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Equifax cyberattack: How to get a free credit report, protect your identity

Credit reporting juggernaut Equifax announced Thursday that its information was compromised in a major cyberattack affecting 143 million Americans – or two-thirds of people with credit reports.

>> Read more trending news

Hackers were able to get birth dates, Social Security numbers, credit card numbers and addresses, according to Equifax, leaving some to wonder how they can protect themselves.

Here are some tips for ensuring your information is secure:

Find out whether you were affected by the hack through Equifax’s website. The site asks for a person’s last name and the last six digits of their Social Security number in order to determine whether the person was caught in the breach.

Don’t bother with Equifax’s monitoring serviceClark.com reported, noting that the company offering the service is the same one that was hacked.

“The only way to truly protect yourself is with a credit freeze,” Clark.com reported, recommending that people freeze their credit files with all three of America’s major credit reporting companies: Equifax, Experian and Transunion. Doing so does not affect whether or not a person can use already existing lines of credit.

>> Read more information on freezing your credit on Clark.com

Review your credit report and put a fraud alert on it if you are affected, Popular Mechanics suggested. A fraud alert will make it necessary for banks and credit companies to jump through extra hoops to confirm your identity. The magazine noted that a fraud alert filed with any one of America’s three credit bureaus -- Equifax, Experian and Transunion -- will be shared between the three.

>> Read more information on fraud alerts from the Federal Trade Commission

Whether or not you decide to put a fraud alert on your credit file, you can still obtain a free credit report once every 12 months from each of the credit bureaus. The reports can be obtained through annualcreditreport.com or by completing and mailing an annual credit report request form, according to the Federal Trade Commission.

>> Read more information on obtaining free credit reports from the Federal Trade Commission

You may order your reports from each of the three nationwide credit reporting companies at the same time, or you can order your report from each of the companies one at a time. The law allows you to order one free copy of your report from each of the nationwide credit reporting companies every 12 months.

Should You Cash That Convenience Check?

MoneyTipsBy Ben LuthiIt's not every day that you get a blank check in the mail, but when you do, think twice before filling it out. Credit card companies often send out these "convenience checks" ­ tied to your credit card account to encourage you to spend more. But should you use them? How convenience checks work When you need to make a purchase, fill in the blank check with the amount, and sign it. When the merchant cashes your check, the amount is charged to your credit card. Some banks allow you to request convenience checks, but they mostly show up unannounced. You may get several checks on one card account and never receive any on others; it's all up to the banks. Convenience checks often offer a 0% APR promotion lasting 6-18 months. You can use the check to pay off another credit card, buy something or just deposit it in your checking account. Situations where doing this would make sense include: You want to pay off a credit card with a balance transfer but don't want to apply for a new card. You're paying for a product or service but the merchant doesn't accept credit cards. You need to finance a large purchase but can't or don't want to pay it off immediately. The checks typically expire after a month or two, and there may be a cap on how much of your credit limit you can use. If it doesn't list a maximum, your cap would be whatever available credit you have up to the credit limit on your card. When you use a check, you'll see the transaction show up on your credit card account as usual. If there's a fee tied to the check, then that will show up separately. Convenience checks do not generate rewards like regular purchases. Check the terms Before you write the check, understand what you're getting yourself into. While you may be getting a 0% APR deal, that feature usually doesn't come free. Often, the credit card issuer will charge a fee based on the check amount ­– anywhere from 1 to 5 percent. The paperwork that comes with the checks should also let you know whether it's a true 0% APR offer or a deferred-interest offer. For example, it's deferred interest if the terms say, "pay no interest if paid in full." If it is deferred interest, you have to pay off the full balance before the promotion is over. Otherwise, you'll get charged interest on the full original balance. With true 0% APR offers, you'll only get charged interest on the balance left over after the promotion ends. When Using Credit Card Convenience Checks is a good idea "If used to pay off debt, convenience checks that come with low promotional rates work similarly to a balance transfer," says Matt Freeman, Head of Credit Card Products at Navy Federal Credit Union. "However, similar to balance transfers, consumers need to keep an eye on any transaction fees." Doing a balance transfer works best if you have the means to pay it off in full before the promotional period ends. It's also a good idea to have an established emergency fund in case something unexpected comes up. If you plan to use the convenience checks to make a large purchase, do so only if you need the item now and will have the cash to pay it off soon. When Using Credit Card Convenience Checks is a bad idea Even if you do have a goal to pay off the balance in full before the promotion ends, an unexpected expense can derail your plan. If you don't have an established emergency fund, you're taking a big risk. Using a convenience check is also a bad idea if it doesn't offer a true 0% APR promotion. Deferred-interest promotions are expensive if you don't pay the balance in full by the end. It's also not a good idea to use a convenience check if the transaction fee is high or you don't have a clear plan to pay it off before the promotional period ends. Keep your credit in mind Like any purchase or balance transfer, a convenience check uses up some of your available credit on the card. If you use too much, it could spike your credit utilization and drop your credit score. "Credit utilization ratio accounts for about 30 percent of your total credit score," says Freeman. "If you use a convenience check to pay down existing credit card balances, it should have little to no impact. However, if you use it to pay for a large ticket item, you're raising your credit utilization ratio and ultimately lowering your credit score." Experts recommend keeping your credit utilization below 30 percent to avoid a negative credit impact. You can check your credit score and read your credit report for free within minutes using Credit Manager by MoneyTips. Should you use your convenience checks? If the terms are favorable and you have a payoff plan, convenience checks can be a great tool to help you pay off high-interest debt or make a large purchase. If the terms aren't good – for example, deferred interest, no 0% APR period or a high fee – you may want to consider some alternatives. A balance transfer card can help you pay down high-interest debt, and a personal loan can help cover a large purchase. Photo ©iStockphoto.com/cstar55 Originally Posted at: https://www.moneytips.com/should-you-cash-that-convenience-checkDoes Your Credit Card Limit Measure UpWhat Happens When You Go Over Your Credit Limit?Why Are Millennials Avoiding Credit Cards?

