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Author: Vawn Himmelsbach

  • I’m 69 with $300K in savings but I’ve got a $250K reverse mortgage causing me serious stress. Should I just use most of my savings to pay it off ASAP and aim to survive on Social Security?

    I’m 69 with $300K in savings but I’ve got a $250K reverse mortgage causing me serious stress. Should I just use most of my savings to pay it off ASAP and aim to survive on Social Security?

    Imagine this scenario: Samantha is retired at 69, but a few years back she took out a reverse mortgage. Now, she’d like to be done with it, especially since the loan comes with a hefty interest rate of 6.75%.

    She currently has about $375,000 in home equity while her reverse mortgage loan is close to $250,000. She also has about $300,000 in savings, but she’s wondering if she should use a chunk of those savings to pay off her reverse mortgage and live on her Social Security (about $2,500 a month) instead.

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    Or, does it make more sense to stick with the status quo?

    How does a reverse mortgage work?

    A reverse mortgage allows homeowners who are at least 62 to borrow money based on the equity in their home. (Your equity is based on how much you’d get if you sold your home, minus how much you have left on your mortgage.)

    Unlike a traditional mortgage, you don’t make monthly loan payments. Instead, the lender pays you, using your house as collateral.

    “Reverse mortgage payments are considered loan proceeds and not income. The lender pays you, the borrower, loan proceeds (in a lump sum, a monthly advance, a line of credit, or a combination of all three) while you continue to live in your home,” according to the IRS.

    Because it isn’t considered income, the money is tax-free and won’t generally impact your Social Security or Medicare benefits. But, you still have to pay property taxes and insurance.

    Interest accrues on the loan balance, meaning the amount you owe goes up over time. If you have a high interest rate, that can add up — and fast.

    It increases your debt while decreasing your equity, and the interest added to your balance each month can “use up much — or even all — of your equity,” explains the Federal Trade Commission about the risks of a reverse mortgage.

    The total (including interest) must be repaid either when you move out and sell your home or after you pass away, in which case it must be repaid by your estate.

    If you sell your home, you can use part of the proceeds of the sale to pay off the loan. This could make sense if you want to downsize or move in with family, or if you need to move into an assisted living facility.

    However, if you continue living in your home until you pass away, your heirs will inherit the house — and the reverse mortgage.

    The loan would have to be paid in full, if they decide to keep the home. If they instead decide to sell, “they must repay the full loan balance, or at least 95 percent of its appraised value if the loan balance owed is more than the home value,” according to the Consumer Financial Protection Agency.

    Typically, they would have 30 days to repay the loan after receiving a notice from the lender (or turn over the home to the lender), although it’s possible to get an extension if they’re actively trying to purchase or sell the home.

    Read more: Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it

    Options for paying off a reverse mortgage early

    Maybe Samantha wants the peace of mind of owning her home, or maybe she wants to leave the house to her children without burdening them with debt. Whatever the reason, she does have a few options.

    One of those options is to do nothing. She could choose to remain in her home, with enough money coming in from Social Security and her retirement savings to enjoy a comfortable retirement.

    When she passes away, her children could sell it and use the proceeds to pay off the reverse mortgage. It’s a trade-off: Samantha lives more comfortably and leaves less to her children, or she lives a more spartan lifestyle to leave more to her children.

    If Samantha does decide to pay the loan off early, she could consider refinancing (turning a reverse mortgage into a regular mortgage), though that may not make sense in a high interest rate environment.

    She could also consider paying it all off in one lump sum, making a partial payment (such as paying off $50,000 to $100,000 now while preserving some of her savings) or making loan payments to reduce her interest over time. Or, she could keep the reverse mortgage and invest that money conservatively as part of her long-term retirement plan.

    Even if Samantha can live off her Social Security and savings, she’ll still be responsible for paying property tax, insurance and maintenance on her home. Plus, she may not want to drain her savings in case she needs that money for an emergency or future medical care.

    If you’re considering paying off a reverse mortgage early, it’s a good idea to sit down with a qualified financial advisor to model various scenarios based on your Social Security income, retirement savings, withdrawal rate and taxes — and how different scenarios would play out if you paid it off (either in a lump sum or with smaller payments over time).

    This could help you make an educated decision based on calculations instead of emotion.

    What to read next

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

  • Americans could see price hikes across the country thanks to Trump’s trade war — so don’t get caught napping. Here are 5 ‘everyday items’ to load up on before they become more expensive

    American consumers can expect to see higher prices for goods made in China — and maybe even empty shelves.

