Author: Maurie Backman

Close to retirement with a nest egg of more than $2 million? No wonder you’re thinking about retiring! To put this in perspective, you’re 58 years old with a $2.5 million saved in an investment portfolio — this is more than four times the savings for the average Canadian. According to Statistics Canada, the average nest egg is closer to $573,040.

But wait, there’s more! Once you’re 60, you can start collecting payments from the Canada Pension Plan (CPP), albeit at a reduced rate. If you opt to hold off collecting CPP (you can delay until age 70), the more government payment you’re entitled to each month.

Based on these factors, there’s a really good chance that you might be able to live off of the dividends produced by your investment portfolio without touching the $2.5 million principal, but you still need to manage your portfolio and make smart money decisions.

Pay attention to diversification to keep your dividend income up

With a dividend yield of at least 3.2%, a $2.5-million portfolio could easily generate $80,000 in annual dividends. That kind of yield is doable if you diversify beyond a basic broad-based exchange-traded fund (ETF) and focus on stocks and other assets with higher-than-average dividends.

For investors comfortable with picking and trading stocks, keep in mind that over time a portfolio loaded with growth stocks can experience more volatility due to market growth. For instance, the value of specific stocks in your portfolio can grow so much that the portfolio is overweighted with certain holdings or assets. Also, companies experiencing rapid growth and accelerated gains don’t always pay high dividends because they reinvest their profits to fuel growth and boost stock prices. Plus, companies are not obligated to raise dividends over time, nor are dividend increases guaranteed to match inflation.

For that reason, you need to keep tabs on a portfolio of dividend-paying stocks. A good bet is to rebalance your portfolio on a quarterly basis — either on your own or with a financial adviser.

Another good option is to add other income-generating asset, such as REITs, or real estate investment trusts. REITs are a great choice for those seeking regular income since REITs are required to pay out 90% of their taxable income to shareholders each year. That means adding REITs into your portfolio will help keep your monthly income stable and allow you to avoid dipping into the principal to pay living expenses during your retirement years.

Keep an eye on inflation

Inflation could impact your investment income dramatically. For instance, if you collect $80,000 in income from your portfolio when you’re 60, and collect the same amount when you are 80, inflation over the years will erode the purchasing power of that money and force you to adjust your spending as time goes on — or dip into your principal investment amount.

The Bank of Canada and the federal government has long targeted a 2% annual inflation rate, the midpoint between 1% to 3%, but even a 2% inflation can erode the spending power of $80,000. And things can happen. Remember that the stimulus policies amid the pandemic rapidly drove the cost of goods and services above 2% and other circumstances can always prompt quick price increases.

Consider taxes

Consider tax implications in your dividend calculations. If the dividends are distributed in a non-registered account, you’ll have to pay full tax on the earnings. The good news is the Canada Revenue Agency does tax dividend income more favourably than other forms of income — as long as the dividends earned meet the CRA’s criteria.

Another option is to shelter your earnings in a registered account, such as a registered retirement savings plan (RRSP) or Tax-Free Savings Account (TFSA). Just be sure you understand when and where it make sense to shelter dividend income in a registered account. To help

On the other hand, if you have a traditional RRSP, you only pay taxes on dividends when you withdraw them.

Your taxes will depend on your filing status and income, as well as what tax thresholds look like in the future. If you’re a single tax filer and your income is between $57,375 and $114,750, then you’re looking at a tax rate of about 7.56% for eligible dividends and 13.19% for non-eligible dividends. Remember that tax laws and rates can change over time. It’s a good idea to consult a financial adviser to plan your short- and long-term retirement strategy.

Sources

1. Statistics Canada: Assets and debts held by economic family type, by age group, Canada, provinces and selected census metropolitan areas, Survey of Financial Security (x 1,000,000) (Oct 29, 2024)

2. Tax Tips: Canada 2025 and 2024 Tax Rates & Tax Brackets

This article I’m 58 and plan to retire in 5 years with a portfolio worth $2.5 million. I expect annual dividend income of $80K but worry this strategy too riskyoriginally appeared on Money.ca

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

Taking up residence in a mobile home park can be an economical means of putting a roof over one’s head.

