I recently came out from under the mess of the recession but I still have minimal yet manageable credit card debt. I want to start rebuilding my savings and retirement plans so I took your advice and looked up certified financial planners in my area. Unfortunately, a couple of them never got back to me and the one who did said he deals with wealth management and since I have no wealth, I’m not a candidate for his services. He recommended that I seek help from companies like Fidelity Investments and TD Ameritrade but aren’t they biased to their own products? If so, how will I know my money is being invested in the right place? What should I do?
Hi Kelly. It sounds as if you’d prefer an advisor not affiliated with a particular firm. Take a look at the Garrett Planning Network. Sheryl Garrett, a fine planner in her own right, has built a network of planners willing to work with customers by the hour. So you can spend just the time you need to get the plan or information you need, then execute the recommendations yourself. This will save you a considerable amount of money. Then, once a year, I’d go back to the planner for a check-up to make sure you’re moving in the right direction.
Hi Jean. I recently transferred a portion of the balance on my higher interest credit card to a Slate 0% card. Is it better to focus on paying down the higher interest card or getting the balance on the 0% card paid off within the introductory offer period?
Oh Trish! I have to tell you, I have thought of this question so many times and never, ever been asked it. In the best of all possible worlds, you’d transfer all your high interest rate debt to the Slate card, then wail on it at that 0% interest rate to make as big a dent in the teaser period as possible. (You did choose well when it comes to balance transfer cards, by the way — the 15 month 0% interest rate is just about as good as it gets.)
I’m a recent widow and was left with no insurance. My house is being sold via short sale and I have moved to a small apartment, where I’ve paid the rent on time for the full year I’ve been here. I would like to open a credit card, but would like a suggestion on where to go. I know my credit rating is very poor, but I would like to get it back on track. Do you have any suggestions?
Hi Jill. I’m so sorry for your loss and for the tough time that has followed. The answer is that there are credit cards available for you. Most of them are secured cards, so called because you deposit a sum of money (usually a couple to a few hundred dollars) to secure your credit. The best of these report to all three credit bureaus on a regular basis, which enables you to build the sort of credit you need to eventually get a regular old credit card.
Among these, the folks at CardHub.com recommend the Capital One Secured Mastercard, which you can get with a deposit of as little as $49. If you’d prefer a card for which you don’t have to make a deposit, look at the Credit One Bank Credit Card with Gas Rewards (it gets around the deposit by charging an annual fee of $35 to $75.) Note: Your credit limits on both of these will be low, but your interest rate high. So whatever you get, use it as a credit-building tool. Note what your credit limit is. Never rack up purchases that account for more than 30% of it at any time. And pay it off every single month.
My husband called Chase Visa about his Marriott card (which he has had since 2002 in excellent standing) to have his 22.4% interest rate reduced (which I have done often for my card based on your recommendations– I now have 13.2% for a long time). They refused. He asked for a supervisor who also flatly refused. He told them he would cancel his card, and they did! He carried a large balance each month, and was either paying off a large portion of it or, lately, paying the total balance. We enjoyed the Marriott points, but now he says he will share my card and use his American Express instead. Is this typical in this economy? Thanks so much for your time.
Hi Jennifer. I really can’t say how typical it is. It’s been a very long time since I’ve seen a large piece of research where hundreds or thousands of people tried – at once – to get their interest rates lowered and the results were recorded. (Hey US PIRG: How about it?) Anecdotally, though, I’ve heard some stories like yours. I’m very glad your husband is paying off his balance every month – rewards, whether they’re hotel points or frequent flyer points or even cash back, are never worth what you pay in interest. What I would suggest is figuring out what kinds of rewards matter to you the most and then perhaps applying for a card that will give you a lot of them. The Amex may do the trick for that, but there are a lot of cards offering big bonuses these days just for signing on and spending a few thousand dollars in the first few months (which business travelers like your husband often do anyway). You might as well get the kind of rewards that can put you on a tropical island (or wherever you want to go) for a few days for free.
Hi Dave. Generally, no. There are a few exceptions — alimony and scholarships, for example. But perhaps the biggest is spousal income. If you have a spouse who works, you (and your spouse) can both make contributions based on that income.
Not being able to qualify for an IRA, however, doesn’t mean you shouldn’t save. Invest your money in a discretionary account just as you would an IRA, based on your age and your risk tolerance – and let the time value of money work on your behalf.
You can open a discretionary account at any major brokerage.
Is there a rule of thumb that a monthly pension payment should equal a certain amount of dollars of savings? We hear that we need X dollars for retirement, but with a pension, what might that equate to? Some of us will have pensions from previous employers and wonder what it means in terms of the amount we need to save. (For example, does $1,000 in a monthly pension = $125,000 in savings?) What are good numbers to use in planning? Thank you.
Kathie, it really all boils down to how much of your pre-retirement income you’re trying to replace. That’s what you should focus on. Recent research has shown that spending in retirement isn’t linear as previously thought. You were often told you should plan on spending 70 to 80% of your pre-retirement income in retirement. In fact, spending usually tails off after the kids go to college and leave the house and, eventually, you stop working full time. Then life gets really expensive when you hit uber old age and healthcare expenses ramp up.
That said, on average, aiming for that 80% replacement rate is probably a pretty good move. You need to head to a retirement calculator that allows you to input how much you’re expecting from Social Security and your pension as well as how much you’ve saved. The AARP’s retirement calculator – which you’ll find here – will let you do just that. It’ll run the numbers and help you figure out how much more you need to save to meet your goals.