Power Of Attorney 101

MoneyTipsPerhaps you've heard the phrase "Power of Attorney" on a TV lawyer show, or even from a real lawyer. Ever wonder what it means? What is Power of Attorney? A Power of Attorney (POA) is a document granting one person or organization (typically called an agent or attorney-in-fact) the authority to act on the behalf of another person. POAs can be general and broad in scope or limited to specific aspects such as health-care decisions or financial management. A POA is often used to outline plans in case you become incapacitated and are unable to handle your own affairs. In that case, a POA is called a durable power of attorney since it continues beyond your incapacitation. It is important that your agent for the POA be a reliable individual whom you can trust. Agents are expected to look out for your best interests and must not abuse the powers that you have given them. You can revoke your POA at any time by notifying your agent in writing and collecting all the existing copies of the POA. You may also need to notify agencies and financial institutions that the POA has been revoked. Once you have signed a POA, you can continue to make your own decisions until the conditions that trigger the POA happen (such as incapacitation). An attorney is not necessary to create a POA, but it is usually wise to consult with one. The POA defines the powers that are to be given to the agent and the conditions under which they are valid (such as durability). It is very important to write the POA precisely as per your wishes to ensure that they are carried out properly. Financial POAs are usually set up for an agent to take care of day-to-day decisions as well as major financial ones in case you are unable to make these decisions for yourself. They could include bill paying, tax obligations, disposition of property and assets, or directing investments. What You Need to Know About Being Granted Power of Attorney What if you are on the other end of a POA and named as an agent for another person? Once you assume the POA for another person, you have a fiduciary responsibility to that person to act in his or her best interests. The first item of business is to read the POA and make sure that you fully understand the powers that are being granted to you. The POA document and applicable state laws outline and define your powers. Note that you are obligated to carry out the directions in the document, even if you believe that one of those directions should be done differently. If you do not think you can carry it out, ask your principal to find another agent. When possible, continue to involve the principal in the financial decisions. It is extremely important to keep the principal's finances separate from yours and to keep meticulous records to track the principal's finances. As an agent, you must avoid conflicts of interest or even the appearance of such — not easy to do when you are the agent for a close friend or relative. When a principal's government benefits such as Social Security are involved, you will not be able to manage them as the agent without a special appointment by the agency. There may be a separate representative payee for these benefits. Co-agents are not uncommon, and co-agent relationships are sometimes directly spelled out in the POA. Regardless of how co-agents are designated, you are obligated to work with the co-agent to maintain the best interests of the principal. The Consumer Financial Protection Bureau (CFPB) has more details on your responsibilities and options in case you are asked to become an agent. See their pamphlet, "Managing Someone Else's Money" for more information. POAs are important, powerful documents that are not to be taken lightly whether you are the principal or the agent. Set up your POA carefully with appropriate legal assistance. If you are named as an agent, make sure you take your POA responsibilities seriously and be diligent in executing them. Treat the principal as you would want to be treated. Let the free Retirement Planner by MoneyTips help you calculate when you can retire without jeopardizing your lifestyle. Photo ©iStockphoto.com/Creativeye99 Originally Posted at: https://www.moneytips.com/power-of-attorney-101Estate Planning for the Rest of UsDigital Estate Planning Sites8 Important Financial Steps for Widows/Widowers to Take