But more than 50 families at County Road Mobile Home Park in Houston, Texas, were displaced after the land they were living on was sold, according to KHOU 11 News. Residents had until April 8 to move out, and some were forced to spend thousands of dollars to relocate.

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Marta De La Garza, who lived in the park with her family for five years, says she had to shell out $9,000 — $3,000 for transportation and $6,000 to set up utilities — to move to a new location.

"We had to pay for the people who moved the mobile home. We had to pay a plumber again. We had to pay for electricity again," she told the local broadcaster in a story published April 9. "It was a nightmare."

Moving costs may also not have been the only financial challenges some residents had to face. Here’s the story behind the challenging evictions, plus ways you can protect yourself as a tenant.

A horrible experience

Residents of County Road Mobile Home Park received eviction notices in September after the property was purchased by a company named Summit Acquisitions, per KHOU 11 News. They were first told they would need to vacate the property by the end of 2024, but that deadline was then extended until the spring.

The forced move has been devastating for several residents, including Frankie Schwarzburg, who says her trailer was damaged beyond repair during transport and is no longer habitable.

"I cannot live in my trailer," she told KHOU 11 News. "I’m out $15,000 and a home."

In addition, the broadcaster reports community advocates say some former tenants were mistakenly charged rent in March and April, even after leaving, while others have been kept waiting for their security deposits to be returned.

"They’re being charged for a place they can’t live anymore," Damaris Gonzalez of the Texas Organizing Project told KHOU 11 News.

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Former residents are calling on legislators to strengthen rights for mobile home owners. State Sen. Molly Cook told the broadcaster she’s introduced a number of bills aimed at addressing these issues.

"I don’t hear people talking about manufactured homes enough," Cook told KHOU 11 News. "The reality is that this is what makes the American dream accessible to so many Texans."

The broadcaster says neither the former property manager nor the new owners immediately responded to requests for comment.

Know your rights as a tenant

If you’re facing eviction, it’s important to understand your rights. You should know that while you can be evicted for failing to comply with the terms of your lease, your landlord can also choose not to renew your lease.

Different states may have different laws regarding evictions. In Texas, for example, you’ll typically be given a notice to vacate. This is not an eviction, and your landlord must give at least three days to vacate. If you don’t move out by that deadline, your landlord can file an eviction suit with the court.

From there, you may have to appear in court to try to state your case (assuming you want to stay in your home). After a judgment is made, either side has the option to appeal the decision within five days. If you lose and don’t appeal yet refuse to move, your landlord can ask the court for a writ of possession and you’ll then have 24 hours to vacate the property. If you don’t, your belongings may then be removed from the property.

It’s important to understand how the eviction process works. If you feel you need help with your case, you may want to consider consulting an attorney.

It’s also important to keep detailed records of communications between you and your landlord in an eviction situation. For example, if you’re being evicted due to violating a lease term and you can prove you didn’t, that’s something to bring to your eviction hearing. You should also document any interaction between you and your landlord where you feel your rights as a tenant were violated.

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Money doesn’t have to be complicated — sign up for the free Moneywise newsletter for actionable finance tips and news you can use. Join now.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

Many people look forward to retirement and can’t wait to kick off that chapter in life. But for some people, that part of the story isn’t appealing.

If you’re 63, you’re at a time when it is reasonable to consider your financial stability during retirement. Even though you haven’t hit 65, you’re still old enough to collect the Canada Pension Plan (CPP) benefit, although you’ll be looking at a reduced monthly sum since each year you delay, until age 70, the more you’ll earn.

If you have a decent amount of savings or a pension, you could retire at 63 or shortly thereafter without worry. But it’s not just the financials you’ll need to think about. There’s your mental health and loneliness to consider — aspects of retirement that should not be overlooked.

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Forever young

It’s easy to imagine retirement as being carefree. However, the hard truth is that retirement has the potential to be unfulfilling.

