Combating Identity Theft

Posted on May 30, 2009 by Barry Welford

Identity theft is a particular concern for seniors. The invasion of privacy can be devastating and the steps needed to eliminate the problems caused by the identity theft can be long and onerous.

It is not just a problem for seniors. That is why the Wall Street Journal reports that Security Experts React to Obama’s Cybersecurity Report with enthusiasm. These cybersecurity concerns apply both at the national level and also for all individuals.

Several executives were encouraged by Mr. Obama’s personal remarks on what is often seen as an obscure issue. “I know how it feels to have privacy violated because it has happened to me,” he said, noting that his campaign’s emails and files were hacked last year.

“Identity theft is something that lives off in virtual land, and I think has people appropriately nervous, so I thought the president did an excellent job touching on issues people identify with,” said Ed Amoroso, AT&T’s chief security officer.

The appointment by President Obama of a cybersecurity czar will bring heightened emphasis on these issues. Nevertheless whatever improvements are made at the national and corporate level against such activities as phishing to steal personal data, the ultimate responsibility is always with the individual. Precautions must always be taken to guard against any security breaches.

If the unfortunate happens and an individual is the victim of identity theft, then it is worth ensuring that you already have in place an Identity Theft Recovery Kit. This should set out a detailed plan of what needs to be done including important phone numbers, websites, and addresses. You should also keep a good recovery log of what is done on every account in case problems arise. Such precautions when dealing with identity theft are never a waste of effort.

Online Security: White House Establishes New Cyber Czar Position (readwriteweb.com)

Technorati Tags: Barack Obama, Computer security, Identity theft, Phishing, Wall Street Journal

The Early Retirement Paradox

Posted on May 26, 2009 by Barry Welford

Seniors are living longer and for some that means that Freedom 55 offers new opportunities. Perhaps it is time to follow a second career. Or given that you are healthy and full of vigor, you may decide to stay on longer at your existing job since the company values your experience, knowledge and skills.

That was a view that was widely discussed. Given that times were tough, delaying the retirement day also meant that increased funds could be amassed to assure a long and enriched retirement when it came. Apparently that scenario is not working out for everyone.

We now read that Early retirement claims increase dramatically according to the LA Times.

Instead of seeing older workers staying on the job longer as the economy has worsened, the Social Security system is reporting a major surge in early retirement claims that could have implications for the financial security of millions of baby boomers.

Since Oct. 1 2008. claims have been running 25% ahead of last year, compared with the 15% increase that had been projected as the post-World War II generation reaches eligibility for early retirement, according to Stephen C. Goss, chief actuary for the Social Security Administration. Many of the additional retirements are probably laid-off workers who are claiming Social Security early, despite reduced benefits, because they are under immediate financial pressure. The numbers upend expectations that older Americans who sustained financial losses in the recession would work longer to rebuild their nest eggs.

The ramifications of this change in trend are profound for the new retirees, their families, the government and other social institutions that may be called upon to help support them. On top of savings ravaged by the stock market decline and the loss of home equity, many retirees now must make do with Social Security benefits reduced by as much as 25% if they retire at age 62 instead of 66.

Society and the economy can function better as people live longer, if seniors decide to continue working or even start off a second career. They can be contributors to the economy rather than needing support.

With Americans living longer, the elderly are increasingly at risk of outlasting their financial assets. That’s a serious problem for them and their families, who are often called upon to provide assistance. The full consequences of retirement decisions made in hard times will become apparent when people who retired early begin to exhaust their savings.

Technorati Tags: Freedom 55, retirement age, second career

Alarming Debt For Canadians

Posted on May 26, 2009 by Barry Welford

The latest findings on personal debt in Canada are very alarming as you can see from the headlines:

Canadians dragging around too much debt Toronto Star
CGA report: Canadians on the brink of debt spiral News1130
Canadian household debt reaches $1.3 trillion St. John’s Telegram
New survey shows Canadians are in record-setting debt 660 News
A MOUNTAIN OF DEBT ReportonBusiness.com
Debt levels ‘alarming,’ study says The Gazette (Montreal)

The CGA (Certified General Accountants) survey of 2,013 Canadians in November highlights the following situation:

Current household debt is at a "highly disturbing" level, especially considering the prospects are slim that financial security will improve in the recession. Canadian household debt is at an all-time high, reaching $1.3-trillion at the end of 2008, up dramatically from $1-trillion in 2007. That means household debt levels have climbed to $39,597 per Canadian from $23,885 in 2000 – an increase of 66 per cent in nine years.

