Many people believe that by the time they retire there will be no social security or that social security will in no way cover their retirement needs. If you are concerned about your later years it is just as important where to save for retirement as how much to put away on a regular basis.
How about Saver’s Credit?
If you simply want to put money away every year toward retirement make sure to take advantage of the retirement savings contributions credit, called saver’s credit. This credit can be obtained through an IRA or your employer’s 401k plan. Money that you contribute up to $2,000 a year is tax deductible and appreciation over the years is not taxed. You may get a matching employer contribution as well with your 401k and you are taxed only when you withdraw funds in retirement when you tax rate is at its lowest. The Motley Fool has a nice article about how save more for retirement in which they explain this.
The majority of Americans save for retirement through their employer’s plan, such as a 401(k). And, the most common 401(k) contribution rate is just enough to take advantage of the employer’s matching contributions. While this is certainly a good way to lower your tax bill and build a retirement nest egg, it may not be enough on its own. With that in mind, here are three things you may not have known about retirement saving that could give you the tools or the motivation to save more.
Tax advantaging your retirement savings is a good first step.
How about the Stock Market?
Too many younger investors and quite a few old ones too saw their portfolios dwindle or even disappear in the 2008 market crash. However, over the long haul stocks outperform most other investment opportunities. Market Watch writes about 8 lessons from market history. It turns out that if you invest and stay invested over the years you tend to make money. And the sooner you start the better it is.
The first 10 years of this century has been regarded as a “lost” decade for stock investors, largely because of large-cap growth stocks and a couple of serious bear markets. But in that decade, a portfolio that was divided equally among these four asset classes (S&P 500 Index fund, large cap stocks, small cap stocks and small cap value stocks) wound up being a moneymaker, with an average gain of 6.7%.
Read the article. It shows how stock investors fared over the years and is a good guide for where to save for retirement.
Home mortgage interest is tax deductible which is for many Americans the best investment deal they can get. You need a place to live and it is cheaper over the years to own your own home than to rent. And home ownership is a means of forced saving for retirement. Where to save for retirement in this manner makes a big difference however. A young woman in my mother’s family moved to Southern California with her husband in the 1950s where they purchased a home for around $10,000. Meanwhile the president of the bank in her small town in the Midwest built a nice home, also for around $10,000. Fifty years later the woman in California sold her home in California for about $1,000,000 while the heirs of the banker sold Dad’s house in their home town for $10,000. In each case the homeowners benefited from the home mortgage interest deduction and the fact that it is cheaper to buy than rent. But from the perspective of where to save for retirement by owning your own home the girl who moved to Southern California won hands down!
An HSA (Health Savings Account) is a so-called tax-advantaged medical savings account. These are available to taxpayers in the United States if they are enrolled in a high-deductible health plan (HDHP). The funds contributed to an account are not subject to federal income tax at the time of deposit. What else is good about an HSA and how else does an HSA help you save money on taxes?
Tax Savings Times Three
An HSA is like an IRA in that you fund it with pre-tax dollars. But, unlike an IRA that money is not taxed when you take it out providing that the money is used to pay medical expenses. And, like with an IRA, the money you put into an HSA accumulates within the account without being taxed.
What Is a High Deductible Health Plan?
An HDHP or high deductible health plan is health insurance with low premiums and high deductibles. You can find out more about this kind of plan and how to get one at HealthCare.gov.
High Deductible Health Plan (HDHP)
A plan that features higher deductibles than traditional insurance plans. High deductible health plans (HDHPs) can be combined with a health savings account or a health reimbursement arrangement to allow you to pay for qualified out-of-pocket medical expenses on a pre-tax basis.
Many people prefer this sort of plan, especially if they have no chronic medical conditions and simply want coverage for an unlikely but financially catastrophic illness. When you get this sort of plan you are paying for insurance on the off chance that you will get really sick. And you will not be paying the overhead that is part of submitting and getting reimburses for lots of routine medical expenses. Those are simply paid out of pocket or from your HSA.
Is This Something You Should Do?
Consumer Reports has a nice article about HSAs and suggests that an HSA can help you save for retirement. They say that three things are important is picking an HSA.
Can You Afford to Put Money in an HSA?
Can You Cover Your Medical Expenses Today?
Should You Invest the Money in an HSA?