In a 2024 Statistics Canada survey, 61.5% of Canadian aged 65 and older described themselves as satisfied with their lives, compared to 48% for those under 65. However, StatsCan also estimates that between 19% and 24% of those aged 65 and up feel isolated from others, wishing that they could participate in more social activities, illustrating how isolating retirement can be without the community a career may bring to someone.

There’s also the feeling of purpose. Many find that their identities are tied to their jobs, so when they retire a part of themselves disappears. StatsCan found that of all working Canadians aged 65 to 74, 21% were employed in 2022, with 9% doing so by necessity and 12% doing so by choice.

A work schedule also provides structure. In the absence of habit, it’s easy for retirees to shut themselves in their homes, thereby adding to their isolation and boredom.

That’s why experts argue it’s smart to avoid sunsetting a career. Aside from the financial stress and a lack of a steady income, the mental and emotional toll can make retirement unpleasant, even when money isn’t a concern.

Inflation, scarcity and how to invest

Although some might delay retirement due to social or emotional concerns, many delay retirement due to financial woes.

CPP Investments reported that 61% of Canadians worry more about running out of money during their retirement. Delaying retirement allows them to boost their savings and leave their nest egg untapped.

That same CPP Investments survey reveals how high cost of living due to inflation have Canadians concerned about their savings.

Given that CPP benefits only make up about 33% of a person’s pre-retirement income, it’s easy to see why many of them would opt to postpone retirement and keep plugging away at their jobs in order to get ahead of economic hurdles.

There’s also a general lack of savings to consider. A 2023 Healthcare of Ontario Pension Plan (HOOPP) survey found that 44% of working Canadians have not set aside money for retirement that year, with 32% never having set aside money for retirement at all. Delaying CPP boosts monthly benefits by 8.4% per month for each year until 70. But it’s hard to stave off CPP when you don’t have a paycheque.

Some steps can help alleviate the financial burdens that cause Canadians to delay retirement. Boosting savings can address scarcity fears, as can working with a financial advisor to establish a safe withdrawal rate.

Investing strategically can help combat those inflation fears. A portfolio of income-producing assets like bonds and dividends can help retirees keep up with inflation, even when it’s higher than usual.

Stick to your vision

Retirement doesn’t just have financial implications, it can have an emotional impact. One of the best ways to stave off existential dread is to figure out what you want to do with your life after work.

Maybe you’d like to volunteer for a charitable organization, or maybe you’d like to move closer to your adult children to help take care of your grandkids. The key is to stick to your vision and keep yourself occupied.

Having a support network is also important. Before retirement, see what community resources are available to you, whether through a senior centre or a place of worship. If you can’t find one within your vicinity, you may want to consider moving to a senior community that can nurture your social needs, if you can afford it.

One final thing to consider cutting your hours of work back through a part-time job or consulting position; maintain some semblance of a work schedule for as long as your body can handle it. You get the best of everything: time to yourself, an opportunity to get out, socialize and earn a paycheck to alleviate your financial stress.

Sources

1. Statistics Canada: The older people are all right (Sept 24, 2024)

2. Statistics Canada: Employment by choice and necessity among Canadian-born and immigrant seniors (Apr 24, 2024)

3. Healthcare of Ontario Pension Plan: 2023 Canadian Retirement Survey

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

When you think about what it might mean to live next door to an Airbnb, you might imagine lots of noise, a constant stream of strangers coming and going, and general chaos. But one thing you may not anticipate is the cost of your HOA fees rising.

Residents of a downtown Atlanta condo building have been complaining about an influx of Airbnb renters since 2021.

"The weed, the smoking, the drugs," resident Nicky Buggs told Channel 2 Action News (WSB-TV) about her concerns.

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But, those are not the only issues. Since Airbnbs took over the building, residents say they have seen their homeowners association (HOA) fees and utility bills increase. And understandably, they’re not happy about it.

The hidden cost of living among Airbnbs

Living among Airbnbs is as unpleasant for these Atlanta residents as you might assume.

