When making sure your financial house is in order, a great place to start is by checking your credit report for errors. More than 40 percent of Georgians surveyed by Georgia Credit Union Affiliates said they haven't checked their credit reports in the past year, so not enough people do it. You can request one free copy per year by visiting www.annualcreditreport.com.

Don't be shocked if you find some unpleasant surprises, as the Federal Trade Commission reports one in five people have errors on at least one of their credit reports.

Also, check your children's credit reports. The Georgia Legislature passed a bill, H.B. 915, that becomes effective January 2015 and will allow parents to block their children's Social Security numbers so no one can apply for credit in that child's name. Yes, people really do this, and it can wreak havoc on your kid's credit rating later.

It's a good time to review those quarterly retirement account statements that get dumped into a file so you know how your investments are performing and whether you need to make some changes.

Take an inventory of your valuables and get in touch with your insurance agent to make sure you're adequately covered if something awful should happen.

Create a comprehensive list of financial information, including all accounts, passwords, property deeds, insurance policies, estate plans and living wills and make sure someone you trust knows where to access the records if the need arises.

There are so many things in life we can't control. But, armed with knowledge and diligence, you can make sure your financial house is standing on solid ground.

Tips for Putting Your Financial House in Order:

1. Check your credit report carefully for any errors. You can request a free copy of your credit report by visiting www.annualcreditreport.com.

2. Reassess your retirement plan and monitor retirement accounts.

3. Examine your loans for refinancing opportunities. You may be able to lower your monthly payment or pay the loan off sooner.

4. Update your will as needed.

5. Take a video tour of your house for insurance documentation and store it in a safe deposit box.

6. Make sure your personal information is up to date with all financial vendors.

7. Update the beneficiaries for all your accounts and insurance policies.

8. Review your insurance coverage and make necessary adjustments.

9. Go through financial files and toss what you don't need. Keep tax returns forever, but throw away supporting documents after six years.

Article courtesy of Georgia Credit Union Affiliates (Angi Harben)

Back To Top

If you take money out of your 401(k) or individual retirement account too soon or too late, you'll be penalized. There are also penalties if you claim Social Security and Medicare benefits early or late, respectively. Take care to avoid these five significant retirement penalties:

IRA early withdrawal penalty: If you withdraw money from your IRA before age 591/2, you will generally have to pay a 10 percent early withdrawal penalty in addition to income tax on the amount withdrawn. So, if you withdraw $5,000 from your IRA at age 40, you'll need to pay a $500 tax penalty. However, there are a variety of ways to avoid the 10 percent penalty. If you use the money to pay for college costs or purchase a first home (up to $10,000), the penalty doesn't apply. You don't need to pay the penalty if the distribution is for some specific circumstances, including significant medical expenses that exceed 10 percent of your adjusted gross income, purchasing health insurance after a layoff or paying for expenses associated with a significant disability. You can also set up a series of annuity payments from your IRA without incurring the 10 percent penalty.

Roth IRA owners can withdraw the contributions, but not the earnings, from accounts that are at least five years old without incurring the early withdrawal penalty. "If you have a Roth, that might give you the ability to get at that money penalty-free," says Eleanor Blayney, a certified financial planner and the Consumer Fraud Protection Bureau's consumer advocate. "You can withdraw without penalty if it's money you contributed yourself."

401(k) early withdrawal penalty: The early withdrawal penalty ends for 401(k) participants is age 591/2. However, if you leave your job at age 55 or older (or age 50 for public safety employees), you can take penalty-free 401(k) withdrawals from the 401(k) associated with that employer beginning at age 55. Unlike IRAs, 401(k)s often allow you to take a loan from the account without incurring the early withdrawal penalty. However, if you lose or leave the job before the loan is paid off, the loan typically becomes due, and if you don't pay it back, the early withdrawal penalty may apply. "You can take a loan from a 401(k), assuming that your plan allows it, but that can be a little bit dangerous for some people because if you lose your job or leave the employer where the 401(k) plan is, you would have to pay it back," Blayney says. "If you can't pay it back, the amount outstanding becomes an early distribution subject to penalty."