To save for retirement in an HSA, you must have signed up for a high-deductible health plan either on your own or through your employer. About half of all large employers in the U.S. now offer these plans. According to Mercer Consulting, 66 percent of large employers are expected to offer them by the end of 2017.
Every year, you add money to your HSA from your pretax income, the same way that you might add money to a traditional IRA or a 401(k). The idea is that you don’t spend it on your current medical expenses but instead leave it in the account until you retire.
If you have the money to fund a Health Savings Account and do not have huge and routine medical bills you might want to consider one. An HSA is a rare case in which the government lets you invest your money, let it grow and then use it (for medical expenses) tax free.
The best way to gain credit is to use credit. In the wake of the Great Recession many young people have avoided getting credit cards. In fact, according to Consumer Reports, half of college students aged 18 to 24 have credit cards while ninety percent use debit cards. While you can build credit using a credit card this is not the case with a debit card.
According to a recent survey by Sallie Mae, barely half of today’s college students ages 18 to 24 have a credit card, compared with nearly nine in 10 who say they use a debit card.
While a debit card can be a smart way to avoid the temptation of overspending-and possibly paying double-digit interest rates on balances-it doesn’t help you to build credit history. And young adults need a credit history to become financially independent.
The Consumer Reports article has to do with helping young people build a good credit score but the advice applies to anyone. Our sister site, Consumer Help Dept. wrote about how to fix your credit.
You need to use credit to get credit but you do not have to go into debt. This is about how to get a great credit score without carrying any debt or paying any interest. According to an article in Forbes you can do this without borrowing money.
One of the biggest credit score myths is that having an excellent credit score requires going into debt. For example, Dave Ramsey’s website says that “The only way to have a good credit score is to go into debt, stay in debt, and continually pay your accounts perfectly-without adding too much debt or paying too much off. In other words, stay in debt for as long as you can.” That advice makes it sound like you have to borrow money and pay interest in order to have a good credit score, and that is simply not true.
The author goes on to say that if you routinely use your credit card and always pay the balance in full every month you can get a great credit score in a short period of time and never carry any debt. So long as you pay your credit card balance every month before the due date you will never pay any interest.
Why you should use a credit card is so that you can raise your credit score. Make the purchases that you normally make within your budget using your credit card and then always pay off the balance when the statement comes. This is no different than paying with cash or paying with a debit card except that you get to keep your money for a month until the credit card statement arrives.
Getting Your Credit Back
If you have had financial difficulties you may have a low credit score. The best way to fix this is to get a secured credit card at your bank. You will need to maintain a balance in the bank to cover card expenses so that part works no differently than having a debit card. However, because the billing runs through the credit card company, you will gradually improve your credit, provided that you routinely pay on time just as you would have to do with your debit card.
Nearly everyone seems to have a mobile device with internet access these days. But if you are one of the folks paying for a mobile plan are you paying a fair price or being gouged? Is the service you are paying for too little, too much or just right for your needs. How to get low cost internet access is the key to happy use of your mobile device. The America Genius reports that the FCC has a new “nutrition label” to help consumers choose the right mobile plans. The point is to stop hidden fees from killing you.
Consumerist reports that The Federal Communications Commission (FCC), which receives over 2000 complaints about surprise fees every year, has proposed a new solution to prevent hidden fees and provide consumers with more information when choosing an internet or mobile data plan.
Last year’s Open Internet Order outlined rules requiring broadband providers to be more transparent with information about the costs and performance of their services. To help make it easier for companies to be transparent, the FCC has created a new labeling system that strongly resembles the standard nutrition information labels printed on boxes and cans of food.
The “Consumer Broadband Label” was created by the FCC in collaboration with the Consumer Financial Protection Bureau (CFPB). The idea was to create a standardized label, using clear language, that would make it easy for consumers to make “apples to apples” comparisons of different services. Included in the labels are information about things like monthly charges, additional fees, taxes, average speeds, and data caps.
The goal is give excessive fees no place to hide. The new Consumer Broadband Label is optional. We suggest that when searching for low cost internet access that you only consider plans that offer the clear and easy to understand Consumer Broadband Label.
An advantage for those internet providers who use the new label will be protection from future litigation based on their attempt to make their pricing transparent.
