Take a Close Look at Social Security in 2016

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If you’re not close to retirement age, it’s easy to ignore what Social Security is doing. However, some significant announcements late last year make now a very good time to pay attention.

What follows is a summary of notable changes to Social Security at the start of 2016 and ways to ensure you’re making the right retirement planning and claiming (http://www.consumerfinance.gov/retirement/before-you-claim/) decisions based on what’s ahead:

  1. 2016 Social Security payments won’t increase. In late October, Social Security (https://www.ssa.gov/myaccount/) announced that there wasn’t enough inflation in 2015 to create a cost-of-living adjustment (COLA) to monthly benefits this year. Understandably, this announcement shook up recipients who look to Social Security for a significant part of their monthly income. It’s only the third time payments were frozen in the past 40 years since automatic COLA adjustments began, but here’s the rub – all three occasions occurred after 2010. In short, most seniors will have to live with an average monthly payment of $1,341 with married beneficiaries receiving a total of $2,212.
  2. Married and divorced individuals may have to rethink the way they claim benefits. Also last October, Washington settled a federal budget battle in part by closing some notable loopholes in Social Security law that allowed certain married couples to substantially increase their benefits over time and certain divorced individuals to claim benefits from former spouses under certain circumstances. These new restrictions on so-called file-and-suspend and restricted-claim strategies go into effect this coming May. In short, if you’re close to age 62 (the earliest age you can start claiming Social Security benefits) getting qualified advice has never been more important.
  3. Other COLA-related issues. When there’s no cost-of-living adjustment, there’s no change in the maximum amount of earnings subject to the Social Security tax, which will stay at $118,500 in 2016. This means earnings above that level aren’t subject to the Social Security portion of the payroll tax or used to calculate retirement payouts. At the same time, the Social Security earnings limit for people who work and claim Social Security payments will stay at $15,720 in 2016 for people ages 65 and younger. Social Security beneficiaries who earn more than this amount will have $1 in benefits temporarily withheld for every $2 in earnings above the limit.
  4. Some benefits are going down – a little. The highest possible Social Security payment for a 66-year-old worker who signs up for Social Security this year will be $2,639 per month, down $24 from $2,663 in 2015. The reason? Social Security noted that despite no cost-of-living adjustment there was an increase in the national average wage index, one of the statistical guideposts the agency uses to calculate benefits.
  5. Service changes. If you haven’t created a My Social Security account, do so for two reasons: First, there have been reports of ID theft related to thieves attempting fraudulent signups for such accounts. Second, the agency is making more detailed account data available online such as estimates of monthly payments at various claiming ages. Also, Social Security expanded office hours in some of its field locations in 2015, so if you need face-to-face assistance, check hours of operation at your closest local office (https://secure.ssa.gov/ICON/main.jsp).

Bottom line: Social Security froze benefit amounts for the coming year, and that has an impact on both current and future recipients. You can’t fully understand your retirement without understanding how Social Security works, so now’s the time to learn.

By Nathaniel Sillin

 

5 Ways to be Charitable on a Budget

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If you’ve ever wondered if you can be charitable with only a few extra dollars in your wallet or a little bit of free time, the answer is yes. You just have to get a little creative.

In the Chronicle of Philanthropy’s latest analysis of charitable giving, it appears people who earned less were giving more. Based on state-by-state tax data, the nonprofit industry trade publication reported that between 2006 to 2012, Americans earning more than $200,000 gave a smaller percentage of their income to charity while those earning less than $100,000 actually gave more during the same period.

Wherever you stand on the income scale, stretching charitable dollars or time should begin with a little planning. Here are five steps to consider.