Penalty for failing to take retirement distributions: After you turn age 701/2, withdrawals from traditional 401(k)s and IRAs are required. You can add up the required minimum distributions for all your IRAs and take the amount out of any IRA or combination of IRAs of your choice. Meanwhile, 401(k) required minimum distributions must be taken from each individual account to avoid the penalty. "If you have five IRAs, you can satisfy the IRA distributions from any of the IRAs, but if you have three other old 401(k)s from companies where you are not working anymore, you have to take it from each 401(k)," says Howard Hook, an accountant and certified financial planner for EKS Associates in Princeton, N.J. Those who fail to withdraw the correct amount are charged a steep 50 percent tax penalty in addition to regular income tax on the amount withdrawn. However, if you are still working and don't own 5 percent or more of the company you work for, you can delay RMDs from your current 401(k), but not your IRAs or any previous 401(k)s, until April 1 of the year after you retire.

Your first required minimum distribution is due by April 1 of the year after you turn 701/2, but subsequent distributions must be taken by Dec. 31 each year. If you delay your first distribution, you may need to take two distributions in the same year. "We normally say tax deferral is what you want, but taking two distributions could throw you into a higher tax bracket," Hook says. "Taking a second distribution may cause certain deductions to be lost or reduced or make more of your Social Security income taxable." There are no withdrawal requirements for Roth IRAs, so the money can be withdrawn as you see fit or left to heirs.

Early Social Security penalty: You can receive the full amount of Social Security you have earned at age 66 for most baby boomers and age 67 for everyone born in 1960 or later. Signing up before this age results in a significant reduction in benefits. For example, a worker born in 1965 who signs up for Social Security at age 62 will get 30 percent smaller payments for the rest of his life than if he waited until age 67 to sign up. "I think most people should find ways to delay it until later, as long as they are healthy and have a reasonable possibility of living into old age," Blayney says.

Medicare late enrollment penalties: There's a seven-month window around your 65th birthday when you can first sign up for Medicare Part B. If you fail to enroll during this period, your monthly premiums will increase by 10 percent for each 12-month period you were eligible for benefits but didn't claim them, and the higher premiums will last for the rest of your life. If you're still working after age 65 and get group health coverage through your job, you will need to sign up within eight months of leaving the job or losing the coverage to avoid the penalty.

"For most people, it's pretty important to sign up for Part B when you are first eligible because if you don't do it, the penalty for signing up late is quite substantial," says Jack Hoadley, a health policy analyst at Georgetown University.

Medicare Part D also has a late enrollment penalty if you don't sign up on time or have significant gaps in your prescription drug coverage after becoming eligible for Part D. The penalty increases the longer you go without coverage. Also, if you miss the six-month Medigap initial enrollment period that begins the month you turn 65 and enroll in Part B, you could lose the option to buy a Medigap policy, or it could cost significantly more than if you signed up on time.

Article courtesy of U.S. News and World Report

Back To Top

Cutting out a latte here or a dinner there makes many of us feel like we're making smart money decisions, but it's the bigger, harder-to-make choices that will result in serious savings. Lifestyle choices like downsizing a home, getting rid of a car, or opting for a less expensive college will have a far more dramatic impact on personal finances.

Just a quarter of people who took part in a new survey said they were trimming their housing expenses or college savings, according to a recent Ameriprise poll, "Financial Trade-Offs." By comparison, more than half of those surveyed said they were cutting back on everyday expenses such as eating out, entertainment and clothing, allowing them to save an average of about $175 per month. But cutting back on larger-ticket items could yield savings worth twice that.

"It can be difficult to make adjustments to your expenses in order to save more, but the extra cash can really add up over time to make a big impact," Ameriprise's vice president for wealth strategies, Suzanna de Baca, said in a statement.