Your Information Has Economic Value
The Federal Communication Commission (FCC) is planning to require internet service providers (ISPs) to ask your permission before using or sharing your personal information. The point is that your browsing history is valuable and retailers will pay good money to add our info to their big data analysis programs. Some of these folks know your tendencies on the internet better than you do based on analysis of your internet browsing.
A good portion of modern marketing and business in general – especially in this digital age – demands that demographic and personal information is passed around. I get it. That’s how sales are made. That’s what makes the world go round. But establishing baseline privacy standards for ISPs seems like a common sense idea.
The FCC is following suit: Earlier this month the FCC announced a proposal that would regulate how ISPs (over which all that data flows) have to get an individual’s permission to collect and share all that juicy, valuable information. And the proposal, as mapped out in an FCC factsheet, has at its foundation is not so much what ISPs can do, as what they have to tell you.
Perhaps one way how to get low cost internet access should be to ask for a kickback for your info as part of the payment package.
General Motors knew there was a problem with their ignition switch in as many as 30 million vehicles but drivers had no idea. Because of this flaw and the fact that drivers had no idea about the defect until years later many people died and countless were injured in accidents. Do you know about the defects in your car? First let’s look at the GM issue and then what the Department of Transportation is doing about car defects and consumer awareness. Atlanta reported on the GM ignition switch scandal in January. They provide the details of a death related to the GM ignition switch and how the family proceeded in a product liability suit.
Nine days before her death, General Motors had announced a recall of 1.3 million vehicles, including the Cobalt, due to a power steering issue. Ken found the recall notice in his daughter’s mail after her death.
There is a lot more in the article but we simply point out that the person who died did not receive timely notice of defects in her car. Now what is going on today?
Department of Transportation Notices Online
Consumer Reports tells us that car defect information is now available on the Department of Transportation web site, regardless of whether it has to do with a recall or not.
The Department of Transportation (DOT) will post online all vehicle Technical Service Bulletins (TSB) and any other automaker communications to dealers about defects in vehicles, regardless of whether the defects are the subject of a safety recall.
This move by the National Highway Traffic Safety Administration (NHTSA) shines a light on previously shadowy-and sometimes secret-automaker communications to dealerships about potential automotive safety defects. The move improves consumer safety by enabling government and safety watchdogs to identify vehicle problems earlier.
In addition to all TSBs being posted in a more consumer-friendly PDF format to the DOT’s safercar.gov website, the directive also strongly recommends that the manufacturers submit the information in searchable formats.
The safer car website features information for shoppers, owners and manufacturers as well as a parent’s central page. For more info about kids and car seats see our recent article on the subject.
But Is All Consumer Complaints Being Reported?
All too often a vehicle passes tests and goes into production and it is only when there are problems that issues are spotted. Along the way people complain to their car dealers or the manufacturer. Sadly it appears that major auto manufacturers are misreporting consumer complaints to the National Highway Transportation Safety Administration (NHTSA). Channel 2 Houston reports the story.
Since 2003, car manufacturers have been required by law to inform the National Highway Traffic Safety Administration about claims of car defects made by consumers, including formal written complaints, informal letters, lawsuits and warranty claims.
A government audit found the government is ill-equipped to manage such a system.
On the other side of the equation, several big-name automakers are not complying with federal regulations. Honda and Chrysler were recently fined $70 million each by the Department of Transportation for failing to forward consumer complaints to NHTSA.
Honda’s civil penalty is due to failure to report 1,729 death and injury claims to the NHTSA between 2003 and 2014.
It is sad but apparently not all of your complaints about car defects and safety issues are making it through to the right authorities. Our only suggestion is to persist, consider the attorney general’s office in your state as a resource if your concerns are not being met.
The internet has changed how we connect to each other, how we learn things, how we make purchases and much more. For those who are connected life can be much more efficient, profitable and fun. But, the price we pay for often-free subscriptions to programs that allow us to send emails and text messages, share photos or make online purchases is our personal information. So, guess who knows way too much about you? Last week we asked who is protecting your personal medical information and learned that the FTC (Federal Trade Commission) is taking a tougher stance on consumer health data.
The Federal Trade Commission has been taking a tougher regulatory stance on healthcare information technology in recent years, in an effort to protect the privacy and security of consumer health data. A senior FTC official told Congress on Tuesday that lawmakers can expect to see more of the same.
