Day: November 20, 2020

Personal Finance Daily: 12 million Americans to lose unemployment benefits day after Christmas and the U.S. pays the most for prescription drugs

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Hi, MarketWatchers. Don’t miss these top stories:

Personal Finance
12 million Americans will lose their unemployment benefits the day after Christmas

These Americans are in ‘grave danger’ if lawmakers leave them behind, wrote the authors of a new report.

6 tax moves to consider before the end of the year to lower your 2020 tax bill

Tax Guy has more advice on how to slim down your tax bill.

What does Joe Biden’s win mean for your year-end tax planning? Here are two strategies to consider

Tax Guy also weighs in on which of President-elect Joe Biden’s tax proposals are likely to move forward.

A grim test case on how paid-leave and child-care policies failed to close gender pay gap

Women typically need at least one extra degree to earn as much as their male colleagues.

My wife wants to pay for her sister’s $25K wedding. My future brother-in-law is blue collar — and earns more money than me

‘Five years ago, she and her sister inherited a substantial amount of money, split equally between them. Think low six figures.’

COVID-19 spread when 5 million people left Wuhan for Chinese New Year, yet 50 million Americans will still travel for Thanksgiving

The coronavirus pandemic has killed more than a quarter million people in the U.S.

The messy, legally murky eviction of a North Carolina single mother — despite the CDC’s moratorium: ‘Nobody’s enforcing it’

Thousands of evictions are moving forward across the country, even though the CDC has ostensibly banned them.

‘I lost my mom 2 months ago and I’m still in a fog’: My brother and his family moved into her home. They want more than half

‘My sister-in-law and her 2 children feel that I have “played” my brother and that it seems “fishy” that I didn’t push to sell the house long ago.’

Americans pay more for prescription drugs than anyone else. Can Amazon Pharmacy change that?

What the e-commerce behemoth’s entry into the pharmacy business could mean for consumers’ health and wealth

‘I’m nobody’s ATM’: I’m 27, successful, and always pay for my friends. How do I stop without making them angry?

‘Now that I’m a business owner and learning more about money management, I haven’t been willing to do as much lavish spending, or compensate my friends anymore.’

Elsewhere on MarketWatch
Doctors in rural hospitals speak out about COVID-19: ‘There isn’t any hospital that isn’t under siege’

“Our 25-bed critical-access hospital doesn’t have dedicated ICU beds, and it has only two ventilators,” says one in Kansas.

The Dow has completely recovered its 2020 bear-market loss. Here’s what comes next

Dow’s recovery since March is impressive but says nothing about how long the bull market will run, writes Mark Hulbert.

Mnuchin says decision to end Fed emergency programs wasn’t aimed at hurting Biden

Treasury Secretary Steven Mnuchin on Friday defended his decision to end the joint federal emergency lending program, and tried to calm critics saying his action was aimed at hamstringing the incoming Biden administration.

Retirement Weekly: COVID-19’s unspoken impact on retirement finances

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There’s an elephant in the room when discussing COVID-19’s impact on retirement finances: Death.

Most only indirectly acknowledge this elephant’s existence, by asking—under their breath—whether coronavirus-related deaths will increase enough to significantly reduce the liabilities otherwise faced by Social Security and public and private pension plans. If so, the pandemic could actually improve their long-term solvency.

Grossly…

Retirement Weekly: Pay more, live longer in Medicare Advantage plans

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You get what you pay for. It’s something we believe instinctively, often without much evidence to support it.

But paying more for the right Medicare Advantage plan can actually help you live longer.

A new study by scholars at Northwestern, Yale, Brown, and the University of Chicago found that more costly Medicare Advantage plans that offer…

Retirement Weekly: Wrapping up 2020: Now is time for a financial reset

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If you had asked me a year ago what I’d be doing in 2020, I might have told you about my upcoming professional projects, volunteer engagements, and travel plans. I never could have imagined that we’d be facing a global health crisis and the economic fallout thereof.

As the leader of a Financial Wellness business, I could have also shared some predictions about the changing nature of work, but I could not have anticipated the complete overhaul we’ve experienced. In my role, I am acutely aware of what the events of 2020 have…

The Margin: Good news: Thanksgiving dinner is the cheapest it’s been in 10 years

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While the pandemic is transforming the way many people will be celebrating Thanksgiving this year, here’s one change to be thankful for: the cost of buying the turkey and the trimmings to feed your family is the lowest it’s been in 10 years.