Hi Jean. We bought our home in 1982 for $67,000 and refinanced in 2001 for $85,000. This company sold our mortgage without our knowledge in 2013 for $72,000 @ 8.5% interest. Unfortunately things happened that were beyond our control. For the past ten years I took care of my parents. They both passed away last year. Our whole life we’ve taken one step forward, three backwards. It seems when we get caught up something else happens that takes us back. Our credit is poor. We have never asked anyone for help; that’s why we are in this mess. We don’t know where to turn. Can you please point us in the right direction. Thank you.
Hi Toni. I have to admit, I can’t tell from your letter exactly where you are right now – but I can sense that it’s somewhere very difficult. And having lost one of my parents, I cannot imagine losing both – let alone in the same year. I’m so sorry for all you’re going through. In situations like these, fixing everything quickly is just not an option. The world of money just doesn’t yield results that dramatic that fast (if it did, I’d have a television show like The Biggest Loser). Rather, it’s the smaller, habitual changes that add up to something meaningful over time. Focus on controlling the things that you can control. The top three things I’d do? 1. Look at your spending and see where you can cut back. 2. Take that money and pay down high interest rate debt if you have it, or save it if you don’t. And 3. Pay your bills on time. Even if you’re just playing a little more than the minimum (a number you should try to nudge up) paying on time will help move your credit in the right direction.
In going through my 88-year-old father’s papers, I came across several capital stock certificates for 100 shares each for “Central Wyoming Oil and Uranium Corporation” dated 1954. I have tried Google searches to find out if they are indeed worth anything but have had no luck. Can you tell me if they are worth anything or what the process would be to find out? I tried the sec.gov website to no avail. Thank you in advance for any help you can give me.
Marie, you’re right — a google search of that company name turns very little up. But there are ways to research the value of paper stock certificates, which were common during your father’s time but are now largely a thing of the past.
First, you want to look at the certificate itself. Does it say cancelled on it, or contain punch holes through the paper? That likely means the certificate has already been cashed in. If you can’t find any signs of cancellation, check to see if your father’s name is on it it — if so, that’s a good start.
Often, though — as seems to be the case in this instance — the company issuing the stock no longer exists. This is common — companies frequently merge with other entities, are purchased, go out of business or end up bankrupt. But the certificate may be printed with the name of the transfer agent, which the SEC says is the best place to start your research. If no agent is listed, or that agency also no longer exists, you can contact the agency that incorporates businesses in the state where the company was located. In your case, that would be Wyoming, and the state has a handy guide to tracing old stock here. They may be able to tell you who the new transfer agent is.
There are also companies who will do this for you, though you should be aware that you’ll likely be charged a fee and you may be chasing something that has little or no value. The Wyoming document referenced above suggests a company called America West Archives, which has a subsidiary, OldStockResearch.com. They charge a research fee of $35 to $45 per company and claim a 95% success rate (keep in mind, that means they’ve turned up results — not necessarily of value — 95% of the time). If they come up with no information, you’ll receive a full refund.
Another option is Scripophily.com, which researches, buys and sells original stock and bond certificates. They charge a flat research fee of $39.95 per company, and again, if no information is turned up, you won’t be charged.
Finally, if you have a brokerage account, you may be able to get your broker to research this for you.
Keep in mind that even if you find that these certificates hold value, if your father isn’t alive anymore, you’ll need to prove that you’re the legal heir to the security. And if the certificate doesn’t have cash value, it may still have collector value, based on condition, age, design, industry and other factors. One of the services above can help you determine if this might apply in your case.
I have a friend that has been taken advantage of by an unethical broker. Because I work in the industry, I am helping her clean up the mess and file a formal complaint. She also needs help with life insurance and I am not knowledgeable enough to help her. Is there any kind of resource, akin to a fee-only planner, that she could use to evaluate her needs and determine the best option? All avenues I am aware of turn to people who have a vested interest in selling a product. Thanks.
Margaret, she’s lucky to have you! There are, in fact, fee-only insurance advisors who – like fee-only financial planners – who will help you figure out the right life insurance policy (with the lowest commission) for you. Unfortunately, there aren’t many of them. I only know of three – and I’m going to point you directly to them. Glenn Daily is in New York, NY. Peter Katt is in Mattawan, MI. And Scott Witt, whom I learned about from this Bankrate.com story, is in New Berlin, WI. I can vouch for Daily and Katt because for many years, they were sources I called whenever I was writing a story on life insurance. Some fee-online financial planners may be able to help you with this as well. You can find ones near you by using the locator tool at NAPFA.org.
My daughter and her fiancé are about to receive about $75,000 from family in England. They want to set up a joint account to have the money wired into. Do you know anything about First Trade Union Bank? Apparently it’s an Internet bank. I know that it is FDIC insured, but what else should we be concerned about?
Nothing I can think of, Ann. First Trade Union Bank isn’t just an Internet bank – although many of its customers may do business with them over the Internet. It’s one of the nation’s many community banks. Like many other community banks, it seems to have a very consumer friendly approach including a steady record of making SBA (Small Business Administration) loans for its customers and, as of mid-last year, rebating an unlimited number of monthly ATM surcharges.
If you want to focus on something, rather than the choice of bank, I’d encourage your daughter and her fiancé to understand what an opportunity that $75,000 can be. It could be the down payment on their eventual home, a jumpstart on a college fund for a future child or a substantial leap into retirement savings for them. The mistake many people make when they get a windfall is taking action too quickly. Advise them to sit on the funds for at least six months to a year until they have a plan of attack.