This is would be reassuring if all personal data collection, storage, use and sale were being policed but there are big gaps in where and whom the FTC goes after and polices. Forbes published an insightful article about consumer privacy protection.
Today, companies are rapidly buying, trading and selling consumer information for online advertising. As business models change, more devices become connected and more information is exchanged online, consumers are inherently at a greater risk of having their sensitive personal data compromised and exploited. A recent study shows that mobile apps often share customer data with third-parties as a way to support free app offerings. Free applications – like Gmail, search, Chrome, YouTube and mapping services from Google – are free because they capture, store and use your private information. Not surprisingly, concerns have been brewing as consumer data are being aggregated and used to create targeted “consumer profiles.”
The problem in this area is that the FCC polices internet service providers (ISPs). These folks are not the big players in data collection, storage, use and sales. The largest quantity of data is collected by Android and Apple encrypted systems into which ISPs cannot see. And the FCC has no authority to deal with this area. Thus some companies that deal in internet information are policed but the majority of companies dealing with the vast majority of data are not. We can hope that the regulatory authority of the FCC will be extended to deal with this lapse but in the meantime what can you do?
Read the Service Agreement
When you sign up for a new online service there is always a service agreement. Most folks get as far as reading that they should not engage in immoral or illegal activity and then skip to the bottom to click “yes.” The problem is that somewhere in the fine print you are allowing them to use your personal information from searches and maybe anything else that they can glean from your internet usage. Very often there is an option to share information or not. If you don’t want these folks knowing everything about you, click NO.
No, this is not about chocolate chip, oatmeal or Oreo cookies. According to allaboutcookies.org, in the internet world cookies are
If you routinely delete cookies on your browser you will at least put a dent in the ability of these folks to collect your info.
It used to be that your personal health information was written in a chart in your doctor’s office and in a record file at your hospital. If someone wanted to snoop into your records they had to break into your doctor’s office or the medical records department at the hospital and then try to figure out the filing system in order to find your personal health information. Well, those days are gone! Medical information, now referred to as consumer health data, is stored on computer servers which we know can be hacked. So, who is protecting your personal health information now that it resides in the cloud? According to an article posted by Health Data Management the Federal Trade Commission has been ramping up their regulatory measures of health information systems in order to better protect your personal health information and protect your medical privacy.
The Federal Trade Commission has been taking a tougher regulatory stance on healthcare information technology in recent years, in an effort to protect the privacy and security of consumer health data. A senior FTC official told Congress on Tuesday that lawmakers can expect to see more of the same.
Jessica Rich, director of the FTC’s Bureau of Consumer Protection, warned House Oversight and Government Reform subcommittees that because consumers are taking a more active role in managing their health data through mobile apps and wearable devices, this information is being collected, used and shared outside of doctors’ offices and other traditional medical contexts, putting consumers at risk.
“Many of the entities creating these new consumer-facing products and services are not covered by HIPAA, which only provides protections for health information held or generated by certain covered entities-namely healthcare providers, health plans, and healthcare clearinghouses, and their business associates,” Rich testified. “The entities creating these new products are, however, within the FTC’s jurisdiction in most instances.”
The FTC uses its authority under the Federal Trade Commission act which prohibits unfair or deceptive practices to bring enforcement against companies that do not maintain appropriate and reasonable security practices for your personal medical information.
Why Are Your Medical Records on a Computer Server?
Patients move from doctor to doctor or more commonly in this day and age are assigned to a new HMO when their employer buys into a new health plan. And medical records get lost or forgotten about. Written records from the doctor’s office are not available in the hospital emergency room. But records that are kept in a password protected system allow the treating doctor access to all information vital to your care. In theory and in practice this is a good idea. Lab tests and x-rays are not repeated unnecessarily nor are referral to specialists when the diagnosis has already been made and is merely hiding in another set of records.
The other reason your records are on a server is that you signed up for a service that holds your medical info for you and these records are not the property or the responsibility of the tech department of the clinic or hospital. Here is where the FTC comes in to police private companies that are holding your personal medical information. Thus, if you think that someone is stealing your info for whatever reason the people to contact are the FTC. The FTC consumer complaint page explains how submit a complaint and what information to provide.
How can I submit a consumer complaint to the FTC?
