The specifics

Under the new rules, credit bureaus have to provide a credit score to show borrowers who were denied a loan or given a high interest rate what score was used in making the decision. In addition, borrowers will be given a range of credit scores to know where they stand.

This rule is only given to those who were denied. Only those with relatively low credit scores can expect to learn their credit scores.

Background

Before this rule was announced, an older, similar rule, which came into effect in January, gave lenders the option to either provide a copy of the credit score or just a letter to the borrower stating that the borrower didn’t have a good enough credit score.

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Increasing salary

The military is one of the best places to earn a living. The average junior enlisted member – usually with just a high school degree – earns about $43,000 a year. And that’s excluding benefits like free medical care and a nice retirement package.

Military salaries have risen since the war in Afghanistan began, going up by 42% from 2002-2010.

Decreasing bonus

For young people who can’t find a job in the private sector, the backlog in the enlistment of the military isn’t the solution they might have hoped for, because even if they get in, chances are they might not even get the bonuses enlistees got just a few years ago.

Despite the increase in salary, bonuses have gone down substantially. In 2008, the average bonus for Army enlistees was $18,000. Last year it was less than $6,000.

Size reduction

Soon, the Army will shrink by about 22,000 people and the Marines by 15,000. Only time and the economy can tell if things will start to improve.

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Federal officials predict that more than 30 million Americans will gain coverage under the health care law passed last year. This is predicted to worsen the growing problem of a shortage of doctors.

Access to primary care is a priority for the administration to better understand the problem and make sure everyone gets the health care they deserve.

The motive

The government wants to know if every patient, regardless of whether they are on public insurance, like Medicaid, or private insurance, such as Blue Cross and Blue Shield, get the same treatment.

Although most doctors accept Medicare/Medicaid patients, a growing number of doctors have been refusing to accept them because the government repeatedly threatens to cut their fees.

In a recent study, it was found that 53 percent of family physicians and 51 percent of internal medicine physicians were not accepting new patients. When new patients would get new appointments, they would have to wait about 36-48 days.

The method

The surveys are going to be done by “mystery shoppers” posing as patients. They will call doctors’ offices and request appointments to see how long it takes for them to get the help they need.

About 4,185 doctors – 465 in each of nine states: Florida, Hawaii, Massachusetts, Minnesota, New Mexico, North Carolina, Tennessee, Texas and West Virginia – will receive calls from the mystery shoppers.

The surveys are expected to begin in a few months, with preliminary results from the survey expected next spring. Each office will be called at least twice: first, by a person who supposedly has private insurance, and second, by someone who supposedly has public insurance. Eleven percent of the doctors will be called a third time by callers identifying themselves as calling in behalf of the Department of Health and Human Services and will ask whether the doctors accept private insurance, Medicaid or Medicare, and whether they take “self-pay patients.”

Mixed response

Many doctors are not happy with the proposed secret survey because many feel like it is “spying.” Others question the use of taxpayers’ money, which will cost about $347,370 – money, doctors say, could be better spent on the training or reimbursement of primary care doctors.

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Extended or second careers

Working beyond retirement age might not be such a bad idea. You can continue to earn money and receive benefits. At the same time, you can enjoy social interaction and not worry about what you’ll do after retirement.

Less help from your employer

Employer retirement benefits have decreased over the past decades. People now need to become more responsible for financing their retirement. For example, corporate pension plans have been reduced and fewer employers are paying for retiree medical fees. Moreover, most 401(k) plans and retiree health benefits are not insured. And even after retirement, there’s a chance you’ll see your medical plan get cut back.

Make your savings last

Because of all these budget cuts, people now need to make sure that their money lasts after retiring. One way to do this is to look at your budget regularly and adjust your investments.

Manage your taxes

Tax bills are going to be one of your top expenses. You will need to pay attention to the tax rules and learn all the policies for taking money out of an IRA. You’ll need to space out your withdrawals to minimize tax bills. Also, remember to take required minimum distributions after age 70 and a half to avoid tax penalties. Pre-paying your income tax will add financial flexibility in the future as well.

Minimize fee payments

Pay closer attention to the fees you pay. Invest in low-cost passive funds and minimize the part that is being taken out by fees.

Lesser Social Security benefits

Today’s retirees will have less pre-retirement income replaced by Social Security than past retirees will. Those born in 1937 or earlier were able to claim 100% Social Security at age 65, for example. Now, those who sign up at age 65 will receive a reduced payout.

Longer retirements

The years of people spending their retirements have risen over the years. Those born in the late 40s can expect to spend an average of 19 years in retirement. Those born in the 80s are expected to average about 20.3 years.

