Utilizing ‘my’ Social Security Account

Social Security BenefitsUnderstanding your Social Security benefits is a Savvy use of your time. The Social Security Administration web site can be a useful tool as you prepare for retirement. Beyond that, it can also serve as a useful tool during the period you spend in retirement.

While it is reasonable to expect that the program will change over time, it is highly unlikely the program will be going away. Therefore, the likelihood that it will change is a good reason to use this tool as a means of staying on top of the changes and understanding the potential impacts to your retirement.

Can We Really Trust our Annual Social Security Benefit Estimate? [Nearly Retired]

If you have not already done so, I highly recommend you visit the site and create a my Social Security account.

How does a my Social Security account benefit you? It provides multiple capabilities if you are currently receiving Social Security benefits or have Medicare, including:

  • Receiving your Benefit Verification Letter
  • Checking your benefit and payment information
  • Checking your earnings record
  • Changing your address and phone number
  • Starting or changing the direct deposit of your benefit payment

And if you are not currently receiving benefits, you can:

  • Review estimates of  your retirement benefits
  • Review estimates of your disability benefits
  • Review estimates of your survivors benefits
  • Review estimates of your earnings record
  • Review the estimated Social Security and Medicare taxes you have paidMy SSA Account

The Social Security Administration makes it very easy to create your account online; I created mine in about 10 minutes. Easy, breezy, lemon-squeezy! As you might suspect, to create an account you must provide some personal information about yourself and give answers to some questions that only you are likely to know. Once  you have answered a few questions, you will create a username and password that you will allow you to access your online account.

How to Calculate Your Social Security Benefits [CBS News]

While your Social Security benefits should not be the centerpiece of your retirement portfolio; and it is more than likely that Social Security benefits will change over time – particularly for younger workers (e.g. Gen Y) – they should be taken into account when developing a retirement plan and being aware of potential benefits is simply the Savvy thing to do.

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#CreamCityHustle – Update #2

August 23rd – Update #2

Cream City Hustle CoverThe novel is going well. In fact, I suspect I will be able to release it earlier than originally planned. Perhaps around the end of September. Currently, the novel is at about 36,000 words. Based on where story is and how I plan to conclude it, I suspect it will end at around 55,000 – 60,000 words.

As I indicated in the Introduction to Cream City Hustle, I was looking for a name for the story’s antagonist. There were a lot of good suggestions. Family members had suggestions, some were made here on the blog and a few were made on Facebook. Ultimately I settled on Caine, short for Cocaine, the suggestion submitted by long-time reader Brian. Here is a short passage that addresses how he came to possess the nickname:

     Earned in Chicago – where he cut his teeth in the drug game – Caine was proud of the name bestowed upon him, and the fact that in a mere four years, he had become the largest dealer of Cocaine in the city.

And below is where Marcus, the story’s protagonist, and Caine meet for the first time:

     They made their way down the hall toward the door at the end. Just short of the door, Drake guided him to a stop and tapped lightly on the door. “Yeah,” a voice called out from the other side. “Watch him,” Drake instructed his partner who had taken up a position behind Marcus’ left shoulder, as he opened the room’s door and let himself in.

     An indecipherable, hushed conversation was all that Marcus could hear from the other side of the door. Moments later, the door opened and Drake waved Marcus in. Marcus stepped in a few steps with his shadow close behind. “That will be all. Thank you, Ricky,” said the man seated in the chair. “Yes, Sir,” replied Ricky as he retreated from the room, closing the door behind him.

     The room was dark. Darker than what was natural. The soft glow from the only source of light in the room, a small lamp in the corner, illuminated why. Behind Caine’s left shoulder, the only window in the room had been covered with a black drape. No sunlight or moonlight was going to pierce that heavy cloth.

     Drake and Marcus just stood there and Caine sat in his chair. Even seated, it was clear that this was a big man. Marcus figured he was two to three inches taller than himself and easily 40 pounds heavier. This was a big brotha. As he took in the whole scene, the two images that came to his mind as he looked at Caine in his oversized chair were Robert DeNiro playing Luis Cyphre in Angel Heart and the Joffrey Baratheon character in Game of Thrones. Caine certainly had a high opinion of himself, sittin’ in that big-ass chair.