    After President Donald Trump’s “reciprocal” tariffs were announced on April 2, markets took a nosedive. A 145% tariff on Chinese goods effectively blocked trade and resulted in a slowdown at ports. The CEOs of major retailers, including Walmart and Target, reportedly warned Trump that store shelves would go bare within weeks.

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    While the U.S. and China have since agreed to a cooling-down period of 90 days — with the U.S. cutting tariffs on Chinese goods from 145% to 30% and China dropping its tariffs (on most goods) to 10% — that still means there’s a 30% tariff on Chinese goods. And the ‘deal’ is simply a pause; a permanent deal has yet to be reached.

    Then there’s the ‘de minimis’ loophole. Previously, this loophole allowed small packages valued under $800 to enter the U.S. without import duties or taxes. However, Trump signed an executive order in April to close that loophole and remove the exemption.

    But then, as part of negotiations to de-escalate a trade war with China, the U.S. announced it was cutting the de minimis tariff on small parcels from China to 54% (from 120%) — or a flat fee of $100 — starting May 14.

    The previous de minimis shipment exemption has been critical to direct-to-consumer brands like Shein and Temu, allowing them to sell cheap goods to U.S. consumers. And a 54% tariff is still a hefty amount, especially if you’re just ordering a cheap dress from Shein or some toys from Temu.

    How tariffs will impact your shopping cart

    While the pause may be a welcome development, Steve Lamar, CEO of the American Apparel and Footwear Association, told CNBC that it won’t stop prices from going up.

    The 30% tariff stacked on top of existing Section 301 and MFN tariffs “will still make for an expensive back-to-school and holiday season for most Americans,” Lamar told CNBC. “If freight rates spike due to the tariff-induced shipping disruptions, which will take months to unwind, we could see costs and prices creep up further.”

    However, tariff-related shortages won’t look like pandemic-related shortages. Back in the early days of the Covid-19 pandemic, shortages of supplies like toilet paper and hand sanitizer resulted from panic buying and supply chain disruptions.

    Rather, tariff-related shortages are a result of trade policies that increase import costs. So, while certain goods may not disappear from store shelves, they could get more expensive. And some importers may reevaluate what they sell, reducing the options that American consumers have become accustomed to.

    Even if Americans were to stop buying cheap goods from China, it would still hurt the U.S. economy since many mom-and-pop shops rely on those discretionary purchases. For example, despite a pre-tariff buying spree, the U.S. economy still contracted by 0.3% in the first quarter of 2025.

    It’s also hard for retailers to plan ahead with sudden policy changes, which is starting to put a chokehold on supply chains as American businesses cancel or postpone shipments. So what items should you stock up on now?

    Read more: Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it

    1. Fast fashion

    American consumers are already seeing increases in the price of fast fashion from brands like Shein and Temu. And, though tariffs have come down, fast fashion is unlikely to go back to the way things were in a pre-tariff world.

    “Sellers are probably taking a wait-and-see approach but in general I think it’s fair to say the boom times of small package delivery from China to the U.S., the Golden Age, is already gone,” Jianlong Hu, CEO of Brands Factory, a Chinese cross-border e-commerce consultancy, told​ The Economic Times.

    When it comes to fast-fashion, a brand like Shein may be more exposed to the de minimis changes, according to The Economic Times, “due to its reliance on speed of getting thousands of new styles each week to consumers in the West by air.”

    2. Toys

    You may want to do your holiday shopping really early this year. This was highlighted when Trump recently told reporters that “maybe the children will have two dolls instead of 30.”

    Nearly 80% of all toys sold in America are made in China, according to industry group The Toy Association, which are impacted by tariffs. But higher prices won’t just hurt consumers; they will also impact toy companies in the U.S, most of which (96%) are small and mid-sized businesses.

    3. Cheap household goods, school supplies and home décor

    Like toys and fast fashion, many cheap household goods will get more expensive since they already have tight margins. That includes everything from paper plates to batteries to toothpaste. The same goes for school supplies and home décor, much of which is produced in China and also has tight margins.

    4. Consumer electronics and appliances

    When it comes to consumer electronics and appliances, many components and parts are made in China — and many tech companies, including Apple and LG Electronics, rely on manufacturing facilities and skilled staff there.

    While Americans will still need to buy smartphones, computers, washing machines, dishwashers and fridges, those items could become much more expensive. If you absolutely need to replace one of these items, it may make sense to do it sooner rather than later.