To report fraud, identity theft, or an unfair business practice, visit ftc.gov/complaint, click on the FTC Complaint Assistant icon, and answer the questions.
The more information you can provide about the situation, the more useful your complaint will be. If possible, be prepared to provide:
Your contact information: name, address, phone number, email
The type of product or service involved
Information about the company or seller: business name, address, phone number, website, email address, representative’s name
Details about the transaction: the amount you paid, how you paid, the date
The FTC cannot resolve individual consumer complaints, but we have tips to help you get your money back.
Good luck and make sure that some hacker is not stealing your personal medical information.
Everyone has heard about hackers stealing your personal information from government or company data bases, from your credit card or via phone fraud. But, how could someone hack your car? You can blame the fact that your new car has wireless internet capabilities. This is enough of a potential problem that the FBI has addressed the issue of vehicle cybersecurity as reported by the Christian Science Monitor.
The Federal Bureau of Investigation released a public service announcement on Thursday in association with the Department of Transportation (DoT) and the National Highway Traffic Safety Administration (NHTSA) alerting car owners to the updated cybersecurity threats to their vehicles.
Car hacking first entered the mainstream last year, when vulnerabilities were discovered in Internet-connected vehicles. By giving cars wireless capabilities, manufactures have inadvertently introduced flaws that can make them vulnerable to hackers.
For years now cars have had computerized features to control steering, brakes, fuel mix, airbags and more. Because these standalone features could not be accessed unless your mechanic connected the car to a diagnostic computer this was never a problem. But now the interconnected computer system of your car is connected to the internet! Once a hacker gains access to your car’s computer system, there is no end to the problems that he can cause.
Is This Real?
Last year Fortune notified us that our cars are not safe from hackers.
Two computer hackers have spent the past year cracking the digital defenses of Internet-connected vehicles. And what they’ve discovered is disturbing.
Charlie Miller, a security engineer at Twitter and Chris Valasek, director of vehicle safety research at the cybersecurity firm IOActive, can take over certain vulnerable automobiles with ease. The pair recently demonstrated their abilities on a Jeep Cherokee, remotely hacking into the highway-cruising vehicle from miles away.
“Their code is an automaker’s nightmare,” wrote Wired reporter Andy Greenberg, who intrepidly volunteered to serve as a crash test dummy for the hacker duo. “Software that lets hackers send commands through the Jeep’s entertainment system to its dashboard functions, steering, brakes, and transmission, all from a laptop that may be across the country.”
Fortune estimated that as many as 471,000 vehicles are vulnerable to hacking. What are automakers doing about this? Ford, GM and others will create an information center in order the share problems and possible fixes according to another Fortune article, Automakers unite to prevent cars from being hacked.
What Can You Do about Someone Hacking into Your Car?
The FBI suggests that your routinely update vehicle software and make sure that no one makes changes to your software that would affect vehicle performance. If you think that you have been the subject of hacking notify your dealer, the National Highway Transportation Safety Administration or your local FBI office. Eventually car companies will build in firewalls so that hackers would at least need a password to access your car as you drive by. In the meantime beware that someone could hack your car as you pass them on the road or from across the country!
Do you get your health care system from a doctor or from a health care system? This may depend on whether you want to be treated as a consumer or a patient. This thought comes to mind after reading an article in Healthcare IT News, 3 Ways Technology Can Help Treat Patients as Consumers.
It is critical for healthcare systems to proactively manage both the patient experience and their expectations.
Smarter. Faster. More connected. On demand. These are the global trends that are redefining and revolutionizing every industry – and healthcare is just getting started. Today, consumers can choose to comparison shop, read reviews, crowd source recommendations for just about everything, instantly. And as consumers increasingly bear the burden of their healthcare costs, patients are starting to approach their healthcare decisions in the same way. Hence, it is critical for healthcare systems to proactively manage both the patient experience and their expectations, to increase patient loyalty, sustain the provider’s brand reputation and prevent new entrants into healthcare from siphoning patients away.
According to Healthcare IT News, what technology can bring to the game is transparency, better access to more information about costs of health care plans or insurance and just what is, or is not covered. And they believe that technology will be crucial in synthesizing all of the health care data available to come to the best overall solutions. And if you live a long way from the doctor technology offers the virtual office visit via telecommunication.
Whose Goals Are Met Via Technology?
Last year U.S. News published an article about the value of having a primary care doctor.
