money Goals</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-money-conversations-parents-should-have-with-their-adult-kids">7 Money Conversations Parents Should Have With Their Adult Kids</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Family dependents empty nesters home kids moving out retirement teenagers young adults Thu, 07 Jul 2016 10:30:06 +0000 Mikey Rox 1745836 at http://www.wisebread.com