Many Americans Don't Know Their Credit Score

MoneyTipsDo you know your credit score? Nearly 30% of people in a recent MoneyTips survey admitted that they didn't know this important financial metric. In addition, more than half of the people surveyed earning less than $30,000 annually didn't know their score at all. MoneyTips conducted an exclusive online survey in June of 410 people on the topic of credit. 71% of the respondents said that they knew their credit score, while 29% admitted that they didn't know. Less than 53% of adults under 30 said they knew their score, as compared to more than 75% of older adults. And 52.9% of those making $30,000 or less annually didn't know this key number. "It's no surprise that the youngest demographic aren't completely on top of their credit scores," remarked National Financial Educators Founder and Chief Education Officer Adam Carroll. "Many recent college graduates are being granted forbearance and deferment on student loans, which creates a 'kick the can down the road' mentality on that obligation. The effect on their credit score, meanwhile, can impact what they pay for car loans, whether or not they get apartments, and sometimes if they get the desired job offer. It's a critical number to know at this (or any) stage of your life." Those surveyed were asked the last time they checked their credit score, and more than 4 out of 10 (43.9%) said they had checked it within the last month. The complete results: While 71% said they knew their credit score, less than 65% had even checked their score within the last 6 months! Since scores can change frequently, it's hard to imagine that all of those people who said they knew their scores truly did. "You should check your credit report quite frequently, because it's a constantly changing thing," recommends Personal Finance Expert and Author Jordan Goodman. "You can't say, 'Oh I saw my score six months ago, so I am fine.'" You can check your credit score and read your credit report for free within minutes using Credit Manager by MoneyTips. The only age group in which more than half checked their credit score within the last month was the oldest. 51.2% of the people 70+ were diligent about checking, compared to less than 40% of the 18-29 year-olds. While none of the seniors admitted never checking their credit score, a whopping 21.8% of the 18-29 group did. "Taking care of that credit report and those credit scores are important throughout your life, because as you do business every day it can come into play," says Rod Griffin, Director of Public Education for Experian. "When a young person is 17 or 18 years old, they are about to go out on their own, it might be a good idea to help them begin to establish a credit history." Griffin continues: "Establishing it early will help ensure that ... they'll be able to get the apartment they need, they'll be able to buy that car to get to and from work, all of those things that a credit report will be helpful for." When asked, "For those who don't check regularly, why not?" respondents were given the choices: While more than half said that they did check scores regularly, 15.4% believed it wasn't important, 13.2% weren't sure how, and 11% believed it was too much of a hassle. An additional 8.3% believed that checking your credit score lowers it, which is not correct. More than 23% of adults under 30 weren't sure how to check their credit scores. Although a recent Experian survey revealed that women have better credit habits than men do, more than 16% of women weren't sure how to check their credit scores, as compared to less than 10% of men. Concluded Adam Carroll, "With rampant credit card fraud schemes occurring today, the likelihood of something derogatory showing up on your credit report is significant. Even erroneous filings to your credit report can cause your score to plummet if left unchecked. Making sure your report is clean and clear from any errors could save you tens of thousands in the long run." You can check your credit score and read your credit report for free within minutes using Credit Manager by MoneyTips. Originally Posted at: https://www.moneytips.com/many-americans-do-not-know-their-credit-score/921Credit-Reporting Agencies5 Things You Don't Know about Your Credit ScoreHow To Read Your Credit Report