  1. Check your finances first. Helping others is a worthwhile lifetime habit. However, before you start writing checks or handing out cash to various individuals or groups, check your budget to determine whether you actually have extra money to spare for charitable donations in any form. If you itemize, check the IRS rules (www.irs.gov) on charitable giving or consult with a qualified tax professional to see if there are charitable giving options that fit your circumstances.
  2. Screen charities you’re considering. It’s never been easier to evaluate a potential charity or nonprofit organization. Leading online databases like CharityNavigator.org, CharityWatch.org and Guidestar.org provide extensive data on thousands of national, state and local charities and nonprofit organizations. The Better Business Bureau also operates Give.org, a national charity database that accredits and notes complaints. The U.S. Federal Trade Commission’s Charity Scams website offers breaking news on illegal fundraising activities and best practices for evaluating charities and nonprofits year-round. What else can you do? Play reporter. Even if an organization checks out through these reputable sources, do an online search of news media just to make sure no unsavory developments have occurred that might discourage your donation.
  3. Research what’s needed. If the charity in question accepts physical items or volunteer work, see if you’re interested in providing help that way. Check with the charity either online or by phone to determine what they will and will not accept – donating the wrong items simply wastes staff and volunteer time. If you would like to volunteer, ask about opportunities and make sure that volunteer assignment fits you before you commit. Remember, charities really count on their volunteers and your enthusiasm for an assignment can help them keep their turnover to a minimum. Some organizations may also have travel-based service missions that can provide charitable travel opportunities that allow you to help while seeing the world.
  4. Ask if your employer will match your donation. Even if your cash donation is modest, some employers can make your contribution go farther if they have a matching gifts program. Check with your human resources department or benefits manager. Also, many nonprofits, universities and charitable organizations keep their own online databases of employer matching gift programs.
  5. Go micro. If you can only find a few dollars to give, don’t let that discourage you. Organize like-minded friends and family members to pool funds, attend events or volunteer time for a cause, or consider a particular nonprofit’s organized crowdfunding (https://www.councilofnonprofits.org/tools-resources/crowdfunding-nonprofits) efforts that will allow you to make an impact with only a few dollars. Still short on cash and want to help? Pick up the phone or email the charity and ask if they accept small items or in-kind services. Some ideas might include gift cards (including ones with unused balances), office supplies, stamps, catering for events or board meetings or help with writing, fundraising or technology.

Bottom line: Making a difference in the world doesn’t always require big bucks, but big know-how helps. Check your finances first, research charities you’re interested in and investigate how small donations of time, money and physical items can make an impact.

 

By Nathaniel Sillin

 

Retirement Tips for Recent College Graduates

Graduates-Guide-Saving-RetirementWhile college is meant to grow us both educationally and personally as individuals, there is a slew of substantial benefits that comes along with receiving a degree. None of them is as important as the ability to develop a strong (and hopefully stable) professional career that one day ends with a fruitful retirement.

Currently, today’s economic and employment landscape of America is one that is certainly more volatile than other generations have experienced. Did you know that recent studies have shown that close to 56% of people between the ages of 16-29 don’t have jobs?

On top of that, an alarming 8.5 percent of college graduates are still unable to find full time work by 24 years old. When taking into consideration how long it is taking our recent graduates to get fully established, it’s easy to see why more and more people in their early 20’s are ill prepared in the long term planning it takes to effectively reach a comfortable retirement.

The fact of the matter is, people are not only working harder than ever if they are lucky enough to get jobs, they are working longer too. Unfortunately for the current generation of young adults, retirement is no longer the result of a pre-determined laid out plan within one or two organizations.

More than ever, employees have to navigate a complicated road of different smaller “careers” connected by their own benefit packages (and subsequent expenses). That is why it is so important to start your savings off on the right foot, from your very first opportunity to do so.

Here are three helpful tips to keep in mind when you are beginning the process; remember, these decision DO matter in how you will be able to support yourself later in life, so don’t forget to consult the experts.

