What You Should Know About Applying For Retirement

Approaching and preparing for retirement can be a daunting task, but Social Security makes it as easy as possible. Social Security has eliminated the forms, signatures, wait time, and appointments. The agency has now made it easy, convenient and secure to apply. You can complete online retirement application in as little as 15 minutes from your preferred location, at a time most convenient for you.  However, before you apply, consider how you’ll like to receive benefits, your health, and whether anyone else in your family can get benefits on your record.

The age you choose to retire affects the amount of benefits you receive and when you can start receiving them. If you start them any time before your full retirement age, Social Security reduces your monthly benefit. Depending on your year of birth, your full retirement age is likely between age 66 and 67. You may start receiving benefits as early as age 62 or as late as age 70.

If you elect to receive benefits before you reach full retirement age, and continue to work, it can affect your benefits. The Retirement Estimator  calculates a personal estimate of how much your benefit will be at different ages and “stop work” dates. You can use it to find the best combination for your situation.  You can read about other things to consider before you make your decision about when to begin your benefits. If you’re ready to apply, you can do it online.

For more information, click here.

Teaching Suggestions

  • Ask students to debate the statement, “It is never too early to begin planning for retirement”.
  • What information will you need when you apply for retirement?

Discussion Questions

  1. Why is it important to start retirement planning when you are still young?
  2. Would it be better for you to start getting benefits early with a smaller monthly payments for more years, or wait for a larger monthly payment over a shorter time period?
Categories: Chapter_14, Retirement Planning | Tags: , | Leave a comment

Better Credit by “Piggybacking”?

Is it possible for a person with bad credit to inflate his/her own credit score and get the money-saving benefits of better credit by “piggybacking” on the credit of a stranger? That’s how a Denver-based business pitched its services to cash-strapped consumers. But the Federal Trade Commission says the defendants couldn’t back up their score improvement claims and engaged in several illegal practices that violated the FTC Act, the Credit Repair Organizations Act (CROA), and the Telemarketing Sales Rule.

BoostMyScore and CEO William O. Airy claimed to offer consumers “the amazing benefit” of having another person’s credit “‘copied and pasted’ on to your credit report,” giving the buyer “the biggest possible FICO® score boost in less than 60 days; and it’s guaranteed!” Here’s how the defendants described their services, for which they charged consumers between $325 to $4,000 – or even more:

Online and in radio ads, the defendants promised consumers concrete benefits – for example, qualifying for a mortgage. According to one promotional piece, “ . . . many of our customers realize a jump of about 120 points in as little as two weeks. What would a credit score increase of that size mean for you? If you are like most people, that could be the difference between having your mortgage application approved or not.”

The settlement prohibits the defendants from marketing credit repair services that attempt to add an authorized user to anyone’s credit unless that person has actual access. In addition to other provisions to protect consumers in the future, the proposed order prohibits misrepresentations about the legality of credit piggybacking. Most of the proposed $6.6 million judgment would be suspended due to the defendants’ financial condition.

For More Information click here.

Teaching Suggestions

  • Ask students if it is possible to boost their own credit scores by someone else’s good credit.
  • Ask students if they know what information creditors use in determining whether a loan will be approved or denied.

Discussion Questions

  1. What can be done to prevent companies such as Boost My Score, to stop deceiving already financially-strapped consumers?
  2. How effective are the cease-and-desist orders and fines by the Federal Trade Commission, if the defendants don’t have to pay due to their financial condition?
  3. What are the true and tried methods of improving your credit scores?
Categories: Chapter 5, Credit Scores | Tags: , | Leave a comment

Disputing Errors on Credit Reports

Your credit report contains information about where you live, how you pay your bills, and whether you’ve been sued or arrested, or have filed for bankruptcy. Credit reporting companies sell the information in your report to creditors, insurers, employers, and other businesses that use it to evaluate your applications for credit, insurance, employment, or renting a home. The federal Fair Credit Reporting Act (FCRA) promotes the accuracy and privacy of information in the files of the nation’s credit reporting companies.

Some financial advisors and consumer advocates suggest that you review your credit report periodically. Why?

  • Because the information it contains affects whether you can get a loan — and how much you will have to pay to borrow money.
  • To make sure the information is accurate, complete, and up-to-date before you apply for a loan for a major purchase like a house or car, buy insurance, or apply for a job.
  • To help guard against identity theft. That’s when someone uses your personal information — like your name, your Social Security number, or your credit card number — to commit fraud. Identity thieves may use your information to open a new credit card account in your name. Then, when they don’t pay the bills, the delinquent account is reported on your credit report. Inaccurate information like that could affect your ability to get credit, insurance, or even a job.

For more information, click here.

Teaching Suggestions

  • Ask students to summarize major provisions of the Fair Credit Reporting Act. How does the law protect consumers?
  • What is the importance of reviewing your credit report periodically?