How To Find Free Money Online

MoneyTipsLife can get hectic fast and people can easily allow certain tasks to fall through the cracks. Unfortunately, sometimes we never remember to complete those tasks -- or even what those tasks were -- and it can end up costing you your hard-earned money. For example, you may forget to leave a forwarding address with an old utility company that still has your deposit on file, or forget about a retirement account you had with an old employer. The good news is that websites exist to help you find and claim your forgotten money. MissingMoney.com MissingMoney.com allows you to search public records to find money that may belong to you. Searching for money is a simple process. Simply enter your first name, last name and the state in which you want to search. Missing Money will then return a list of unclaimed money that could potentially belong to you. Missing Money will list the name associated with the money on record, the last known address of the person, where the money is held, who reported the money and a rough estimate of the amount of money being held, if available. If you find money that you believe belongs to you, click on the line item, read the instructions then click on the "Yes, I Can Claim" button. Follow the instructions on the next page and you may finally be reunited with your money even though you're still in your pajamas. Looking for Life Insurance Policies Life insurance exists to help families survive financially after the passing of a loved one. Unfortunately, many loved ones are not aware of all of the insurance policies a person may have taken out during their lifetime. Unless you are able to find paperwork for the policy while searching through a loved one's estate, you may never find out about a missing life insurance policy that requires payment to the beneficiary. Luckily, an option exists to help you search for policies of which you are not aware. For individual life insurance policies (not group policies like those included in benefits at your workplace), MIB.com's lost life insurance website provides a great resource. MIB charges a $75 fee to use their Policy Locator Service, but the small fee could pay off should they find an unclaimed life insurance policy that benefits you. Old Retirement Plans Often Get Forgotten Another hectic period in our lives occurs when switching from one employer to another. Most of us worry about moving their family, getting settled into a new job and figuring out the benefits that the new company offers. However, many people forget about retirement plans at their old workplaces, especially if they did not contain a substantial amount of money. If you have lost track of a pension that you were entitled to at a previous employer, first try contacting your old employer for information regarding the plan. If that does not work, you can try searching the Employee Benefits Security Administration's website or the Pension Benefit Guaranty Corporation's website to find your plan. If you have lost track of another type of retirement plan, such as a 401(k) or an IRA, then you should search the National Registry of Unclaimed Retirement Benefits. Searching these websites for unclaimed money that rightfully belongs to you is a relatively painless process that should only take a few minutes of your time. The next time you're bored, check them out. It could be more rewarding than googling "skateboard fail videos"! Let the free Retirement Planner by MoneyTips help you calculate when you can retire without jeopardizing your lifestyle. Photo ©iStockphoto.com/LdF Originally Posted at: https://www.moneytips.com/how-to-find-free-money-online7 Top Retirement RoadblocksRetirement Plans 101SIMPLE IRAs 101

