January 28, 2020 — Having tried to cheat you out of your money in dozens of other ways, many hackers are now targeting retirement accounts. Unfortunately it can be very easy for them, and even worse than that, you might not get your money back if they steal it.
With retirement funds being one of their biggest assets, the stakes are huge for retirees. A recent article in USA Today highlighted some ways to protect your accounts.
Email is the way most hackers use to break into your accounts. Tricking you into downloading something, providing personal information, or going to a dangerous site is the usual way in. The email might seem alarming, telling you there is a problem with your account and request more information, or ask for your password.
But just as dangerous, the scammer might already have some of your personal information, stolen from a compromised site and subsequently sold on the dark web. They might already have your username, email, and password for one site. Banking that you reuse the same password or a close variant of it, they can keep plugging in various combinations and sooner or later they hit pay dirt.
4 things to protect your retirement account.
Rule #1: If an email even looks faintly suspicious, don’t open it up. Never reply with any personal information or club on a suspicious link.
Rule #2: Read all your statements every month. Look for unusual activity and amounts or transactions you don’t recognize. Call your provider immediately if you do.
#3: Have virus software on your computer. Inexpensive products such as those from Norton will alert you to suspicious web pages and block most malware and other dangers. Keep it up to date.
#4: Use different passwords for different sites – never reuse the same one. That way if one of your accounts is compromised you can contain the damage. Use a password manager to generate and/or store your passwords – Robiform and Lastpass are two popular ones. The safest but also the clumsiest way is to write all of them down in a notebook that you hope doesn’t fall into the wrong hands. The worst plan is to try try to hide them somewhere on your computer. To simplify things you might combine nonsense words that you can remember easily, such as Cat dogfish222. But you must mix things up or the hackers will figure out your system.
Comments? Have you been hacked ? If so, how bad was it, and what did you do to recover ? What systems do you use to stay safe ? Please share your experiences in the Comments section below.
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December 28 , 2019 — Social Security is the single most important source of retirement income for most people. So it is crucial that you understand how the rules apply to your situation. Here are three important things you need to understand about how Social Security works.
1. Know when to claim
The earliest you can claim is age 62. Your Full Retirement Age (FRA) is somewhere between 66 and 67, depending on your birth year (if born before 1954 it is 66 and increases one month per year after that up to 67). Your benefit maxes out at age 70; there is no advantage in waiting past that. if you file at age 62 you will only get 75% of what you would get if you wait to your FRA. If you claim between your FRA and 70 your benefit will increase by 8% a year. You can file for your benefits online or in person.
December 22, 2019 – The SECURE Act has been passed by the Senate and House and signed by the President. The bipartisan bill, Setting Every Community Up for Retirement Enhancement, has several key provisions that impact many of those who are currently retired as well as people planning for retirement.
Good news. The bill allows for people over 70 and one half who are still working to continue to contribute to regular IRAs – there is no longer an age restriction for making such contributions. Perhaps the most important provision is the one affecting people who will not have reached age 70 and 1/2 by December 31, 2019. The new law raises the age for taking Required Minimum Distributions (RMDs) from 70 and 1/2 to 72. These two provisions allow people who have not yet reached the age of 70 and 1/2 to achieve higher IRA and 401(k) balances for retirement if they are currently working and/or have enough non-IRA investment assets to defer taking IRA minimum distributions for an additional two years. This can provide for a higher likelihood of not outliving retirement savings. Unfortunately, if you were already 70 and 1/2 before 2020, you still have to take the RMDs required under the previous law.
December 7, 2019 — We don’t know about your experience, but in ours we are starting to see signs that many of our retired friends and relatives are getting more and more frugal. Some have to cut back from necessity, but even many of our very well off friends seem to be pinching pennies, at least in some corners of their life. Folks that might fly business class to Australia on a luxury vacation, but hoard plastic bags from the supermarket to line their kitchen trash bin. Many like to save money for the sport of it. After all, who likes spending money on unimportant stuff. Snagging an inexpensive vacation, landing a great deal on a rental car, or getting a better internet deal is a lot more fun and exciting than paying top dollar!
If you search on the Internet for “live like a cheapskate” you will strike a frugality bonanza. There are authors like Jeff Yeager who have written best sellers on the subject (“The Cheapskate Next Door“). There’s even a show on TLC, “Extreme Cheapskates“. Not to mention all of the articles Topretirements has written on the subject over the years (see Further Reading at bottom). This article will roll up advice from all over into some of our top tips on how to live like a cheapskate, and have fun while doing it!
First of all, a little etymology – if you are going to be a cheapskate you might as well understand where the term came from. Although there is some uncertainty about the origin of the word, the main dictionary sites think that “skate” was a late 19th century slangy term for a worn-out horse, to which cheap was added to imply mean or miserly. One Wiki source claims it refers to inexpensive strap-on roller skates; while we acknowledge those were horrible to skate on back in the day, we doubt that is the term’s origin.