  1. Fully Understand the Many Aspects of Your Plan– Know the complete in’s and out’s of your company’s plan- not only the benefits and offerings, but the subsequent costs, penalties, and allowances as well. Most importantly, find out if your company offers a matching plan for a certain 401k percentage; many employers offer to match up to 4 percent of an employee’s dedicated paycheck if the employee chooses to invest that amount themselves. Learn the names of each of the funds your money will be invested in, as well as the third party organizations that may have a hand in your retirement plan. Don’t forget to fully explore both how long you need to be in the plan before you can withdraw, and what the penalties are for doing so early. The more you know, the better equipped you’ll be at making pertinent decisions with potentially long last effects.
  1. Consider a Roth Option- Plans that include Roth deferrals are based on an employee’s contributions being made after taxes; this means that contributions are made after the taxes have been taken from your pay and thus the money you eventually receive on the back-end will be allocated to you tax free. Furthermore, paying the taxes now when you are young will almost ensure that you pay them while you are in the lowest tax bracket possible. Think about it, if all goes to plan, you’ll be making significantly more money in hopefully an executive level position by time you are ready to retire. So technically speaking, your tax bracket could be several rungs up the ladder by then; that’s why it’s best to pay those taxes now.
  1. Always Contribute! Whenever and Wherever You Can- The fact of the matter is, outside of the amount your company will match, the only person that is going to be putting more and more money towards this retirement plan/fun is you! Don’t rest or fall into a lull with keeping up with the necessary contributions to make your payout as successful as possible at retirement. A good rule of thumb is to always bump your contribution up a percentage per year and per promotion. Make sure you take advantage of any type of holiday bonus or performance based merits as well; you can typically allocate funds from those payouts to your retirement plan. Don’t overdo it, but strongly consider investing as much as possible- especially when you are young before you have a family and a mortgage. You can always scale things back when you need more money now.

3 Helpful Ways College Students Can Save Money

A portrait of a mixed race college student at campus

College is truly one of the most wonderful times in one’s life; for the first time, feelings of independence and just being alive sprout from being on your own, in a new setting, with new people experiencing new things. The one drawback, however, is that almost everything awesome that comes along with college also comes with an attached price tag.

Whether we are talking about room and board or tuition itself, college just flat out costs money. Therefore, students will be constantly forced to carefully juggle and plan out not only their schedule, but their finances too. The good news is, proper time and money management in college can strongly set the table for future success later in life.

With that in mind, here are three helpful hints that will have you saving money on campus in no time!

  1. Seek Out and Take Advantage of College Discounts– Businesses that find themselves nicely nestled into a college community typically offer special rates and discounts to students. Leverage these offers to save money on a wide variety of things from laundry services and take-out food, to even clothing and nightlife. Look for fun “college nights” at campus bars and restaurants, and be sure to stock your shelves when the local market lowers its prices for students. Often, these discounts are not college specific and are valid for any individual who can show a non-expired college ID; therefore, you should definitely make good use of these deals when visiting friends or family on other campuses too. Make sure you speak to your RA and classmates to find out which establishments offer the best “bang for your buck.” College is all about stretching a dollar, so you might as well take full advantage of anything that rewards you for just being a student.
  1. Create a Work Friendly Schedule– One of the greatest things about college, is that you get almost complete control of your schedule and how you want to spend your time during your time there. While we wouldn’t recommend getting a job until after your first semester so you can get your feet wet with your studies first, you absolutely should look into the many part time gigs that can be found on campus. There’s literally everything from a delivery driver to a flag football ref for intramurals available, and if you play your cards right, you could really land a great opportunity for cash. You can load up your schedule to two or three days of the week, therefore leaving the other 3 days open for working; scheduling this way is a wise preparation for when it comes internship time as well. If you can’t load your schedule up, try to leverage a night job like bartending; honestly few jobs will grant you the access to as many financial and social perks as working in the popular bar on campus. You’ll also save a ton of money by working in a place that can get you breaks on colleges two biggest expenses- food and booze; and let’s face it- you have to be consistently making money to save it in college, so a job is a near necessity.
  1. Never Pay Full Price for School Books and Supplies– When you head to the bookstore with your schedule of classes in the summer or winter, make sure you walk right passed the “new” section and right over to the used books aisles. There is absolutely no reason, and we mean no reason, to ever pay full price for a new book in college. If you are lucky, you’ll know someone or make friends with a fellow student in each class, so you can even go as far as splitting the cost of a used book. We also know how exciting it is to get a fresh new set of notebooks, pens, bags, etc. for each semester, but let’s not get carried away with paying full price for it all; leverage back to school sales, which apply to you as much as they do to the elementary school kids. Make sure you also try to sell your books back to the bookstore once you wrap up your final exams; you’ll probably only want to hold on to a few of your materials from major related classes anyways.