Legally Renege On Your Mortgage

MoneyTipsCongratulations! You just signed the closing papers on your mortgage loan. Terrifying, isn't it? Are you having second thoughts about your decision? If you have just signed the closing papers for a home purchase, it's too late. You have made your commitment. However, in some cases with refinancing or a home equity line of credit (HELOC), you have a short rescission period in which you may back out of the deal without penalty. The Truth in Lending Act (TILA) created the right of rescission in certain circumstances, allowing borrowers three full days to reconsider their decision and rescind the deal with no questions asked. Three things must take place before the three-day period begins: you must have signed the promissory note, received the Closing Disclosure form that summarizes the terms and conditions of your mortgage loan, and received two copies of the notice that explains your rights of rescission. Rescission applies to refinances on owner-occupied homes only (no rentals, vacation homes, or investment properties), and only when the refinancing is through a different mortgage lender than the one that provided the original mortgage loan. An exception is a cash-out refinance with the original lender, where a rescission period is available on the cash-out portion alone. Rescission is always available on a HELOC with one exception: it is not applicable when the entire credit line amount is used for a purchase transaction (such as a second mortgage). You must submit your rescission form in writing to the lender, using either the form provided with the explanation of rescission rights or a similar letter. Keep a copy of your letter and note when the letter was mailed in order to prove that your notification was within the three-day window. The first day is considered to be the first business day after the last of the three events above are completed, including Saturdays but not Sundays. Legal public holidays are also excluded. You have until midnight on the third day to rescind (but keep in mind you will need to provide proof that the written notice was at least mailed on time, a difficult task if you decide at 11pm on the third day). When the right of rescission is exercised, the lender has twenty days to refund most of the fees associated with the loan and give up claim to the property in question. The only fees that are not subject to refund are those paid by the borrower to a third party that is not considered to be part of the credit transaction (for example, building permits). Application and processing fees, appraisal and title fees, brokerage fees, and other fees directly related to the loan must be refunded. If your disclosure form or rights of rescission notice was not received at closing or contained incorrect information, it's possible that you can rescind your loan well past the three-day period (up to three years according to the Consumer Financial Protection Bureau). Find legal representation to explore your options in this case. Before signing a closing document, you should make sure that you have received the proper Closing Disclosure form and rescission rights document and have had enough time to read and understand them. Changing your mind that late in the home buying process poses many difficulties, and it puts the lender in a difficult position – but it is your right. Think about it carefully, but exercise your right of rescission if necessary. Just make sure that you do it in writing and within the proper timeframe. MoneyTips is happy to help you get free refinance quotes from top lenders. Photo ©iStockphoto.com/BrianAJackson Originally Posted at: https://www.moneytips.com/legally-renege-on-your-mortgageClosing your Home LoanThe Loan Estimate and the Closing DisclosureBuyers Beware – Mortgage Paperwork Has Increased

6 Tips For When An IRS Letter Arrives In The Mail

MoneyTipsFew things are more frightening than opening your mailbox and finding a letter from the Internal Revenue Service. You may wrack your brain wondering what you've done to receive an IRS notice. But there’s no need to pretend it didn’t arrive, or go on the lam. Relax. The IRS sends out millions of letters each year for a variety of reasons. An IRS letter does not necessarily carry bad news – and if it does, ignoring it is not going to make the situation any better. Take a deep breath, resist the urge to panic, and follow these tips to help you get past your initial shock. 1. Read The Letter Promptly – Putting off opening the letter won't help you, and delaying can even cause you harm. In many cases, the IRS is simply seeking more information or clarification of some aspect of your tax return, which makes it time-sensitive by definition. 2. Check for Incorrect Information – Review the notice for any errors such as a misspelled name or an incorrect Social Security number and compare any noted corrections or changes in your return with your original submission. These could be simple mistakes, modifications to correct errors on your original return, or signs that someone has tried to send in a fraudulent tax return in your name. If you would like to prevent tax identity theft, check out our credit monitoring service. 3. Reply Promptly When Necessary – Not all IRS notifications require a reply, but when they do, it's important to reply quickly. Typically, you will have thirty days to respond. Your response should be in writing, and you should retain copies of your correspondence, as well as any information that you send along with the correspondence – for example, proof of a particular deduction that you have claimed. 4. Address Any Required Payments – If you have underpaid your taxes and received a balance due notice, you must address the issue immediately in order to avoid penalties. If you can't pay the amount due immediately, you may qualify for additional time to pay or for alternative payment options such as installment agreements. Review your options in IRS Tax Topic 202 and contact the IRS to set up the payment options that work best for you. If you believe the payment request is in error, you can attempt to resolve your dispute within the IRS Office of Appeals, or ultimately, in Tax Court. In any case, you need to resolve the issue as quickly as possible. 5. Seek Professional Help if Needed – If you are being audited or have a serious issue with the IRS request, don't try to handle it by yourself. Depending on the situation, you may need assistance from your tax preparer, a Certified Public Accountant, or even a lawyer. 6. Keep all IRS Correspondence – Keep the IRS letter, along with any replies that you make, with your important tax records. You may need this information in case of future questions or disputes. Keep in mind that real communications with the IRS will be made by traditional mail. The IRS will not use e-mail or social media to contact you, or call you threatening to lock you up. Tax scammers often send notices by these methods, pretending to represent the IRS and demanding personal information, financial information, or payments by specific methods. Don't let scammers fool you into releasing personal information – but conversely, don't ignore mail correspondence from the IRS on the assumption that it may be a scam. The worst thing you can do with an IRS notice is to ignore it… or blow town. If you would like to monitor your credit to prevent identity theft and see your credit reports and scores, check out our credit monitoring service. Photo ©iStockphoto.com/pawel.gaul Originally Posted at: https://www.moneytips.com/6-tips-for-when-an-irs-letter-arrives-in-the-mailWhat To Do If You Are AuditedIRS Audits Fall to 11-Year LowHow Long Should Tax Returns Be Saved?