October 30, 2019 — For years the curiously named Windfall Elimination Provision (WEP) has frustrated countless workers in the public sector. The WEP was created to try to help protect Social Security as well as prevent so called “double-dipping” by public workers who are eligible for pensions as well as Social Security retirement. Most public workers feel that the WEP unfairly takes away some of the benefits they earned from Social Security. Now a Republican Congressman from Texas, Kevin Brady, has proposed its elimination and replacement with a new system. This is his statement:
“For years, lawmakers on both sides of the aisle have called for a permanent solution to fix WEP. This arbitrary Washington compromise has resulted in unfair treatment for our teachers, fire fighters, and police officers; and Texans simply cannot afford Congress to remain inactive and let this unfair policy be the law of the land. Now is the time for Congress to put forth a solution that can actually be signed by the President. This legislation permanently repeals the current WEP, and instead uses a fairer formula that treats public servants like all other American workers. Democrats agree that this is a problem we must address now, and we hope they join us in fixing this long-standing problem this year. While I am introducing a bill today, I am committed to staying at the table to get a bill to the President’s desk.”
The WEP is complicated, and relies on a formula. Basically, if you have less than 30 years of substantial earnings subject to Social Security, you will give up a portion of benefit. For example, if you had less than 20 years of paying into the system and became 62 in 2019, you would forfeit $463 of your promised monthly benefit. If you had 25 years the forfeit $231, and $0 if you had 30 years. SSA has a WEP chart to help you figure this out (see below).
Comments: It is anyone’s guess if Brady’s bill will ever become law. Are you affected by it, and do you think the current system is unfair? Let us know in the Comments section below.
August 14, 2019 — Some of the questions about Social Security that come up most frequently concern claiming benefits. People are confused or unsure about when they can claim, how much they will receive, spousal benefits (including those for divorced people), special filing strategies, etc. This article will go over some of those questions and, hopefully, provide helpful answers.
When can I claim Social Security retirement benefits? Most people have a pretty good idea of the answer to this question – the earliest you can claim is age 62. The longer you wait to claim, the higher your benefit, up until age 70.
What is my “Full Retirement Age” (FRA)? This is the age when you fully qualify for your Social Security benefits. For people born between 1943 and 1954 the FRA is age 66. For those born in 1955 or after, it increases two month per year until it reaches age 67 for those born in 1960 or later. Note that “Full” is not a totally logical term, since if you delay collecting your benefits past your FRA you will get higher than “full” benefits anytime up to age 70.
July 15, 2019 — Hiring a good financial advisor is a difficult job for most people. Although there is no shortage of solicitations that appear in the newspaper, come in the mail, or through a phone call – how do you know if the person who tells you they are so gifted is really that great? Someone who will look out for your interests, not cheat you, protect your hard earned savings, and actually make your savings grow. After all, your money represents your financial security, which makes making this decision so important and so difficult.
A while back we profiled a number of tips for hiring a good financial advisor (see Further Reading at end). This feature will build on that and provide some tips for how to evaluate the person you hired, or the one(s) you might be considering for the job.
Seven things to look for
Trust your instincts. Your intuitions and first impressions are always important. If you feel like you are being swept along into a decision and little voices tell you something might not be right – stop and listen. Further exploration might clear them up, but never dismiss your reservations.
June 24, 2019 — Women tend to do more of the worrying than men, at least in the circles we travel in. And for us men, that is usually a good thing for our preservation. When it comes to women’s big fears about retirement, the research primarily focuses on money concerns, but there is no shortage of other worries. We’ll cover the common concerns that we are aware of, but we are eager to hear what yours are in the Comments section at the end.
Top Worries – Money
A study published by the nonprofit Transamerica Center for Retirement Studies reported that 46% of women were concerned they wouldn’t have a comfortable retirement lifestyle. By comparison, only 31% of men had similar concerns.
June 16, 2019 — Most of retirement age America, with the possible exception of our elected representatives in Washington, D.C., has some inkling that Social Security retirement is facing big benefit cuts as early as 2034. The commonly held reason why is that are too many baby boomers collecting their Social Security retirement checks, with too few millennials and Gen Xers paying into the system to keep it in balance. While that is not inaccurate, there is another, more fundamental reason for the shortfall, which dates back to the beginning of the Social Security program.
When the program started in the 1930’s there was an intrinsic problem. Half of the working population at the time was at least halfway towards retirement age. Yet because the program was new, no one had yet contributed anything into the system. It was decided that these Depression-era workers would be given full benefits anyway. Enough money was being collected that benefits could be paid as these workers retired. So they essentially had a windfall – they collected far more than they ever paid into the system. The benefits paid to them would ordinarily have been paid into the trust fund reserves, forever reducing the trust funds. In retrospect, it might have been better to have funded the shortfall from the general treasury at the time.
June 2, 2019 — The number one Google search about retirement is “How much do I need to retire”. Or, phrased slightly differently, “how much can I spend in retirement”. It is a tough question, dependent on a lot of factors unique to you. The short answer is: “a lot more than you thought”.
We liken the problem to a maxim our old friend Ralph came up with on a fall camping trip. After a night when the temperature dropped, the fire died down, and we ran out of firewood well before bedtime, he came up with the solution for the next campfire. Before it gets dark go out and collect about as much wood as you think you will need. Then go back out and gather at least that same amount again…. now you will probably be OK!
Here in this article we will address how to identify how much you need to retire comfortably. We want to stress that people usually underestimate two related things: how much is needed, and how long they will live. To be safe, keep Ralph’s maxim in mind. We will also explain the major withdrawal techniques, and provide a list of the situations that cause people to underestimate their needs.
How much do you need – the budget
The lifestyle you plan to live will determine how much you need. Step 1 is to figure out how much you are spending now, and estimate how that might change once you retire, including estimates for future medical expenses. You probably won’t spend a whole lot less than you do now, particularly if plan to travel a lot. If you make big changes to where you live, those expenses might go down a lot.