“I see females running up and down the halls with no clothes on,” resident Zeda Stanley Sartor told Channel 2 Action News.

Since limited liability companies (LLCs) were reported to have turned a large number of units in the building into Airbnbs, there have been frequent parties and lots of noise.

But residents’ frustrations go beyond that. Not only have their HOA fees increased, but they say the floors with Airbnbs are the ones being prioritized for upgrades, while non-Airbnb floors are being deprioritized. That’s not surprising since, at this point, residents say Airbnb owners control the HOA board.

The HOA board told Channel 2 Action News that eventually, all floors in the building will get updated, acknowledging that renovations are sorely needed.

“We cannot do them all at once. It’s a 21-floor building, can’t be done,” board member Marsha DeQuiors said.

But, condo owners aren’t thrilled to suddenly see their HOA fees rising after staying the same since 2018. They’re also not thrilled that since Airbnbs have moved in, their water bills have also risen — with leaks also becoming more of a problem.

"We even looked at like, OK let’s just meter each unit and make everybody responsible for their own water, and the building’s not designed for that," board member Jamey Waters told Channel 2 Action News.

Residents say they complained to state and local leaders, who pledged to place limits on Airbnbs. But, when Channel 2 Action News combed through records, it learned that just 11 of the dozens of units being used as Airbnbs had the required licenses to serve as short-term rentals.

“We can do some research on that,” DeQuiors responded when asked about that.

The HOA plans to put cameras in hallways to keep track of what’s going on in the building in hopes to stave off problems from Airbnb tenants. But, the board says that HOA fees must keep rising to keep the building running.

Channel 2 Action News reached out to Atlanta City Council for an update on the Airbnb limits they’ve been asked to consider. Reporters were told that one ordinance was recently introduced, while another was still under consideration.

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The risk of Airbnbs

Having Airbnbs take over a condo building is more than just a hassle for the people who live there. Not only can it lead to increased utility bills, but it could also lead to homeowners insurance premium hikes.

There’s inherent risk for insurers because short-term guests may be more likely to cause damage than residents. It’s in the best interest of residents, for example, to maintain a smoke-free environment if the building’s rules dictate that. There’s little to stop an Airbnb tenant, who’s staying for just two nights, to light up a cigarette — and worst case scenario, for that to start a fire.

As such, the addition of Airbnbs could cause a building’s insurance rates to rise — that is, if policies aren’t canceled altogether. Provider Harris Insurance explains that short-term rentals can affect the availability of insurers willing to cover a given building, since insurers tend to view these arrangements as higher risk.

It’s also important to remember that homeowners policies don’t just cover property damage. They also include liability coverage for incidents where residents or guests are injured on site.

All it takes is for one Airbnb guest to get out of hand before someone gets hurt, or a series of people get hurt, costing insurers money. That’s not something they want, so the easier route may be to cancel policies if hiking up premiums doesn’t suffice.

While it’s easy to see the appeal of renting out condos on a short-term basis through platforms like Airbnb, the reality is that it can introduce a world of financial risk — both for the condo owners and the neighbors who live with a stream of revolving guests.

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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

Russell and Linda Callahan have bounced around from rental to rental over the past two decades. But it’s not because they keep switching jobs or moving for work, it’s because they could only get away with not paying rent for so long at each place.

As NBC 10 Boston reported, the couple was recently indicted in Worcester Superior Court on 28 criminal counts for allegedly scamming landlords over the last 20 years. Not only did they fail to pay rent, but they also lied and forged documents to get approved for the properties they moved into.

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"I trusted them," a former landlord told NBC 10 Boston.

Now, the couple faces jail time for taking money they were entitled to.

When criminal behavior catches up to you

The Callahans have earned a reputation as "professional tenants." They’ve scammed landlords across Massachusetts by forging pay stubs, submitting fake credit reports and bouncing security deposit checks.

In total, the couple defrauded landlords out of more than $100,000, according to NBC 10 Boston. Over the past 20 years, they’ve been evicted more than 20 times.