Try it out

The important thing about retirement, aside from having financial stability, is to enjoy it. Try out different ways of retiring. You can work some more, start your own business, travel. In the end, it’s all up to you.

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Start right

Start your post-college life by setting up a payment plan for your student loans. If you’re like the average college student, you owe about $20,000. Consolidate them into one single monthly payment. You’ll not only end up paying less interest, it’s also easier to pay monthly.

Don’t rely heavily on your credit card

A credit card can often give you the impression of having money you don’t really have. Instead of using the credit card to buy yourself your new business wardrobe or to go out and have a good time with friends, use it only for emergencies.

Keep housing expenses low

One of the best ways to save money is to share the apartment living space with trusted friends or roommates. If you really can’t afford it yet, live with your parents or a relative until you save enough for your own place.

Look to mom and dad for Health Insurance

Stay on your parents’ health insurance, if you can. It is much more affordable than paying for your own. Recent laws may allow you to stay on it until you are 26.

Be economical

New college graduates tend to overspend on many things, like eating at expensive restaurants, buying new clothes, traveling or even getting an expensive apartment. But remember, you’re only starting. The best advice is to save up for the things you want.

Add income

Aside from cutting down on expenses, you can add income through freelance work. If you have skills related to your hobbies or interests, find out if you can use these to earn a little extra on the side. Look for advertisements or advertise in social media sites and online bulletin boards. You can even go the distance and offer your skills and services to your local neighborhood.

Although starting out might seem tough after spending the last four years in college, the whole experience will teach you more than any class in college.

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We’re going to make life easier for you and bust some money myths, starting with…

“Paying off your mortgage as soon as you can will lower your monthly payment.”

While this may be true in some cases, most of the time, it just isn’t. Paying off the mortgage doesn’t lower your monthly payment; it takes your cash and converts it into home equity. Once this happens, the only way to get the money is through a home equity loan—which the banks are going to charge you for.

“You’re always better off not using your credit card if you can pay in cash.”

Whoever said this must’ve forgotten to tell you that most credit cards offer benefits such as points, cash back or both. By charging with your card, you actually get rewards. And when you get a credit card, the money is usually already in the bank, so you’re safe when it comes to paying off the bill.

There is also such a thing as a zero-interest credit card where, when the bill comes, you just pay off the loan and keep the interest.
Bottom line is if you have a credit card, you should be able to pay off the bill when it comes. If not, then you’re better off using cash.

“College kids need to build credit to get a job.”

Many personal financial textbooks insist students must get a credit card to build credit in order to get a job, because employers check your credit. While building credit is important for other reasons, it isn’t for employers. After all, employers would most probably choose someone who has baggage but didn’t screw up over someone who doesn’t have baggage but did.

“To build credit, you have to carry a balance.”

As we said in the beginning of this article, this myth is false. Yet many people still believe this urban legend. What people should be hearing is carrying a balance is bad for your credit rating.

Using a secured card can help you establish or re-establish credit by compiling a good record but not to build good credit. If you want a good credit rating, you might limit the use of your card to small purchases and pay in full every month.

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The TRUE program is a one-time benefit for New Jersey residents who are not eligible for low-income programs to pay electric and natural gas bills. The maximum grant is $1,500 for both electric and gas services.

Eligibility

To be eligible for TRUE, you must meet the following requirements:

• Have a specific annual income per household type:
  o $21,672-$57,120 (one-person household)
  o $29,160-$69,853 (two-person)
  o $36,636-$85,397 (three-person)
  o $44,112-$103,034 (four-person)
  o $51,600-$109,934 (five-person)
  o $59,076-$116,834 (six-person)
  o $66,552-$123,734 (seven-person)
  o $74,040-$130,634 (eight-person)
  o $81,156-$137,534 (nine-person)
• Be 45 or more days late on your bill and/or have received a service discontinuation notice
• Show that four payments of at least $25 each have been made on your utility account within the past six months, at least three of which have been made 30 days before applying for the TRUE grant
• Been ineligible for or have not received LIHEAP or USF benefits in the last year

Required documents

You have to submit copies of the following documents in order to complete the application process:

• Social security cards for members of your household 18 and older
• Driver’s license of primary applicant
• Proof of gross income for all members of your household age 18 and over for four consecutive weeks
  o 4 paystubs if paid weekly, 2 if paid bi-weekly or bimonthly
  o For Social Security income of any kind you must provide a copy of the current awards letter
  o  Pension, child support, family contribution, TANF and GA are all considered sources of income and documentation must be provided
• For unemployment documentation, a print-out from the unemployment website which shows a weekly benefit rate (WBR) 
• If a member of the household age 18 or over does not have income, a signed statement claiming zero income must be provided
• If you own a home, a copy of your deed, property tax statement or mortgage statement
• If you rent, a copy of your lease; if you do not have one, a letter from the landlord indicating the address and occupancy status must be submitted
• Past 6 months of payment history from each utility (previous 6 months of bills or payment history statement from utility company showing a breakdown of payments made each month)
• Electric and gas bills