That’s according to the latest American Farm Bureau Federation survey, which itemizes the average cost of several dishes traditionally served at Thanksgiving. The Farm Bureau’s shopping list includes enough turkey, stuffing, sweet potatoes, rolls with butter, peas, cranberries, a vegetable tray, pumpkin pie with whipped cream, coffee and milk to feed 10 people — with plenty of leftovers, of course.

And the 35th annual survey finds that this year’s feast will run $46.90 on average, or less than $5 per plate, which is $2.01 cheaper than last year’s average of $48.91. In fact, the Farm Bureau’s Thanksgiving shopping list this year is the cheapest that it’s been since 2010.

Why? Because the turkey isn’t gobbling up nearly as much of the budget as it has in the past.

AFBF Communications (AFBF)

“Pricing whole turkeys as ‘loss leaders’ to entice shoppers and move product is a strategy we’re seeing retailers use that’s increasingly common the closer we get to the holiday,” explained the Farm Bureau’s top economist, Dr. John Newton, in a statement.

That’s because some people are scaling down the size of their holiday dinners this year as health officials including the U.S. Centers for Disease Control and Prevention (CDC) strongly urge Americans to avoid traveling or visiting with friends and extended family for Thanksgiving this year as COVID-19 cases and hospitalizations have surged across the country.

Read:‘We’re alarmed’: CDC issues blunt statement against travel this Thanksgiving

So now smaller turkeys for smaller gatherings are in high demand — and they are increasingly hard to find. So it’s not surprising, then, that retailers would offer discounts on turkeys to encourage shoppers to buy bigger birds anyway — and enjoy a lot of leftovers.

As a result, turkeys are available for roughly $1.21 a pound by the Farm Bureau’s calculations, which is down 7% from least year, meaning a 16-pound bird will run about $19.39 on average.

Shoppers will be shelling out less for sweet potatoes and whipping cream this year, as well, which are 31 and 34 cents cheaper, respectively. But they’ll fork over slightly more for cubed stuffing (13 cents higher) rolls (16 cents higher) and pumpkin pie mix (7 cents more).

Keep in mind that shoppers could spend significantly more in expensive metros like NYC or San Francisco, of course, and bagging organic products could also drive up the cost.

Read:New York butchers and caterers say customers are flocking to smaller-than-usual Thanksgiving turkeys

But bargains can certainly be found by shopping around. The German grocery chain Aldi has boasted that shoppers can find everything they need for Thanksgiving for just $30 this year, including a Butterball SEB, -1.12%   turkey, bagged stuffing, sweet potatoes, Hawaiian sweet rolls, frozen peas, fresh cranberries, carrots, celery, canned pumpkin pie mix, pie crust, whipped cream and a gallon of whole milk.

The Farm Bureau calculated the cost of this year’s Thanksgiving dinner by drawing on more than 230 surveys featuring pricing data from all 50 states. Farm Bureau volunteer shoppers also checked prices online using grocery store apps and websites, because more folks are shopping online during the pandemic. And these volunteer shoppers looked for the best possible prices without using special promotional coupons or purchase deals, meaning you can certainly take advantage of these kinds of discounts while doing your own shopping.

Despite health officials asking Americans to stay home for the holiday, AAA, formerly known as the American Automobile Association, estimates that 50 million people will travel over the “Thanksgiving holiday travel period,” a five-day stretch from Wednesday, Nov. 25 to Sunday, Nov. 29.

What’s more, most Americans say they will ignore the CDC’s advice and host non-household members for Thanksgiving anyway, according to Nielsen, although 70% of them will be feeding six people or less.

If you absolutely must travel for Thanksgiving despite the CDC guidance, here are some ways to reduce the risk of either contracting the virus or spreading it to your friends and family.

Or if you find yourself suddenly throwing together a smaller Turkey Day dinner at the last minute, here are 16 ways to get your ingredients together — including online and contact-free options.

NerdWallet: How to get your parents off your student loans

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This article is reprinted by permission from NerdWallet.

Baby boomers now owe the most student debt, according to new data from the financial services company Fidelity. Their average outstanding loan balance: $75,000.