Among their victims are a single mom, a couple saving to start a family and a veteran who was deployed overseas.

Sitanshu Sinha and his wife, Shilpi Gupta, rented their Shrewsbury property to the couple in 2023 after receiving fake documents. When the Callahans’ rent checks kept bouncing, the landlords had to take $30,000 out of their kids’ college savings to cover the costs of evictions.

"It was financially very stressful for us," Gupta said.

The Callahans pleaded not guilty and were released on $2,500 bail to home confinement. But it’s unclear as to what "home" means, since they’ve been ordered to stay away from their most recent rental — a Worcester property they’ve lived in since April, where they owe more than $17,000 in unpaid rent.

Their next court date is scheduled for August 20.

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What landlords can learn from this

It’s common to hear about tenants being scammed by fake rental listings, but landlords can just as easily fall victim to dishonest renters.

Scammers like the Callahans often target small, independent landlords who may not have the same tools or experience as big property management firms. And it’s oftens these "mom and pop" landlords who can least afford to absorb the financial hit when a tenant doesn’t pay.

If you’re a landlord, it’s important to vet each applicant thoroughly. Start by running a full credit and background check after verifying a valid form of ID. Because driver’s licenses can be easy to fake, you may want to ask for a Real ID or passport.

Don’t just glance at a few pay stubs. Those can be forged, too, or the tenant may have lost their job since those payments were made. Always contact the employer directly to confirm their employment status and don’t use the phone number the applicant provides. Look it up yourself.

You might also consider requesting a recent W-2 or tax return to get a better picture of the applicant’s finances.

When collecting upfront payments like first month’s rent or a security deposit, ask for a bank or cashier’s check instead of a personal check. Personal checks can bounce, while bank checks are guaranteed by the issuing bank.

Certified checks are another option. While technically personal checks, certified checks have been verified and funds are usually frozen by the bank until they’re cashed.

It’s also a good idea to brush up on local landlord-tenant laws, including your state’s eviction process. Rules can vary depending on where you live, so knowing your rights ahead of time can save you headaches later.

Finally, make sure you have a financial cushion in place so you’re not relying on a tenant’s rent to cover your mortgage. Whether it’s an emergency fund or liquid investments, it’s crucial to have a backup plan.

If a tenant stops paying rent, your ability to pay your own bills could take a hit, and that could lead to credit damage or worse. Even tenants who aren’t trying to scam you can fall on hard times. Protect yourself so a missed payment doesn’t turn into a long-term financial setback.

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• How much cash do you plan to keep on hand after you retire? Here are 3 of the biggest reasons you’ll need a substantial stash of savings in retirement

Money doesn’t have to be complicated — sign up for the free Moneywise newsletter for actionable finance tips and news you can use. Join now.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

Losing a job can be a huge blow at any age. But when you’re in your 60s, it can be an even harder struggle.

Although it’s illegal for employers to discriminate against job candidates based on age, it happens frequently and it’s hard to prove if it happens to you. AARP reports that 74% of job seekers aged 50 and over have concerns that their older age will be an impediment to being hired.

If you’re in the position in question, it could make for a difficult financial situation. Plus, you’re still a year away from being able to claim Social Security benefits.

While you’re old enough to access a 401(k) or IRA without facing an early withdrawal penalty, tapping one of those accounts at 61 could lead to a savings shortfall later on.

There’s also the issue of health insurance to think about. If you were covered through your job, you’re still four years away from being eligible for Medicare.

Here’s how to handle this unfortunate situation on a short- and longer-term basis.

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• Robert Kiyosaki warns of a ‘Greater Depression’ coming to the US — with millions of Americans going poor. But he says these 2 ‘easy-money’ assets will bring in ‘great wealth’. How to get in now

Plan of action: Up to 3 months

Losing a job can be a shock, so you may need a few days or even weeks before you feel ready to dive into a job search. But one thing you should do immediately is file for unemployment benefits.