Spy Banker Trojan Uses Facebook to Steal Banking Credentials

mobileIt is true that you shouldn’t always believe what you see on Facebook, or any social media for that matter. Facebook has established itself as a trustworthy platform for sharing and cybercriminals prey on this and use it to spread malware. In a recent instance, the banking malware Spy Banker has been spreading like wildfire that way.

Spy Banker has been around for quite some time, but it has recently had a resurgence targeting Portuguese speakers, but not only in Brazil or Portugal. U.S. victims have been reported as well. It uses social engineering by attempting to get users to click links that take them to a server hosted on Google’s cloud platform that installs the Telex Trojan on the machine. Then it gets to work stealing online banking credentials.

The links promise coupons, good deals, tax return help, and has disguised itself as WhatsApp, the popular chat app used by 9 million people worldwide, and anti-virus programs.

A few ways to avoid becoming a victim of such tactics are:
•Don’t blindly click links you see on social engineering sites or in email messages. This is particularly true if you don’t know the source or are not expecting it. For example, if you get an email from your mom and all it says is “Hi, it’s me” and is immediately followed by a link and nothing else, it’s probably malicious.
•Take a moment to verify a link before clicking it, even when it comes from a trusted source. Hover over it with the mouse to see where it goes. If you expect it to go to your favorite retail store, make sure that store name appears in the link. If it is shortened using a URL shortening product such as is the case with this one, it should be considered suspect and you should not click it. To verify on a touch device, such as a tablet, hold down on the link for a couple of seconds and an additional box will appear showing the entire link. Then you can choose what to do next from there.
•If you click on ads shown on social media sites, make sure they are legitimate too and not just click bait. That old adage that if it’s too good to be true, it probably is should be given consideration.
•Consider ad blocking software if you don’t want to see ads. It will block any ads appearing on pages of browsers and social media sites. There are many to choose from and many are free or donation-based. Do your research and find the one that is from a legitimate source and best fits your needs and budget.
•Make sure you have anti-malware products installed on all devices, including mobile ones and anything running Apple operating systems. Although they are typically not as vulnerable to malware, they are becoming a bigger target every day. Therefore, it is better to be covered when the next one comes out in the wild. Keep it updated at all times.
•If you are installing apps on your devices, don’t sideload. Make sure you get them from the official app stores. Getting them from locations other than these places adds risk of infecting your devices.

This one doesn’t just steal banking credentials. Because it does connect back to a command and control center, the perpetrators are also able to send additional commands to the infected device, push through additional malware, and perform other functions.

Google has cleaned the servers with the offending products and now a “404 Not Found” error appears when the site is hit. The hosting service, GoDaddy, has also removed five offending sites. However, there is one more that is registered to the same person that still has been seen as active.

© Copyright 2015 Stickley on Security

Planning a Home Remodel that Actually Pays Off

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There was a time when contractors building McMansion-style home additions or Michelin-worthy kitchens were a regular sight in many neighborhoods – until around 2006, when the Great Recession began to take hold.

Here’s the good news: home improvements are starting to add value in a rising housing market. Here’s the bad news: you have to be very careful about the renovation or remodeling projects you select to avoid over-stretching your budget.

Completing successful home improvements comes down to two critical questions:

  • Will you get most of your money back when you sell your property? (The days of 100 percent-plus returns on renovations are over, at least for now.)
  • How will project costs affect your overall financial plan?