The research says that’s due in part to federal parent PLUS loans. According to the most recent data from the Department of Education, more than 3.5 million parents nationwide have these loans, which can be borrowed on behalf of their children.

If a parent took out a loan for your education — or helped you get a loan by cosigning — there’s a way to return the favor: let them off the hook for it.

You can do this by refinancing the loans in your name or applying for cosigner release, depending on which type of loan your parent has. Here’s how both options work.

Refinance in your name

If your parent has federal loans, the only way to transfer parent PLUS loans is to refinance with a private lender. This will replace your parent’s loan with a new private loan in your name.

Jon McMaken, 27, of Dayton, Ohio, says he felt “a moral responsibility” to take over the roughly $130,000 his father owed in PLUS loans. “It’s my loan, really,” he says.

Also see: President-elect Joe Biden has signaled he’s open to canceling student-loan debt — the question is when and how much

McMaken had been repaying those loans on a federal graduated payment plan. He decided to refinance because it would not only put the loans in his name but also reduce their interest rate.

“It was a lower payment for less time,” he says.

Refinancing can save you money. But there are drawbacks to refinancing PLUS loans, like losing access to benefits such as income-driven repayment plans and loan forgiveness programs. Private student loans don’t offer these.

But eligibility for those options depends on the borrower — and for PLUS loans, that’s the parent. Since his father wouldn’t qualify for Public Service Loan Forgiveness and made too much money for income-based payments to be affordable, McMaken said he didn’t mind forfeiting those benefits.

He did consider whether he wanted to give up the potential for the loan to be discharged if his dad died. But McMaken says his father is in his 50s and healthy.

“I don’t think that’s going to happen anytime soon,” he says.

Release your cosigner

If your parent cosigned a private student loan, you can refinance it to remove their name.

But if you can’t qualify to refinance — or if the new loan will be more expensive — most private lenders will also release your cosigner without changing your loan’s terms.

The requirements for cosigner release vary by lender. You’ll typically need to meet the original underwriting criteria of the loan, which means you’ll likely need to demonstrate steady income and pass a credit check.

Don’t miss: I have nearly $600,000 in student debt after getting four college degrees. Can I still buy a home?

Lenders also usually require you to make a set number of payments before applying.

For example, Sallie Mae has one of the shortest windows, requiring just 12 payments. A spokesperson for the lender said Sallie Mae does not disclose how many borrowers release their cosigner or how long it takes.

Some borrowers may get tripped up because payments must also be consecutive, on-time and in full. That happened to Angela Lett, 45, from Boston, when she wanted to release her cosigner.

“The big (challenge) for me was life interfered,” she says. “I had two periods of unemployment.”

Lett had to make reduced payments on some of her loans during that time, and temporarily suspended others through forbearance. This restarted the payment count she needed to qualify.

Eventually, she released her father from the debt — five years after first looking into this option.

Lett says borrowers interested in cosigner release should pay attention to the lender’s requirements and their own timeline.

“Make sure that you’re reviewing that information regularly,” she says.

Refinance, then release

Lett says she didn’t look into refinancing because her interest rate was already low. But refinancing can be a better option for private loan borrowers.

“Cosigner release was a helpful product feature back when student loan refinancing didn’t exist,” said Scarlett Li, general manager of private student loans at Earnest, in an email. Earnest is one of the few private lenders that doesn’t offer cosigner release.

Li says those programs lack the additional benefits of refinancing, such as changing your loan’s terms and saving you money.

For example, refinancing $130,000 from 7% to 5% would reduce your monthly payments by $131 and save you $15,667 in interest, assuming a 10-year repayment plan.

You’ll typically need a credit score in at least the high 600s and a debt-to-income ratio below 50% to refinance. If you don’t meet those criteria, your cosigner may be able to help you qualify again. In that instance, make sure to understand the details of the lender’s cosigner release program if that remains your eventual goal. You could also eventually refinance again on your own. But with refinance rates near historic lows, you may not qualify for a better deal in the future.

More from NerdWallet:

Ryan Lane is a writer at NerdWallet. Email: rlane@nerdwallet.com.

NerdWallet: This is one of the most important and difficult calculations in retirement planning

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This article is reprinted by permission from NerdWallet.