One primary care doctor per 10,000 people in the U.S. can decrease hospital admissions by 5.5 percent, emergency room visits by 11 percent and surgeries by 7 percent.
Do you want to live longer; enjoy better health; avoid unnecessary emergency room visits, hospitalizations and surgeries; and pay lower health care costs? I surmise that for nearly everyone, the answer is “yes.” Each of these goals can be attained through a relationship with a primary care doctor. Primary care doctors provide accessibility as your first contact with the health care system; accountability, addressing the vast majority of your health care needs; and coordination of care across settings, integrating your acute and chronic needs and guiding access to focused specialty care when needed. They promote health and prevention, and strive to develop a sustained partnership and personal relationship with you.
What may seem like a myriad of roles and responsibilities are actually the basic tenets of a typical primary care practice.
So, do you want to be treated as a consumer or a patient? The focus of your personal physician is to help you avoid illness and help treat you if you get sick. The focus of a technology driven health care system should be the same. However, health care systems compete for patients. Health care systems negotiate with insurers and buyers. Health care systems advertise in order to drive patients to their doors. And health care systems constantly strive to reduce the cost of treating you, all too often to the point of neglecting your health or denying you access to treatments. Do you want to be treated as a consumer or a patient? Keep this in mind when looking first of all for a doctor and secondly for a health insurance option.
Credit cards are very useful and an efficient way to pay for things without carrying a lot of cash. But there can be problems with credit cards such as identity theft. We have written about identity theft protection and fraud and identity theft with gift cards. Now we ran across an interesting article in CBS Money Watch about the 8 most dangerous places to use your credit card and why. Part of this has to do with using debit versus credit cards.
Making all of your purchases with a debit card is a good way to avoid spending more money than you have and racking up debt. But it’s not always the smartest way to pay. In fact, using a debit card at some places or in some instances can be dangerous.
That’s because debit and credit card transactions are processed differently. And the protections aren’t quite the same.
Under federal law, your liability for unauthorized credit card transactions is capped at $50. You’re not responsible for any unauthorized transactions if your card number — rather than the card itself — is stolen, according to the Federal Trade Commission.
You’re not responsible for unauthorized debit card transactions if you report that your card is missing before someone uses it. Otherwise, you must report unauthorized charges within two days of learning that your card is lost or stolen to limit your liability to $50.
If you wait more than two days, you could be liable for up to $500 in unauthorized charges. After 60 days you could be on the hook for all unauthorized transactions made with your card, according to the FTC. Unlike with credit cards, you have to report unauthorized transactions with your debit card number within 60 days of your statement being sent to you to avoid liability.
Here are the 8 places where it is most dangerous to use your credit card according to Money Watch.
There are three risks when using your credit card online. One is that way too many e-commerce sites have been hacked and information of customers has been stolen. Another is the risk of a virus being implanted in your computer when you deal with an online entity and then having your information stolen. The third is for many online sales your credit card info is taken and written down by a person who might or might not use it for their own profit.
If you use a debit card when you check into to hotel they will commonly put a hold on the expected amount that you will end up paying. This may put a crimp in your style if you want to go shopping and find that a large part of your account is tied up by the hotel.
The biggest risk in a restaurant is that the server takes your credit card out of your sight. You card could be stolen or information could be stolen from a magnetic strip card before it is returned to you.
The Gas Station
There are two risks at the gas pump. Criminals may have installed software or devices to steal your card info. This is called skimming. The other problem is that if swipe your card before pumping gas some systems deduct an expected amount from your card often in excess of what you are buying. It can take a couple of days to get the remainder added back to your account.
Devices installed on non-bank ATMs can steal your credit data much like what can happen at the gas station. The better choice is to use an ATM at your bank where the machine is properly maintained and monitored.
These machines are also subject to tampering and should be avoided if you spot anything suspicious such as a loose or poorly fitting part.
Vacation Rental Properties
If you want to rent vacation rental property be sure to use a credit card instead of a debit card to reduce your risk of loss. Too many of these operations are simply fronts to gain credit info from the unsuspecting.
Recurring Charges/Automated Payments
The problem here is not so much one of identity theft as forgetting that you are making payments every month. Make sure to check your balance on the account with your debit card and check your credit card statements so that you don’t overlook those recurring payments.