Discussion Questions

  1. Why only authorized persons are allowed to obtain credit reports?
  2. What must a credit bureau do when you notify the credit bureau that you dispute the accuracy of its information?
  3. What should you do if you are denied credit, insurance, employment, or rental housing based on the information in the report?
Categories: Chapter 5, Credit Scores, Identity Theft | Tags: , | Leave a comment

Health Insurance Coverage in the United States

In September 2019, the U.S. Census Bureau published a report on health insurance coverage in the United States.  The report is based on information collected in The Current Population Survey Annual Social and Economic Supplement and the American Community Survey.

Here are some of the highlights from the report:

  • In 2018, 8.5 percent of Americans, or 27.5 million people, did not have health insurance at any point during the year.
  • The percentage of people with health insurance coverage for all or part of 2018 was 91.5 percent, lower than the rate in 2017 (92.1 percent).
  • In 2018, private health insurance coverage continued to be more prevalent than public coverage, covering 67.3 percent of the population and 34.4 percent of the population, respectively.
  • Between 2017 and 2018, the percentage of people covered by Medicaid decreased by 0.7 percentage points to 17.9 percent.
  • The percentage of uninsured children under the age of 19 increased by 0.6 percentage points between 2017 and 2018, to 5.5 percent.

For more information, click here.

Teaching Suggestions

  • Ask students if they have health insurance of their own or through their parents. What are the premiums for their coverage?
  • Ask students to make a list of available sources for private and public health insurance coverage in their states.

Discussion Questions

  1. What might be some reasons why 8.5% of people, or 27.5 million, did not have health insurance in 2018?
  2. While most people have a single type of health insurance, some people may have more than one type of coverage during a calendar year. Why?
Categories: Chapter 9, Health Insurance | Tags: , | Leave a comment

Beware: Subscription Services

With growing numbers of video streaming services and product box programs, these subscriptions are becoming the newest budget buster. These seemingly small monthly charges add up, lowering a person’s ability to save along with a potential for increased debt. These ongoing financial commitments leave people with a lower percentage of free cash flow, or unencumbered income.

Subscription service spending is often overlooked especially when the payments are on auto pilot. A $4 or $8 monthly fee may not seem like much. However, research indicates that subscription services are an increasing financial burden as most people underestimate the amount. In one study, 84 percent of respondents estimated monthly spending on these services at about $80; the actual amount was over $110. In addition to video steaming services, people sign up for automatic monthly shipments of beer, wine, contact lenses, cosmetics, meal kits, pet food, razors, vitamins, and other products.

For additional information on subscription services, click here.

Teaching Suggestions

  • Have students survey several people to determine the types and amounts of subscription services being used.
  • Have students create a financial analysis for amounts saved over several years by reducing or eliminating subscription services.

Discussion Questions 

  1. What factors influence a person’s decision to use a subscription service?
  2. Describe suggested actions that a person might take to reduce or eliminate subscription services.
Categories: Budget, Chapter 2, Chapter 6 | Tags: , | Leave a comment

COVID-19 Robocall Scams

Scammers are using illegal robocalls to profit from Coronavirus-related fears.  Illegal robocalls are universally hated, so why do scammers still use them? Because scammers need only a few people to take the bait for them to make money. Scammers might do that by getting your bank account number, tricking you into handing over gift card PIN codes, or stealing valuable personal information such as your Social Security number.

Crises such as COVID-19, bring out the best in people, and the worst in scammers who pretend to be from the Social Security Administration, offering fake Coronavirus tests to Medicare recipients, and scaring small businesses into buying bogus online listing services.

To hear examples of illegal robocalls exploiting concerns about the Coronavirus, and to stay up to date on the latest Federal Trade Commission (FTC) information, visit ftc.gov/coronavirus.

Now that you know what Coronavirus robocall scams are like, make sure you share this information with your friends and family members. And, if you get such scam calls,don’t believe them. Instead:

  • Hang up. Don’t press any numbers. The recording might say that pressing a number will let you speak to a live operator or remove you from their call list, but it might lead to more robocalls, instead.
  • Consider using a call blocking app or device. You also can ask your phone provider if it has call-blocking tools. To learn more, go to ftc.gov/calls.
  • Report the call. Report robocalls at ftc.gov/complaint. The more the FTC  hear from you, the more they can help fight scams.

For more information, click here.

Teaching Suggestions

  • Ask students if they or their family members have received such calls. If so, how did they respond?
  • How many students or family members have considered using a call blocking app or have contacted their phone provider to block such calls? Summarize their findings.

Discussion Questions

  1. Why is it not advisable to ask the caller to remove your name from their call list?
  2. How does reporting your robocalls help the FTC combat scammers?
Categories: Chapter 5, Identity Theft, Uncategorized | Tags: , , | Leave a comment

SPREAD THE WORD, NOT THE VIRUS

The infectious disease experts are urging all Americans to do their part to slow the spread of the Coronavirus.  Even if you are young, or otherwise healthy, you are at risk and your activities can increase the risk for others.  It is critical that you do your part to slow the spread of the Coronavirus.