Social Security’s life expectancy calculator predicts I’ll live to about 86. An insurance company’s version says I should expect to die at 98. A longevity calculator created by actuaries demurs, putting the odds at only 32% that I’ll make it to 95.

Eventually, I’ll find out which life expectancy calculator was most accurate. Meanwhile, the different results help illustrate one of the most important and difficult calculations in retirement planning: figuring out when it will end.

People who underestimate their life expectancy could save too little for retirement and run short of cash. People who overestimate how long they’ll live might stay in the workforce longer than they want to or spend less in retirement than they could.

Why life expectancy matters

Assumptions about life expectancy can make a dramatic difference in retirement strategies. For example, people who expect their retirement to last 20 years could withdraw 4.7% of their nest egg the first year and have a 90% chance their money would last, according to calculations by David Blanchett, head of retirement research at Morningstar MORN, +0.93%  , an investment research firm. To have a similar success rate with a 30-year retirement, the initial withdrawal would have to drop to 3%.

Given those assumptions, someone who wanted to withdraw $25,000 the first year from their retirement funds would need to save about $532,000 to fund a 20-year retirement. Planning for a 30-year retirement would mean saving $833,000, or about 57% more.

Life expectancy also can be a factor in when people should start Social Security, which can start as early as 62 years old. But most people live long enough that the larger checks they can get from delaying their applications at least until full retirement age, which is currently 66 and rising to 67, more than offset the smaller checks they give up in the meantime. But those in poor health with shorter life expectancies may want to start getting their checks earlier.

How life expectancies can differ

The first thing to keep in mind is that the longer you live, the longer you’re likely to live. At birth, the average U.S. male has a life expectancy of about 76 years and the average female 81 years, according to the Social Security Administration. If you make it to 65, though, the average man can expect to live to nearly 83 and an average woman to 85.

Also read: I’m 60, my wife thinks ‘money is for spending,’ I just lost my job and plan to retire — how can we avoid money fights?

Also, married couples need to plan for longer lifespans. That’s not only because married people live longer than singles, but also because the chance of either person being alive at a certain age is typically greater than their individual chances. There’s a 50% chance that at least one member of a married couple, both age 65, will be alive at 92, according to the Society of Actuaries.

Other factors can add or subtract years from someone’s life expectancy. The more income and education you have, the longer you are likely to live. Race, lifestyle, health and family history play significant roles too.

Some life expectancy calculators, like the Longevity Illustrator created by the Society of Actuaries and the American Academy of Actuaries, use just a few of these factors. Others, such as the Living to 100 calculator, pose dozens of questions about various aspects of your life, health and family members’ health. (Living to 100 predicted I’d make it to 95, by the way.)

Interestingly, few calculators ask about race, even though that can have a profound impact on life expectancy even when controlling for other factors, such as education and income. For example, one study found that Black men and women with 16 or more years of education lived on average 4.2 years less than similarly educated whites and 6.1 years less than Hispanics with the same level of education.

How financial planners estimate life expectancy

Many financial planners, whose clients tend to have higher incomes, use age 90 or 95 as default life expectancies, Morningstar research has found. Certified financial planner Malcolm Ethridge of Rockville, Maryland, uses age 99. He acknowledges that few of his clients are likely to reach that age, but he prefers to err on the conservative side.

Related: Where you live may affect how many years you have left

CFP and physician Carolyn McClanahan of Jacksonville, Florida, takes a different approach that factors in the client’s financial resources, health and family history. If a client’s funds are projected to run out in their mid-80s and they’re in good health or have long-lived relatives, for example, McClanahan will help them work out a Plan B.

“We discuss potential ways to reduce spending in the future or the possibility of tapping home equity at some point,” McClanahan says.

Morningstar’s Blanchett suggests another option: Create a personalized estimate using a life expectancy calculator that at least factors in gender, smoking status, income and health, then add a few years to create a cushion. Based on his research, he suggests adding five years to the personalized life expectancy estimate for a single person. For married couples, he recommends adding eight years to the longer of the two life expectancies.

Read next: Want to retire rich? Start by unlearning some conventional wisdom

We can’t know for sure when retirement will end — only that it will. A reasonable estimate of when helps us know how much to save and spend in the meantime.

More from NerdWallet:

Liz Weston is a writer at NerdWallet. Email: lweston@nerdwallet.com. Twitter: @lizweston.