Don't Go Into Debt For Vacation

MoneyTipsYour summer vacation is supposed to be a time to relax and recharge. However, if you want to stay relaxed when you return home, make sure that you do more recharging and less charging – with your credit cards. A new survey from LearnVest.com finds that most Americans will be paying off their summer vacations for an extended period. On average, Americans spend 10% of their annual income on their vacations, and it takes an average of six months to recover from vacation expenses. Among the 74% of respondents who reported going into debt to take their vacation, the vacation debt averaged $1,108. Almost two-thirds of survey respondents said their spending on a week's vacation surpassed their monthly rent or mortgage payment. If you want to reduce your interest payments and lower your debt, try the free Debt Optimizer by MoneyTips. You don't have to be so miserly that your vacation is not enjoyable, but you can minimize the chances of an extended financial hangover from your vacation by taking some pre-emptive actions. Set a Budget – Impulse buys are great for racking up vacation debt. Limit impulse buys by setting up a realistic budget for your vacation, allocating a reasonable amount for souvenirs and for spur-of the-moment expenses. Leave a little discretionary money in the budget; otherwise, you may have a hard time sticking to your budget and decide to give up on the concept entirely. Fund Your Vacation Upfront – Start months in advance and allocate a bit each week or month toward your vacation fund. Try placing the funds in a separate account so you are less tempted to spend them on day-to-day expenses. If it looks like you may not hit your goals, reassess your plans and your budget. Consider scaling back your plans a bit – or delaying your vacation, if that's feasible. Look for Deals – If you can afford to travel in the off-season, you are likely to find significant discounts. Even in the busy season, you can find special deals by scouring travel-related websites in advance of your trip. If you are flying to your destination, buy your airline tickets far enough in advance and monitor the fares regularly for the best deal. Look for attractive cross-promotion deals between hotels, theme parks, and other attractions at your destination. Keep It Simple – Do you really need to spend large sums of money at a theme park to have fun? Look for less expensive vacation destinations that the whole family can enjoy, such as trips to state parks. Picnic lunches and snacks from the grocery store can reduce your dining expenses significantly. Check the tourism bureau at your preferred destination for free or reduced price entertainment options or promotional deals that may not be widely advertised. Consider Credit Card Rewards – If you are going into debt on vacation, at least get something back in the process. If your existing credit card has a specific rewards program with certain hotels or airlines, try to use those vendors whenever possible – but don't overspend on the front end just to get rewards on the back end. Check competing credit card offers for useful introductory offers that may make switching cards worthwhile. If you want more credit, check out MoneyTips' list of credit card offers. In essence, planning is the key to a successful vacation with minimal expense and limited stress. Find the balance of planning that allows you to keep expenses under control but still gives you the freedom you expect out of a vacation. You can certainly spend money on your vacation however you choose – but eventually, you will need to fund your permanent vacation, otherwise known as retirement. Keep that in mind as you decide whether to upgrade your vacation accommodations, dine at an expensive restaurant, or load up on overpriced souvenirs. You do want to retire eventually, don't you? Photo ©iStockphoto.com/kwanchaichaiudom Originally Posted at: https://www.moneytips.com/dont-go-into-debt-for-vacationThe Best Time to Book a FlightThe Rich To Get Their Own Airport TerminalFunding That Romantic Dream Vacation