Work or engage in schooling from home whenever possible.  Avoid social gatherings in groups of more than 10 people.  Avoid eating or drinking at bars, restaurants, and food courts—use drive-through, pick-up, or delivery options.  Avoid discretionary travel, shopping trips, and social visits.  Do not visit nursing homes or retirement or long-term care facilities unless to provide critical assistance.  Practice good hygiene.  Wash your hands, especially after touching any frequently used item or surface.  Avoid touching your face.  Sneeze or cough into a tissue, or the inside of your elbow.  Finally, disinfect frequently used items and surfaces as much as possible.  Furthermore:

  1. Listen to and follow the directions of your federal, state and local authorities.
  2. If you feel sick, stay home. Do not go to work. Contact your medical provider.
  3. If your children are sick, keep them at home. Contact your medical provider.
  4. If someone in your household has tested positive for the Coronavirus, keep the entire household at home.
  5. If you are an older American, stay home and away from other people.
  6. If you are a person with a serious underlying health condition—such as a significant heart or lung problem—stay home and away from other people.

For more information, click here.

Teaching Suggestions

  • Ask students if they are practicing social distancing. If not, what are the reasons?
  • Ask students how difficult has it been since the world has almost come to a standstill. What has changed in their life?

Discussion Questions

  1. Are the President’s Coronavirus Guidelines for America fair to the citizens? Explain why or why not?
  2. Since older people are particularly at risk from the Coronavirus, why are younger people being quarantined?
Categories: Chapter 9, Health Insurance | Tags: , | Leave a comment

FINRA Investor Education Foundation Publishes “The State of U.S. Financial Capability”

Did you know that in 2018:

  • 19% of households spent more than their income?
  • 46% of individuals lacked an emergency fund?
  • 35% of credit card holders paid only the minimum on their credit cards?

In September 2019, the FINRA Foundation released data from its latest Financial Capability Study—one of the largest and most comprehensive financial capability studies in the United States. Among the findings, younger Americans, those with lower incomes, African-Americans and those without a college degree face the toughest financial struggles. More than 27,000 respondents participated in the nationwide study. Conducted every three years beginning in 2009, it measures key indicators of financial capability and evaluates how these indicators vary with underlying demographic, behavioral, attitudinal and financial literacy characteristics—both nationwide and state-by-state.

For more information, click here

Teaching Suggestions:

  • Ask students if they spend more than their income in a given year.
  • Ask students if they have a rainy day fund. If not, why?
  • Ask students if they pay in full when the credit card bill arrives. If not, why?

Discussion Questions

  1. What might be some reasons why almost one in five households spends more than their income?
  2. Why is it important to have a rainy day fund? Why almost half of Americans lack such a fund?
  3. Why is it vital to pay credit card bills in full? What are the costs of paying a minimum balance?
Categories: Budget, Credit Cards | Tags: , , | Leave a comment

Meet the “Henrys” (high earners not rich yet)

Many young people making high salaries still say they feel broke. A “Henry,” short for “high earners not rich yet,” is someone who lives an extravagant lifestyle combined with their student loans has very little money left over.  These “working rich” place a strong emphasis on travel, and often limit their spending on food and clothing in order to afford luxury trips.  While many have a desire to get their finances in order, very few take appropriate actions to do so.

Henrys are characterized by a higher-than-average income, little or no savings, and a feeling of low material wealth. Most of their earnings go toward current living expenses rather than building wealth with investments.

For additional information on high earners not rich yet, click here.

Teaching Suggestions

  • Have students conduct online research to determine various financial attitudes and behaviors of people in different age categories and life situations.
  • Have students prepare a video that recommending actions to the people described in the article.

Discussion Questions 

  1. What factors might be influencing the financial activities of the people described in the article?
  2. Describe possible financial concerns associated with these financial attitudes and behaviors, and recommend corrective actions that might be taken.
Categories: Chapter 1, Chapter 2, Financial Planning | Tags: , | Leave a comment

Medicare Supplement Insurance (Medigap) policies

Original Medicare pays for much, but not all, of the cost for covered health care services and supplies. Medicare Supplement Insurance policies, sold by private companies, can help pay some of the remaining health care costs for covered services and supplies, such as copayments, coinsurance, and deductibles. Medicare Supplement Insurance policies are also called Medigap policies.

Some Medigap policies also offer coverage for services that Original Medicare doesn’t cover, such as medical care when you travel outside the U.S. Generally, Medigap policies don’t cover long-term care (such as care in a nursing home), vision or dental care, hearing aids, eyeglasses, or private-duty nursing.

Every Medigap policy must follow federal and state laws designed to protect you, and they must be clearly identified as “Medicare Supplement Insurance.” Insurance companies can sell you only a “standardized” policy identified in most states by letters A through D, F, G, and K through N. All policies offer the same basic benefits, but some offer additional benefits so you can choose which one meets your needs. In Massachusetts, Minnesota, and Wisconsin, Medigap policies are standardized differently.

For more information, click here.

Teaching Suggestions

  • Ask students to read about different types of Medigap policies, what they cover, and which insurance companies sell Medigap policies in their area.
  • Ask students to find and compare drug plans, health plans, and Medigap policies offered in their state.

Discussion Questions

  1. What are the differences between a Medigap policy and a Medicare Advantage Plan?
  2. What types of services are not generally covered by Medigap policies?
Categories: Chapter 9, Retirement Planning | Tags: , , | Leave a comment

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