Student loan debt and Social Security

How important is it to pay off student loan debt? Well many people don’t realize that the Federal government can garnish your Social Security check to pay off federal student loans. The Department of Education, which provides federal student loans to borrowers, say it tries to work out payment plans with people who fall behind on their loans. A spokesman for the department, said that accounts aren’t sent off to collections until almost two years of non-payment; if collection doesn’t yield results, the loan balance goes to the Treasury Department, which can reduce Social Security checks. For its part, the Treasury Department said it reaches out to borrowers twice to set up a payment plan or otherwise resolve their debt before offsetting money from their Social Security check. And the Treasury won’t withhold money from monthly checks that total $750 or less. Sometimes student loan debt is from someone co-signing for a child or grandchild, sometimes it’s from someone seeking higher education later in life. Just be aware student loan debt can follow you right into retirement. 

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Highlights for July 28 Your Safe Money Show

On last week’s show we talked about what to do with a 401(k) when you leave a job. Well this week I want to touch on what to do about penalties with retirement accounts if you forget to take RMD's when you’re supposed to.
This is a great time of year to do upgrades to your home that can save you money in the long run, and there’s a risk that can sink your home and finances, I'll explain.
Tune in at 95.5FM KBEK at 7:30 a.m. Saturdays. They stream live at kbek.com. Hear recent shows and more by going to yoursafemoneyshow.com.

401(k) options when leaving a job

Compound Interest

Albert Einstein was once quoted as saying “Compound interest is the eighth wonder of the world. He who understands it, earns it ... he who doesn't ... pays it.” To understand the quote we need to get the definition of “compound interest”. It is interest paid both on the original amount of money and on the interest it has already earned. Simple interest, on the other hand, is the interest on the original principle only. Compound interest is applied to both loans and deposit accounts. Compound interest essentially means "interest on the interest" and is the reason many investors are so successful. You want savings to compound as often as possible. It's better if you compound quarterly rather than annually when you're saving money. If you're borrowing, just the opposite applies. Compound interest and time go hand in hand. Because as time goes on you will keep collecting interest and you can reinvest that interest and get more interest. That is the magic that is compounding interest! The great thing about compounding is that it doesn't require additional work on your part: you just sit back and watch your money grow.  

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Your Guide to Social Security

Get your free copy of "Your Guide to Social Security" by going to the contact us section at the home page of yoursafemoneyshow.com.

Highlights for July 21 Your Safe Money Show

Most of the time we just keep storing “stuff” and as we age the reality is unless it’s an heirloom or something you know your children will want, maybe it’s time to clear it out. We’ll go into detail on how to start this process.
Also, what should you do if you have a financial emergency in retirement and loneliness is a real problem for many in retirement I’ll have suggestions I think will help. 
Tune in at 7:30 a.m. at 95.5 FM KBEK. They stream live at kbek.com.Hear recent shows at our podcast page at yoursafemoneyshow.com.

Debt in retirement

Setting financial boundaries with adult children

When adult children are living at home for whatever reason, it’s good to have some kind of an end game and set financial boundaries.
First, it’s important to determine if you’re supporting or enabling your adult child.
Next, decide what you will and won’t pay for, this will vary in each family. The important piece is putting on paper what you agree to and reexamine the document on a regular basis or as the situation changes. The focus should be on getting the adult child to a point where they can live independently. Sometimes they can finally move out and pay most of their bills, but they might need help with insurance, for example. Again, each family has to go over a budget and decide what will work for them.
Having expectations and holding to an explicate time frame will keep everyone on the same page and lessen the chance for resentment.
The key is to get the adult child on their own and the parents back to saving for their retirement.

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Highlights for July 14 Your Safe Money Show

On this week's (July 14) edition of Your Safe Money Show, we will be looking at a couple specific details inside Medicare. We’ll examine prescription drug costs and we’ll also look at misunderstanding what is and isn’t covered with Medicare. Medicare has so many parts to it and today so many people base when they can retire on when they start Medicare, so it’s important to have as much information as possible. And I have a retirement IQ test for you, with true or false answers that I think you’ll find interesting. 
Tune in at 95.5FM KBEK at 7:30 a.m. Saturday's. They also stream live at kbek.com.
Hear recent shows at the podcast page at kbek.com.

Setting financial boundaries with adult children

Does you health insurance cover you overseas?

If you’re traveling abroad this summer, the last thing you probably want to think about is what you’ll do if you get sick or injured. But experts say 15 percent of travelers can have some kind of medical problem on their journey—and depending on your destination, your U.S. health insurance may not be much use. So, here’s what you need to know. Check your existing health plan. Coverage varies by health insurer and plan, so you must contact your carrier to get the details of your specific policy. After you find out what coverage you have or don’t have, you should consider filling the holes with a supplemental international travel health insurance plan. Travel health insurance policies typically don’t cover pre-existing conditions. But you can buy a waiver of that exclusion, and you should consider doing so if you’ve had a change in your health, treatment, or medicines in the 180 days before you buy the coverage. Even if you’re covered by your regular U.S. health policy and supplemental travel health insurance, you should be ready to pay up front for medical care you receive abroad. You and your travel itinerary are unique, so you want to have multiple health plans and carriers to choose from, to tailor coverage to your exact needs. If you have questions call 320-679-5183. 

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Highlights for Saturday July 7 Your Safe Money Show

Money can cause problems in relationships, especially family connections, I’ll have what NOT to do with money and family. 
Financial elder abuse is a real concern and we’ll explain that in more detail. 
Plus, before you retire you need to have “the talk” with your children about your retirement.
Tune in at 95.5 FM, KBEK at 7:30 a.m. on Saturdays. They stream live at kbek.com.

Happy 4th!

Everyone at Sjoberg & Holmstrom Financial Services and Your Safe Money Show wish you a safe and enjoyable July 4th. Our office will be closed from the 4th through the 6th. We will reopen at 8 a.m. Monday July 9th. We will monitor messages at 320-679-5183

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