Income Bridges 101

MoneyTipsFor those who have invested unwisely or not saved much money for retirement, the bridge to Social Security income is clear — keep working. If you still have debts you want to pay off before retirement, the free Debt Optimizer by MoneyTips can help you reduce your interest payments and lower your debt. However, if you have saved and invested wisely, you may have the option of retiring before you are eligible for Social Security. Enjoy your early retirement, but remember that you need to manage your money just as wisely through this "bridge" period between early retirement and Social Security as you have during your working years. Since your income stream will now be dependent on your investments, planning becomes more important than ever. Take these steps to make sure that you will have sufficient income to meet your needs and are truly ready for an early retirement. Determine Your Needs – Your first impulse on retirement will be to splurge, now that you have the free time to travel and do things you couldn't do while working. Resist that impulse until you evaluate your long-term needs. If you are retiring early, you may be looking at 5-10 years before Social Security kicks in and 35-40 years of total retirement. How much can you live on per year, assuming you are enjoying your retirement with travel or other expenses you did not incur before? Do you need $30,000 or $100,000? Compare this amount to your existing assets and calculate the percentage of your retirement money you will need to draw out to live on per year. A typical safe range of withdrawals is 3%-4% annually, and you will be tempted to go higher in the early years as you explore your new lifestyle. If that percentage is not enough, consider delaying your early retirement and build up your funds or be prepared to reduce your spending in the early transition years. Build a Cash Buffer – Typically, early retirement income options will be dividends, fixed-income investments such as bonds and annuities, interest on various accounts, and long-term capital gains. Aside from that, you will be dipping into some existing asset account, and dipping into retirement accounts prior to age 59-1/2 usually comes with a significant tax penalty. It is wise to have a cash buffer on hand in case of a market downturn that drains some of your growth investments — especially if your spending is at the higher part of the safety percentage range. Keep your liquidity and get at least some return by mixing cash with investments like laddered CD's and short-term bonds. A safe cash buffer holds three to five years of living expenses; adjust that amount according to your risk tolerance. Reassess Your Investments – You are now entering the transition period where safety is taking on similar importance to growth. It is time to rebalance your portfolio to reflect that strategy. Consider your investments as two separate baskets — one to meet the intermediate-term needs of safety with some income and growth, as well as another to represent longer-term growth. Harvest any poor performers for the capital gains (or losses to go against tax obligations) as part of your cash strategy and then set the general ratio of stocks to bonds according to your risk tolerance. A typical strategy is 50/50 for the intermediate term and 70% stocks for the longer-term accounts, but take into account current conditions. For example, with the extremely low interest rates available today, bond yields are poor enough that the balance may need to shift more toward equities. Set Up a Withdrawal Strategy – In general, avoid drawing out of tax-deferred accounts as long as possible to allow as much tax-deferred growth as possible and avoid any early withdrawal penalties. Plan to draw off taxable investments and Roth IRAs first. However, you must be flexible depending on your needs and the accounts you have to work with. If you are successful with this approach, you can consider extending this bridge policy beyond your Social Security qualification date and delay Social Security benefits up until age 70, allowing these benefits to increase by 8% for every year that you delay taking them. Don't give up on planning now. With some extra effort, you can successfully make your way across your "income bridge" and transition into early retirement as smoothly as possible. Let the free Retirement Planner by MoneyTips help you calculate when you can retire without jeopardizing your lifestyle. Photo ©iStockphoto.com/Ismailciydem Originally Posted at: https://www.moneytips.com/income-bridges-1017 Top Retirement Roadblocks7 Retirement MilestonesSocial Security Statements 101