I hope you enjoyed the preview and I look forward to your feedback.

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August 12th – Update #1 

Below is the first paragraph from my novel in progress, Cream City Hustle. The opening paragraph introduces the story’s protagonist, Marcus. At this point, I have about 13,000 words written and it is going well as I have a very good idea where I want the story to go. Also of note, some subtle changes have been made to the book’s cover. See Below. The leaf has been brought to the fore, weaved between the ‘L’ and ‘E’ in Hustle.

     “Damn!” Marcus swore under his breath as he blew into his cupped hands, trying to warm them and fend off the cold November air. One day, not soon unfortunately, he would leave this city behind. As much as he loved catching the occasional Brewer’s game in the spring, spending time at Lake Michigan in the summer and watching the Packers in the fall, he hated winters in Milwaukee, his hometown and the place he had called home all 19 years of his life. Absolutely hated it! “What did you say?”asked Train. “I hate the snow and it’s too damn cold out here,” Marcus told him, blowing more hot air into his cupped hands. “How much longer will we have to wait?” It was a rhetorical question of course. Like him, Train had no idea how much longer they would have to wait for Trevor, Marcus’ supplier.

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August 6th - Introduction to Cream City Hustle

I recently started my first novel, Cream City Hustle, a personal finance thriller set in Milwaukee. I’m looking for a good name (nickname) for the antagonist, a would be drug kingpin. Any suggestions? I’ll be sure to give a shout out in the Acknowledgements to the person that comes up with the chosen name when the book is published.

I plan to offer updates as I make progress. Look for a preview of the first paragraph or two next week. I look forward to getting reader feedback.

This is the working book cover…

Cream City Hustle Cover

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Living Frugally: The Frugal Mentality

How Much is EnoughOften, upon hearing the word frugal, inaccurate images float through the mind’s of many people.

Some imagine a penny-pinching Grinch that hoards every dollar as if clinging to life itself.

Others imagine a destitute fool who doesn’t recognize the so-called “finer things in life.”

My hope is that this blog post gives a better picture of the mind of the frugal individual. Set aside the inaccurate, and sometimes insulting images in your mind, and let’s discover the real reasons for developing the frugal mentality.

There is a scene in The Great Gatsby where Gatsby is on the second floor of his bedroom, throwing pieces of clothing down to the woman he loves. His intention is to entice her with his riches, impress her with expensive clothing, and therefore hold her affections.

This is a far cry from the frugalist’s mindset. A frugal person is free to see things as they really are. Free from the prison of materialism. The frugalist understands that the really important things are neither material nor monetary. Unlike the get-all-you-can attitude of most folks, the frugally minded actually see the ultra-lavish lifestyle as both sickening and greedy. I say this from personal experience.

The movie scene I described earlier actually turned my stomach. Why?  Because I think of all the desperate folks in the world who could benefit from the generosity of the ultra-rich.

Can you imagine the problems that would be solved if every mega-rich celebrity or sports personality decided to sell their mansions and some of their many luxury vehicles, then donated the proceeds to feed the hungry or help rescue victims of human trafficking? What if all those millions were funneled into creating jobs for those in desperate situations instead of being used to buy expensive purses, over-priced shoes and jewelry?

FrugallyThat would be an amazing thing!

It is the frugal mind that can do this world the most good because it is not trapped by the mentality of gathering more and more stuff. The frugalist is free to give to charities, churches, and the indigent on the street without feeling she has missed something.

She understands the importance of paying a homeless person to wash her car instead of going to the car wash. In fact, giving to those less fortunate gives the frugal person a great sense of accomplishment and satisfaction.

So the next time you’re tempted to think of a frugal person as stingy or cheap, you may want to consider that she is not hoarding her pennies, she is proactively funneling them to where they are needed most.

And you SavvyReader, what frugal practices have you adopted?

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Introduction to HELOCs

HELOC HomeA Home-Equity Line of Credit, or a HELOC, is a loan that use a borrower’s home as collateral. It appears as if they are making a comeback.