Typically, you’re eligible for up to six months of benefits if you lose a job through no fault of your own and meet your state’s earnings requirements. Unemployment benefits won’t replace your full paycheck, but at least you’ll have a portion covered.

You should also talk to your employer about severance, if applicable. And if there’s no severance package, see if you’re entitled to be paid out on accrued vacation or sick days you never used. That could add some extra money in your bank account while you figure out your next steps.

Additionally, it’s time to assess your emergency fund to see how many months of bills it can cover. If you’re able to cut back on spending, between lower expenses, your wife’s paycheck and unemployment benefits, you may be able to get away with minimally tapping your emergency fund while you start your job search.

You’ll also need to figure out next steps regarding health insurance — check to see If you can get onto your wife’s job plan (if it offers health benefits).

The Consolidated Omnibus Budget Reconciliation Act (COBRA) may be an option, as it allows you to retain your employer coverage for a period of 18 to 36 months. But it can prove to be extremely expensive, since you’re effectively paying the unsubsidized rate for your old health plan. You may find that a marketplace plan through healthcare.gov is cheaper, especially if you qualify for a subsidy.

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Plan of action: Months 3 to 12

This is the time to be aggressively job-hunting. Until you’re able to find a full-time job, it’s important to preserve your savings — both your emergency fund and your retirement nest egg.

If you’re still unemployed at the six-month mark, look at gig work, a side hustle or a part-time job when your unemployment benefits run out. That way, you’ll have some income coming in while you continue looking for a full-time job.

It’s also important to look at your retirement portfolio carefully. If you weren’t planning to use that money for another five years or longer, you may have a larger portion of your portfolio in stocks.  If it’s looking like you may need to tap into your nest egg sooner, shift a portion of your portfolio out of stocks and into assets that are stable, such as bonds and CD ladders.

The good news is that interest rates are still pretty strong, so you can earn a decent return from a CD ladder without taking on the same risks you do with other investments. You can even keep a chunk of your retirement funds in a high-yield savings account, for added flexibility.

Plan of action: 12 months and beyond

It can be discouraging once you’ve reached the 12-month mark of being unemployed. But keep the faith and don’t give up!

It could make sense to shift away from seeking a full-time job and see if you can get by with a couple of part-time jobs or expand your side hustle to tide yourself over until retirement.

Of course, you may not end up being able to earn the income you want in the coming years, so you’ll need to figure out if you can maintain a pared-down lifestyle to avoid draining your nest egg early.

By now, your home may be paid off. If so, downsizing is an option. It could allow you to not only lower your housing costs, but walk away with some equity you can use as income.

Another option you can look at is claiming early Social Security. You’ll face a permanent reduction in benefits if you don’t wait until age 67 to claim them, since that’s your full retirement age based on your year of birth. But if you’re scared to tap your retirement funds and can only reduce your expenses so much, at least it’s on the table.

Depending on your situation, it could make more sense to tap your savings than to claim Social Security early. If you get a full-time job at the 18- or 24-month mark, you can replenish your savings then. But once you claim Social Security early, you’re generally locked into the lower monthly benefit for life.

Looking on the bright side, if your financial situation permits, you could leverage your current lower income by converting some retirement funds to a Roth IRA, which offers tax-free withdrawals in retirement.

Keep in mind, though, that you’ll need to pay taxes on the converted amount in the current tax year. If you’re experiencing financial difficulties, adding this tax burden might not be the best choice right now.

What to read next

• Financial aid only funds about 27% of US college expenses — but savvy parents are using this 3-minute move to cover 100% of those costs
• Here are the 6 levels of wealth for retirement-age Americans — are you near the top or bottom of the pyramid?
• Here are 5 ‘must have’ items that Americans (almost) always overpay for — and very quickly regret. How many are hurting you?
• How much cash do you plan to keep on hand after you retire? Here are 3 of the biggest reasons you’ll need a substantial stash of savings in retirement

Money doesn’t have to be complicated — sign up for the free Moneywise newsletter for actionable finance tips and news you can use. Join now.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

When Cumming, Georgia, homeowner Venkat Garikapati’s roof sustained heavy wind damage in 2021, he filed a claim with his home insurance company, State Farm, to have it fixed.