A growing portion of household debt comes from credit cards and personal lines of credit, reflecting a rising use of credit for discretionary spending and non-durable goods. This means debt is increasingly used for consumption rather than for assets such as homes and vehicles. A CGA survey of 2,013 Canadians in November found that 58 per cent said their day-to-day living expenses are the main cause of their increasing debt, and that 21 per cent of people in debt said they can no longer manage the load.

Given that Jim Flaherty, Minister of Finance, confirms that Canada is still in a deep recession this does not bode well for the coming months.

Technorati Tags: Canada, CGA, Credit card, household debt, survey

U.S. Credit Card Industry Faces Much Greater Regulation

Posted on May 20, 2009 by Barry Welford

The CBS News headline, U.S. Tightens Screws On Credit Industry, was not unexpected.

With the government cracking down on credit card companies’ ability to increase rates and impose penalties, some wonder just how lenders will make up for the vast amounts of revenue they stand to lose.

And as credit card issuers ponder the ramifications of the proposed rule changes passed by the Senate Tuesday, they may face more bad news.

The Obama administration, trying to rein in abuses exposed by the financial crisis, is considering creation of a regulatory commission to protect consumers of financial products such as credit cards and mortgages, according to administration and industry officials.

On Tuesday, the 90 Senators passed what is being called a credit card bill of rights. This is expected to be signed into law by the end of the week. Under that legislation, lenders would have to give 45 days notice before a rate increase, extend promotional rates for at least six months, place bans on rate hikes on new cards during the first year and deny cards to anyone under 21 unless they can pay off their bills.

In Canada, earlier in the month, Jim Flaherty, Federal Finance Minister, indicated that Credit card regulations could come by the end of the month. Although the lenders may have concerns, their customers will be very supportive of these credit card changes.

Credit Cards: Behind the Consumer Rage (businessweek.com)

Technorati Tags: abuse, Credit card, Financial services

Seven Steps To Take When Late Paying Bills

Posted on May 16, 2009 by Barry Welford

Forbes suggests Seven Steps To Take If You’re Late Paying Bills. As they suggest, acting now may help you down the road.

It’s a situation all too familiar to millions of Americans these days. After years of hard work, a sudden job loss, pay cut, furlough or simple over-reliance on debt has left too little cash on hand to pay the monthly bills. More than 13 million people are currently in hock to collections agencies or are seriously considering bankruptcy, according to a recent report by the National Foundation for Credit Counseling.

If you find yourself falling behind on your bills, there are several steps you can take to help reduce the amount of money you owe and help preserve the assets you still have. The seven steps are not rocket science, but one or more are often forgotten. Here are what is suggested:

Know where you stand.
Negotiate with creditors.
Know who you’re talking with.
Only do deals you can live with.
Make sure your information is accurate.
Know your rights.
Avoid desperate measures.

For unbiased advice, turn to an organization like the National Foundation for Credit Counseling, which offers free advice from trained credit counselors.

Technorati Tags: bill collectors, Credit counseling, debt, late payments

Obama’s Housing Plan Encourages Refinancing

Posted on May 13, 2009 by Barry Welford

According to the President, the housing plan his administration has launched has contributed to a spike in the number of homeowners who are refinancing their mortgages. However critics question his statement that mortgage refinancing can be equivalent to tax cuts.

Tax analysts told FOXNews.com that lower mortgage rates actually reduces tax savings.

“While there could be overall savings by refinancing and lower monthly payments, there also could be reduced tax benefits as less interest is paid,” said Gil Charney, an analyst for The Tax Institute at H&R Block.

For those with significant equity in their home, refinancing may be a way they can ease the budget restrictions caused by the recession. Mortgages are one way in which you can get immediate funds that are repaid over a long period of time. There are many alternatives to consider but by comparing refinance mortgage rates together with all the attendant terms and conditions, a better mortgage package may be obtained.

The US Government website, makinghomeaffordable.gov, provides full information on what is possible through refinancing in making your home affordable. In particular, there is an evaluation form to determine whether the homeowner may be eligible for refinancing. If the owner is current on their mortgage payments but unable to refinance to a lower interest rate because their home value has decreased, nevertheless they may be able to refinance. It is certainly something to check out.

Technorati Tags: H&R Block, refinancing

Search the Internet for related articles:

Senior Money Memos

Personal Finance From A Senior Perspective

Monthly Archives: May 2009