The survey included responses from Americans ages 25 to 67 who had at least $25,000 in investible assets and access to an employer-sponsored retirement plan. It looked at 18 discretionary expenses, everything from personal care to electronics.

Among the respondents, millennials were more likely than baby boomers or Gen Xers to consciously cut back on all 18 expenses, but they were also more likely to take on debt while trying to balance other financial goals. More than three-quarters of millennials reported their car payments or credit card bills have made them feel stretched financially.

Despite their cost cutting, just 59 percent of millennials (versus 75 percent of boomers) have a monthly savings plan, and only 57 percent of millennials with access to employer-sponsored retirement plans are contributing enough to take full advantage of their employers' match.

Article Courtesy of The Fiscal Times

Back To Top

As technology evolves, data breaches are becoming more prevalent for consumers. Keeping an eye out for potential situations is as important to your financial health as any other money saving tip.

"While there isn't really anything consumers can do to prevent a breach, you can be on the lookout for signs that something like this has occurred," said Jeff Kopchik, a senior policy analyst with the Federal Deposit Insurance Corporation. "And, if you receive formal notice from your bank or a retailer that your credit or debit card information was stolen as a result of a breach, there are steps you can take to protect yourself."

How can you avoid losing money due to a security breach?

Review your bank and credit card statements regularly to look for suspicious transactions. If you have online access to your bank and credit card accounts, it is a good idea to check them regularly, perhaps weekly, for transactions that aren't yours. Contact your credit union, bank or credit card issuer immediately to report a problem. Debit card users in particular should promptly report a lost card or an unauthorized transaction. Unlike the federal protections for credit cards that cap losses from fraudulent charges at $50, your liability limit for a debit card could be up to $500, or more, if you don't notify your bank within two business days after discovering the loss or theft.

Periodically review your credit reports to make sure someone hasn't obtained credit in your name. By law, you can request a free copy of your credit report from each of the three major consumer reporting agencies (also known as credit bureaus) once every 12 months. Because their reports may differ, consider spreading out your requests during the year. To order a free report, go to www.AnnualCreditReport.com or call toll-free 1-877-322-8228.

If you find an unfamiliar account on your credit report, call the fraud department at the consumer reporting agency that produced it. If that account turns out to be fraudulent, consider asking for a "fraud alert" to be placed in your file at the three main credit bureaus. The alert tells lenders and other users of credit reports that you have been a victim of fraud and that they should verify any new accounts being opened in your name or changes to your existing accounts.

What if you place a fraud alert in your credit files and then you apply somewhere for a new credit card, mortgage or other loan? Expect that the lender will call you for a confirmation. However, be aware the fraud alert also may slow down the process of obtaining that new credit while the lender verifies your identity.

An additional but more serious step is to place a "credit freeze" on your credit report, which means the credit bureaus cannot provide your credit report to lenders who request it. That, in turn, may prevent criminals from obtaining credit in your name, but it also will stop you from getting new credit until you lift the freeze.

Pay attention to notices from your retailer or your bank about a security breach. In the event of a large-scale breach, you may receive notice your credit card is being replaced with one that has a new account number.

Also, the retailer may offer you free credit-monitoring services, usually for up to one year. "This service provides an excellent way to see if a cyber thief is using the stolen information to apply for new credit cards or loans in your name," Kopchik said. "And if you are not offered free credit monitoring, you may want to consider buying it at your own expense." Note: A credit-monitoring service can be costly, so research the options thoroughly and understand you can monitor your own credit reports for free, as previously described.

Be on guard against scams offering "help" after a data breach. Be very careful about responding to an unsolicited e-mail promoting credit monitoring services, since many of these offers are fraudulent. If you're interested in credit monitoring and it's not being offered for free by your retailer or bank, do your own independent research to find a reputable service.

For additional information about data breaches and protecting yourself, see an advisory from the Consumer Financial Protection Bureau at http://files.consumerfinance.gov/f/201401_cfpb_consumer-advisory_card-security.pdf.

Article courtesy of FDIC Consumer News

Back To Top