Here are questions to fuel your planning:

  • How long you plan to live in the home after the renovation. The Great Recession proved many homeowners didn’t recoup elaborate – or sometimes modest – improvement costs when selling their homes. Even in a recovering market, it’s good to be wary. For now, renovate for the long haul and your personal enjoyment, not overnight sale.
  • Neighborhood style and standards. We’ve all seen it – the oversized addition that dwarfs the rest of the houses on the block, the $50,000 kitchen upgrade in a small home where a spruce-up for $10,000 or less would do. It’s important to know how your tastes align with what is salable in your market (see Cost vs. Value, below).
  • Opportunistic buying and installation times for various projects. Take replacement windows, for example. Collect bids in mid-summer and recheck them in late fall — you’ll likely find significant savings on both windows and installation.
  • Available renovation tax credits on federal, state and local levels. Are there credits or tax incentives on structural equipment or appliances that can offset the cost of whatever you’re planning?
  • Potential effect on property taxes. Could an elaborate renovation actually turn off future buyers thanks to higher maintenance costs and property taxes?
  • Intelligence on recent purchase prices and home features. Smart homeowners keep an eye on recent home sale prices in the neighborhood and the features – or lack of them – that made the transaction.

Now here’s where you can find some answers.

Remodeling magazine’s annual Cost vs. Value Report  has become a leading consumer resource for pricing improvements and cost recovery nationwide, regionally and in major metro areas. The online format allows users to compare project cost and recovery at sale all the way back to 2002.

While the nation’s housing market is generally in recovery, some of the publication’s 2014 top-producing projects were surprisingly small. The top three 2014 home improvements in terms of cost return were:

  • Entry door replacement (96.6 percent cost recovery)
  • Wooden deck addition (87.4 percent)
  • Attic bedroom addition/renovation (84.3 percent)

Remodeling reported that the value of remodeling projects began to slide nationally with home values in 2006 and only began to recover in 2013. As home resale values rise, so will cost recovery on incrementally bigger projects. As the publication notes, it’s a cautious environment.

For more detailed information, seek knowledge on a more local level:

  • Get to know your neighbors. If your neighbors have done home improvements inside and out, politely ask if they’ll share their story.
  • Befriend a broker. Real estate brokers and agents are happiest when they’re closing deals, but they like to build long-term relationships, too. The best brokers are happy to share neighborhood renovation value intelligence in exchange for a house tour. They can’t sell a house filled with overpriced improvements.
  • Before major projects, consider a home inspector. A home inspector’s job is to determine if the structural and mechanical aspects of a property are up to code. If a home hasn’t had a structural or mechanical upgrade for many years, professional inspection may detect trouble spots and intermediate upgrades that could be far more valuable than cosmetic work.
  • Talk to a tax professional. Federal and state tax credits and deductions may be available as part of any project you do. The IRS has a current summary (http://www.irs.gov/uac/Newsroom/Energy-Efficient-Home-Improvements-Can-Lower-Your-Taxes) of 2014 energy credits and related resources.
  • Check your credit reports and scores. If you need to borrow to complete a project, it’s a good idea to check your credit reports and current credit score to determine whether you’ll qualify for a loan. You have the right to get all three of your credit reports – from Experian, TransUnion and Equifax – once a year for free. You can do so by ordering directly from AnnualCreditReport.com.
  • Talk to a financial planner. Any home improvement project is potentially major when compared to what you earn or have in savings. A certified financial planner can help you evaluate potential projects against the competing financial goals in your life like saving for retirement and your children’s college tuition.
  • Figure out what you can do yourself. Whether it’s painting, landscaping, carpentry or electrical work, helping with a few DIY finishing touches on a home improvement project can save money. Just make sure you have the time and skill to pitch in.

Bottom line: Approach a home renovation as you would any other major financial decision – do your homework and see how it fits into your overall financial plan.

 

By Jason Alderman