However, State Farm only approved the replacement of 38 shingles and estimated the cost at $1,422.15 — less than Garikapati’s $2,500 deductible — and closed the claim without paying, according to Atlanta News First. But Garikapati’s roofer, David Garner, disputed the insurance company’s assessment.

"It was torn all to pieces," Garner told the local broadcaster of the roof’s condition. "More than 70 shingles were creased or missing."

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Garner, along with a public adjuster, spent years trying to prove to State Farm that Garikapati’s roof needed a full replacement to avoid further damage and leaking, reports Atlanta News First. State Farm kept denying the claim before finally approving a full roof replacement on April 25, 2024 — more than three years after the original claim.

"They are never shy on collecting the monthly premium at all, but to get this approved took quite a long time," Garikapati said.

Garner went ahead and fixed the roof. But after its initial "actual cash value" check cleared, State Farm refused to pay the replacement cost in full, citing a clause in Garikapati’s insurance policy that stipulates a repair or replacement must be completed within two years of the date of loss to receive additional funds. As a result, Garner is out $12,000 — and he blames State Farm fully.

Local roofer in the lurch

When a contractor does work on a home and isn’t paid for it, they may be able to place a lien on the home. However, Garner doesn’t want to do that to Garikapati.

"It’s not the homeowner’s fault that this is taking place," Garner said.

Despite the clause in Garikapati’s insurance policy, Atlanta News First reports an attachment to State Farm’s approval estimate stated: "Replacement cost benefits will be issued contingent completed of roof replacement and submission of photos, certificate of completion and or signed contract agreement with service provider."

But when Garner submitted the paperwork, he said State Farm wouldn’t pay up.

"What am I supposed to do?" Garner asked. "I’ve already built the roof. I paid for the materials. I paid for the labor. Everything’s done."

Garikapati filed a complaint with the Georgia Office of Insurance and Safety Fire Commissioner in January, per Atlanta First News, but that went nowhere.

“The whole reason this claim took a long time to get approved is because deny and delay, deny and delay,” Garner said.

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Atlanta News First says it looked at recent complaints filed with the commissioner’s office and found that State Farm, the state’s biggest insurer, had 892 complaints in 2024, up 126% from 2022. It also found that Allstate had 770 complaints, up 77% from 2022, while Progressive had 557, up 49% from 2022. The office did not supply information about the results of complaints.

Garner feels like he’s out of options — he doesn’t think it would be financially feasible to sue State Farm, and he’s not interested in holding Garikapati responsible.

"He was operating in good faith, just like I was," Garner said.

A spokesperson for State Farm told Atlanta News First "we believe we have provided every benefit available to the customer within their policy."

What to do if your insurance company comes up short

So, what can you do if your home insurance company comes up short on funds or doesn’t pay?

First, you should read the terms of your policy carefully. What happened to Garikapati above wasn’t exactly his fault, but it seems the fine print of his policy provided the insurance company with an out. Familiarizing himself with those details may have prevented the situation above from occurring.

One thing you’ll want to check your policy for is exclusions. There are certain things your insurer may not pay for, which should be outlined in your policy agreement. It’s also important to read the terms of your claim approval carefully to make sure you and your contractor are in compliance.

But from there, if you believe an insurer isn’t paying out like it’s supposed to, you should collect evidence. Document all of the work that was done so you can show if it was in accordance with what your insurer approved. That means taking pictures and getting a write-up from your contractor detailing the work performed.

Your insurer may have tools in place for claims and payment denials. Follow those once you’ve gathered your documentation. If that doesn’t work, you can try to file a complaint with your state’s insurance agency. If that doesn’t work, you may want to seek legal guidance.

To be clear, there’s a difference between your insurance company denying a claim and refusing to pay following an approval. There should be no expectation your insurer will pay out on a claim that’s been denied.