Application

Application forms may be done online or printed and submitted to the following address:

Affordable Housing Alliance (AHA)
59 Broad Street Eatontown, NJ 07724
Fax: 732-542-1263

If you live in Camden, Gloucester or Burlington Counties, you can apply at:

• CUI, 538 Broadway, Camden (Tel: 856-964-6887)
• UWC, 900 Broadway, Camden (Tel: 856-365-8989)
• County Center, 221 Laurel Road, Voorhees (Tel: 856-772-9100)
• Sheridan Apts, 922 Jackson Street, Camden (Tel: 856-541-442)

If you live in Bergen, Essex, Hudson, Passaic, Middlesex and Union Counties, you can apply at:

• 317 Roseville Avenue, Newark, NJ 07107 (Tel: 973-485-0796 or
  973-485-0795)
• 600 Central Avenue, East Orange, NJ 07017 (Tel: 973-485-0796 or
  973-485-0795)

Other assistance programs

Below are other additional assistance programs that provide financial assistance to New Jersey residents:

• The Universal Service Fund (USF) helps make your bills more affordable with a $5 to $150 monthly credit.
• NJ SHARES provides moderate-income residents not eligible for low-income programs with up to $300 for electric bills and $700 for natural gas heating bills.
• NJ Lifeline offers seniors and disabled adults with an annual utility credit of $225.
• Salvation Army Red Shield assists military personnel and their families with utility bills.

For those who have been locked out of the insurance market until 2014, you will have access to affordable health insurance choices through a new competitive marketplace called an Exchange. You will no longer be discriminated against based on a pre-existing condition.

What the program covers

• A broad range of health benefits will be available, including primary and specialty care, hospital care, and prescription drugs. All covered benefits are available to you, even to treat a pre-existing condition.
• There will be no higher premiums just because of your medical condition.
• Income is not a basis for eligibility.

In the following states, the PCIP is run by the Department of Health and Human Services:

• Alabama, Arizona, Delaware, Florida, Georgia, Hawaii, Idaho, Indiana, Kentucky, Louisiana, Massachusetts, Minnesota, Mississippi, Nebraska, Nevada, North Dakota, South Carolina, Tennessee, Texas, Vermont, Virginia, West Virginia, Wyoming and D.C.

The others have state-run programs whose details may vary depending on where you live.

Benefits

The PCIP offers three plan options:

• Standard Plan
• Extended Plan
• HSA Plan

These plans have different levels of premiums, calendar year deductibles, prescription deductibles and prescription copays.

Requirements

Applicants must:

• Be a citizen or national of the United States or reside in the U.S. legally.
• Have been without health coverage for at least the last six months (please note that if you currently have insurance coverage that doesn’t cover your medical condition or are enrolled in a state high-risk pool, you are not eligible for the PCIP).
• Have a pre-existing condition or have been denied coverage because of your health condition.

Application

If you live in a state where the HHS-run PCIP is active, you will need to provide a copy of one of the following documents:

• A denial letter from an insurance company licensed in your state for individual insurance coverage (not health insurance offered through a job) that is dated within the past 12 months. Or, you may provide a letter dated in the past 12 months from an insurance agent or broker licensed in your state that shows you aren’t eligible for individual insurance coverage from one or more insurance companies because of your medical condition.
• An offer of individual insurance coverage (not health insurance offered through a job) that you did not accept from an insurance company licensed in your state that is dated within the past 12 months. This offer of coverage has a rider that says your medical condition won’t be covered if you accept the offer.
• If you are under age 19, a letter dated within the past 12 months and signed by a physician, medical doctor, doctor of osteopathy, physician assistant, or nurse practitioner that is licensed to practice and says that you used to have or presently have a condition. This letter must include your name and condition and the name, license number, and state where the license is held of the physician, physician assistant, or nurse practitioner.
• If you are under age 19 OR if you live in Massachusetts or Vermont, an offer of individual insurance coverage (not health insurance offered through a job) that you did not accept from an insurance company licensed in your state that is dated within the past 12 months. This offer of coverage must show a premium that is at least twice as much as the PCIP premium (the monthly payment you make to an insurer to get and keep insurance) for the Standard Option in your state.