How To Read Your Credit Report

MoneyTipsHave you read anything lately that was so important that it changed your life? If not, we would like to suggest something to read — your credit report. Granted, simply reading your credit report may not have any effect on your life, but failure to do so can harm your life if identity thieves are opening accounts in your name and racking up bills without your knowledge. A review of your credit reports can reveal several issues to correct, including false accounts and errors in reporting your bill payments. Erroneous data can cost you money by lowering your credit score and also potentially cause you to be denied credit cards, mortgage loans or other forms of credit. Your credit report represents a relatively comprehensive record of all of your credit activity. It contains information from any creditor that reports activity to the three major credit bureaus (Experian, Equifax, and TransUnion). Information is not automatically reported to all three agencies, so it is best to check all three reports to get the full picture. You can see all three credit reports right away by using Credit Manager by MoneyTips. Each agency's credit report differs slightly in format, but they will all contain the same basic types of information. Personal Information – Your name, addresses associated with any of your accounts, birthdate, and any other personal information such as telephone numbers or employment information. There may be multiple names including misspellings, nicknames, and maiden names. Check for any names that may be signs of errors or fraud. Any fraud alerts or personal statements that you have included should show up in this area of the report. Public Records – This section contains financial account information from legal actions that are public record. Civil judgments against you, tax liens, and bankruptcies are the types of information recorded here. Account information – This is typically split into two main categories: Accounts in Good Standing and Adverse Accounts. Up to two years of your credit activity may be available for each account. Both installment accounts (such as auto and student loans) and revolving credit accounts (such as credit cards) will be included and may have their own subheadings. Mortgage accounts may be listed separately. Each account listing contains items such as creditor information, account numbers, loan status, date opened, current balances, high balances, credit limits, estimated date of removal for installment accounts, monthly payments, and the date of last activity. Payment histories are often shown with color-coding as green for paid and yellow/red for missed or delinquent payments. Credit Inquiries – These are requests to view your credit report, including your own requests as well as those from potential creditors. One section covers soft inquiries such as your own requests or promotional inquiries that can only be seen by you; the other section covers hard inquiries based on credit applications that can be seen by both you and the requesting lender. The date of the request is noted, along with information on the requestor such as business type and date of removal (requests may remain on the report for up to 2 years). Not every creditor reports to the credit bureaus; do not be worried if you do not see all of your accounts. Focus on any information that is erroneously reported, accounts that you did not open, or unsolicited hard pulls on your credit. Errors in your personal information could be inadvertent, or a sign of someone attempting to open a false account. In either case, it's important to contact the credit bureau to get the discrepancy resolved. Similarly, review your account history for any incorrectly reported payments and anything in the adverse account section that gives an inaccurate reflection of your account. Follow up with creditors on any unsolicited hard pull that you do not recognize. You may be able to stop a fraudulent account before it can be activated. In the case of accounts that have already been opened, you must take immediate action with the creditors to close these accounts and limit the damage. If you find evidence of identity theft, apply a credit freeze on your account to prevent any more fraudulent accounts to be opened without your consent. You will need to lift the freeze temporarily to open any legitimate new accounts. By keeping up with your credit reports, you can have the peace of mind that comes with secure credit accounts — or the peace of mind that comes with stopping a thief from stealing your identity and draining your accounts. Either way, peace is yours. You can check your credit score and read your credit report for free within minutes using Credit Manager by MoneyTips. Originally Posted at: https://www.moneytips.com/how-to-read-your-credit-reportVideo: How to Resolve Negative Items on Your Credit ReportVideo: Top 2 Factors For High Credit ScoresHow Millennials Can Improve Their Credit Scores
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