Also keep in mind that any contractor you hire may not be as understanding as Garner, and you don’t want yours to come after you for their money. So, you should do all that you can to ensure everything is above board.

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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

Social Security has been under scrutiny now that the Department of Government Efficiency (DOGE) is digging into its finances.

For this reason, Social Security is invested in recouping all of the money it can due to erroneous payments.

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That’s how 65-year-old Ruth Podmanik from Sheffield Lake, Ohio found herself in a messy situation. The recent retiree revealed that her husband, Ed, passed away from leukemia back in 2012.

She’d recently been approved to start receiving her late husband’s Social Security benefits. But now, as News 5 Cleveland reports, they’re going after Ruth for nearly $70,000 the agency claims was paid out mistakenly to Ed.

“I feel scared,” Ruth told News 5. “Am I going to have to sell my house?”

Social Security policies are leaving older adults confused

The Center on Budget and Policy Priorities says that Social Security has a payment accuracy rate of over 99%, and that only 0.3% of its payments are improper. Still, between 2015 and 2022, Social Security made roughly $72 billion in erroneous payments, according to its Office of the Inspector General.

Meanwhile, Podmanik says her husband received Social Security payments during a five-month period of being out of work due to his illness. But when Ed went back to work, Social Security kept sending him money.

She told News 5 that Ed called the Social Security Administration (SSA) "constantly" to ask why he was continuing to get benefits. They told him he was entitled to the money because of his leukemia.

Now, Social Security is coming after Ruth for an overpayment to Ed of over $69,000.

“Not once did they say anything to me about, ‘Hey, you know you still got an overpayment here?’” Podmanik told News 5.

Despite reaching out to the SSA to resolve the matter, she isn’t getting answers. And she’s not the only one.

"Every year, we’ve seen an increase in the volume of people calling and looking for help," Natasha Pietrocola, director of the Division of Senior and Adult Services in Cuyahoga County, told News 5.

She says many older Americans are confused about Social Security overpayments and are worried about the consequences.

Social Security can reclaim its money by withholding benefits from seniors. But, as Pietrocola told News 5, "that’s going to have devastating effects for them to be able to actually afford to live."

Part of the problem stems from a recent SSA change. In March, the agency said it’s looking to recoup overpayments at a rate of 100%. This means that the SSA can withhold 100% of a person’s monthly benefits to recover money it’s owed.

The change amends a previous rule where the SSA could only withhold 10% of benefits to recoup overpaid funds. The change is expected to help Social Security recover around $7 billion over the next 10 years.

Social Security later amended its message to limit clawbacks to 50% of benefits.

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How to cope with changes to your Social Security checks

If you’re someone who’s collecting Social Security, you may be reliant on that money to cover your expenses.

So, if you get a notice letting you know that your monthly checks are being reduced due to an overpayment, it could have a huge impact on your ability to pay your bills.

If that happens, your first move should be to contact the SSA and ask for an explanation if there’s something about the notice that isn’t clear or you don’t agree with it. If you can’t get an answer by phone, you may want to make an appointment at your local Social Security office to speak to a representative in person.

It’s also possible to appeal a decision made by the SSA. And if that doesn’t help, you can weigh your options for low-cost legal aid.

It’s also a good idea to create a my Social Security account and monitor it regularly. And be sure to reach out to the SSA if you start receiving smaller benefits or your benefits go missing.

Meanwhile, Podmanik is still trying to get answers from Social Security.

"There’s days when I sit here and I cry," she said. "It wasn’t my mistake. It wasn’t my husband’s mistake for the overpayment. It was their mistake."

News 5 reached out to the SSA to look into her situation. But for Cuyahoga County residents, further resources for similar situations may be available through the Division of Senior and Adult Services.

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• How much cash do you plan to keep on hand after you retire? Here are 3 of the biggest reasons you’ll need a substantial stash of savings in retirement

Money doesn’t have to be complicated — sign up for the free Moneywise newsletter for actionable finance tips and news you can use. Join now.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.