Recent developments

As of July 1, 2011, some PCIP enrollees will get a reduced monthly premium, depending on the state they live in. PCIP applicants will continue to have a choice of three plan options: the Standard Plan, the Extended Plan, and the HSA Plan. There will be no other changes.

Note: Current enrollees will not have the opportunity to switch plans at this time.

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The ways that the benefits are issued differ from state-to-state. But the most common form is through Electronic Benefit Transfer (EBT) cards, which work like debit cards. The benefits are mainly for food stamps, TANF, child support, among other benefits.

However, a host of media investigations found that benefits were withdrawn in casinos, liquor stores, tattoo parlors, strip clubs and other questionable locations. There’s now a huge possibility that new rules will be imposed on where the benefits can be withdrawn.

The federal government has recently introduced a bill that will require states to restrict where TANF benefits can be issued, so that benefits can’t be accessed in the places mentioned above.

States where restrictions have been made

Washington State has worked with tribal casinos to ensure EBT cards don’t work in casino ATMs and state-owned liquor stores. New Mexico limits EBT card use at casinos. Texas prohibits their use in businesses that derive 10% or more of their revenue from alcohol or entertainment.

No restrictions

Other states have been reluctant to limit where TANF benefits can be used. In Nevada, for example, many beneficiaries work or live near the casinos, so restricting their TANF or EBT access in casino ATMs is the same as penalizing them.

New Hampshire shares the same situation. And even if the state did block access at casinos, a person could go to an ATM elsewhere, get cash and go back to the casino.

Another expense

Many argue that this bill will be another added expense to an already financially troubled nation. Some also contend that the benefits that are withdrawn in casinos and liquor stores ATMs doesn’t mean the money is spent in those establishments.

Possible solution

There’s really no way to know how the money is spent even if EBT cards become unusable in ATMs in casinos and liquor stores. The only possible solution for lawmakers is improving the system again.

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Imagine yourself to be married, both you and your spouse are 60, earning about $75,000 per year, and you’ve both earned about the same amount throughout your careers. Also, imagine your spouse had irregular earnings and will be relying on the Social Security spouse’s benefit based on your earnings record.

At age 66—which is your Full Retirement Age (FRA)—your Social Security income will be roughly $2,000 per month. Your spouse would receive an additional $1,000 per month at his or her FRA for a combined income of $3,000 per month, or $36,000 per year. Now consider this: say you move in with another couple in a similar situation, in a nice three-bedroom house. Your combined income will be $72,000 per year.

Above average income

$72,000 is higher than the national average annual income of $62,857, or the median household income of $50,221, or even the average annual expenditure of $49,067 (based on the 2009 census).

So if an average American family can live on less than $72,000 a year, two resourceful couples can most probably do the same. Remember that the Social Security income will increase during inflation and that retirees pay less income tax on Social Security income.

More ways than one

There are a number of other ways to make your situation better. For example, if you suspend your Social Security income at age 66 and wait until you turn 70, your monthly income will increase to $2,640 per month (your spouse shouldn’t suspend his/her $1,000 spousal benefit income though, since there is no delayed retirement credit that will increase his/her income).

When you reach 70, and begin taking your Social Security benefits, your combined income per month will be $3,640, or $43,680 per year. Combined with the other couple, which does the same, the total income will be $87,360 per year.

Now if both couples save $2,000 per month each, for example, in 10 years you will have accumulated a little over $150,000. And assuming the other couple earns 5% annually on their savings, if they decide to start drawing on that for additional income, it could generate $6,000 per year if they withdraw just 4% of their savings, and $7,500 per year if they withdraw 5%.

Think ahead

Considering you, your spouse and the other couple will be 66 to 70 years old, you have to think about what comes with age. One or more of you will need some form of long-term care at some point, or, as a matter of course, die. So it is advisable to keep the savings invested and to save more than spend.

Of course it will help to be as healthy as possible, in order to reduce the money they’ll spend on medical and long-term care bills. You can do this by getting daily exercise, such as walking together after dinner. You can share meal responsibilities and make healthy food you can all share. You might band together to grow your own food in a vegetable garden. You could share resources, such as appliances, cars, furniture, etc. You could start your retirement with a giant yard sale to get rid of the furniture and appliances you don’t need.

Turn expenses into investments

Finally, if one or both couples own homes that can be rented, you should do so to create additional income.

This kind of arrangement is easier said than done. After all, there’s so much to be addressed, such as, compatibility, sharing expenses and savings, etc. But this is just one example of how you can be resourceful and creative to make your retirement work. It may not fit your circumstances, but what’s important is that you know that if there’s a will, there is always a way.

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