With this type of variable-rate loan, homeowners can draw money at their discretion. However, in an effort to lower their risks in making the loans, banks have instituted some restrictions.

First, getting a HELOC typically requires a credit score North of 700. As with access to credit in other formats, a good credit score is essential. Second, many banks have instituted curtailment clauses. Essentially, this means that the bank can cut off your access to the line of credit at their discretion.

And finally, the amount of money the bank will allow you to borrow against your home will likely be limited to an amount based on a loan-to-value ratio of around 80%. As an example, if your home is appraised at $270,000 and the balance of your loan is $210,000, the maximum loan you could get would be $6,000: 270,000 x .80 = 216,000 – 210,000 = 6,000.

Recently, the rates on these loans are averaging below 5%. Why might you consider taking out a HELOC? Banks pitch them as tools to be used in the same way people typically use credit: to pay for a child’s education (discussed here), to make home improvements, to consolidate other debt – particularly credit card debt – and as the source of an emergency fund. Of course, regular readers of this blog know that I am a fan of a traditional emergency fund. Just as I have suggested using credit cards as an emergency fund is a bad idea, so is using a HELOC as an emergency fund.

As noted previously, the bank could limit access to your HELOC at their discretion. Nothing worse than believing you will have access to money when the unexpected occurs, only to find out that your access has been limited or completely cut off. You are much better off maintaining a true emergency fund which you control.

While there are probably worse things in the world than HELOCs, they are probably best avoided by savvy retirement planners. Need an emergency fund? Establish and build one at a bank or credit union. Want to send your child to college? Start saving early and look at options such as a 529 College Savings Plan. Use a HELOC as a consolidation loan? You’re better off putting yourself in a position (i.e. avoiding credit card debt) where you don’t require one.

 

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Living Frugally: The Wedding Blues

Wedding Bells BluesDon’t let your failure to manage your green lead to the wedding blues. The wedding industry is booming.

Everything from the bride’s dress, the photographer, and of course – my personal pet peeve – the wedding planner. All are big money. Brides-to-be have been convinced, “It’s the most important day of your life, spare no expense.”

And many a groom, wanting to please their soon to be wife, have fallen for the idea that the engagement ring should cost at least three month’s salary. Seriously, who came up with this stuff?

I’m about to say something that will probably be very unpopular. Both those pieces of advice are very unwise and financially unsound! We have become a society that will spend thousands and thousands of dollars for an occasion that lasts a few hours, tops. Don’t get me wrong, it’s a momentous occasion for both bride and groom; and their families.

It is a day that should be treated with respect. However, so should the actual marriage. You know, all those days that come after the rice is thrown? Yep, they are important also.

Wedding Costs [The Huffington Post]

I have a family member who spent over $10,000 on her wedding. She had food catered, a huge dress, and a dress covering I can’t even begin to describe. There were a few limos involved, a huge bride’s cake, a groom’s cake, a reception at a fancy eatery on the bay, a cruise on a boat and tons of other stuff that still boggles my mind.

Imagine that $10,000 invested wisely for the next thirty years. Compound interest and time are amazing allies. Use them!

My wife and I spent less than $200 on our wedding. The cost of the location was zilch, zero nada. It was held at my oldest sister-in-law’s house. The mayor of Shelly, Idaho performed the ceremony for free in exchange for us donating at least a whopping $5 to a certain charity. We donated $15. The cost of food was minimal. It was a pot luck! Invitations were ordered online and I doubt we spent $100.00.

FrugallyThe number one cause of tension between man and wife, and the eventual cause of many divorces, are money related problems and a couple’s differing perspectives on money. The fact that society encourages such a large expenditure of funds from the very beginning is then more than a little disturbing.

Imagine the positive economic impact if the soon-to-be-joined were encouraged to spend as little as possible so they would have more for their future together. Doesn’t it make more sense to begin the marriage voyage with a healthier money outlook, helping to avoid the one thing that’s proven to end marriages the world over?

Let’s not set up future couples for failure. Teach youth to ignore the advertising ploys of the wedding industry. Teach them to consider their financial futures. Let’s encourage them to treat their marriage with even more respect than the wedding by fueling the marriage with the gift of financial freedom.

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