    5. Replacement parts

    While it may not be top of mind, replacement parts could also become harder to find, like filters and cords. “Supply chains don’t often prioritize reordering those until they’re running low. And a lot of these are sourced from China,” Casey Armstrong, chief marketing officer of ShipBob, a global fulfillment and supply chain platform, told HuffPost.

    While you may want to stock up on certain items, it’s also a good time to reevaluate your spending habits — and perhaps even change your consumption habits.

    What to read next

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

  • A Minnesota nonprofit linked to $250 million fraud scheme was just raided by the Feds — the FBI believes its records claiming it fed 1 million children ‘are phony.’ How the scam worked

    A Minnesota nonprofit has been raided by the Feds in a new investigation more than a year after last year’s $250 million-meal program fraud scheme. In those allegations, Feeding Our Future is said to have had scammers steal hundreds of millions of dollars from taxpayer-funded nutrition programs for hungry children during the early days of the pandemic.

    Now, more than a year later, New Vision Foundation (NVF) in Saint Paul is the focus of yet another Feeding Our Future meal fraud investigation.

    NVF is a nonprofit with a mission to “create pathways to success by motivating disadvantaged youth in Minnesota through coding and digital literacy classes,” according to its website, which also displays logos from major sponsors including 3M, Target and Wells Fargo, as well as the City of Saint Paul.

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    How meal program fraud works

    In March, a jury found Aimee Bock, founder and executive director of Feeding Our Future, guilty on all counts of fraud. She’s considered the ringleader of an elaborate scheme that stole $250 million from the federal child nutrition program in 2021, during the height of the pandemic.

    While Bock is in jail awaiting sentencing, 47 suspects “have been indicted for defrauding a federally funded child nutrition program,” according to the FBI.

    The scam was executed by claiming to serve more meals to children in need than was the case. Like other organizations taking part in the scam, “NVF allegedly submitted fraudulent reimbursement requests to the Minnesota Department of Education for meals that it never served,” according to MPR News.

    During the trial, it came to light that Feeding Our Future paid NVF more than $2.5 million in 2021. While NVF claimed to serve more than 1 million meals to children in need over an eight-month period in 2021, “the FBI believes meal count sheets, claiming to feed more than 3,000 kids two meals every day, are phony,” according to KARE 11.

    There were several red flags. For example, workers at a neighboring nonprofit called Repowered (which provides electronics recycling jobs to people recently released from jail), “told law enforcement that they never saw any children at New Vision Foundation — either being served meals or otherwise,” according to the search warrant written by FBI Special Agent Travis Wilmer.

    And, since Repowered has registered sex offenders on staff, “children could not be present at New Vision Foundation.”

    Read more: Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it

    NVF invoices claim the food was purchased from a food service company in Eden Prairie. But, according to the search warrant, the address on the invoices led to an apartment complex rather than a food warehouse for produce, dairy products and rice (as the invoices claimed).

    In addition, public tax filings show that NVF reported five times the amount of “gifts and grants” in 2021 as it did in 2020 or 2022.

    The broader economic implications of fraud

    While this was an exceptional case, it’s not the first nor the only case — highlighting what can go wrong with programs intended to help those in need without proper oversight and governance.

    A scathing report from the Office of the Legislative Auditor found that the Minnesota Department of Education’s “actions and inactions created opportunities for fraud.”

    To mitigate risks, the report recommends better oversight for reviewing and approving sponsor applications, as well as conducting monitoring visits and compliance reviews.

    Fraud wastes money and diverts resources from those who actually need it — in this case, thousands of children who never received meals and snacks during the height of the pandemic. It also has broader social impacts, such as eroding trust in government programs.

    This is particularly urgent right now, as America’s “crisis of public trust in government is growing,” according to a national survey conducted by the Partnership for Public Service. The survey found that only 23% of Americans trust the federal government and just 29% believe that democracy is working in the U.S. today.

    The federal government loses between $233 billion and $521 billion annually to fraud, according to the U.S. Government Accountability Office (GAO).

    In the case of Feeding Our Future, the FBI and law enforcement partners have “been able to recover $50 million from 60 bank accounts, 45 pieces of property, and numerous vehicles and additional items, such as electronics and high-end clothing,” according to the FBI and “additional seizures are expected.”

    When it comes to detecting and rooting out fraud, advanced technologies could help.

    For example, the U.S. Department of Agriculture’s (USDA) is targeting fraud in its Farm and Food Workers Relief Program in a variety of ways, including a centralized risk and fraud analysis tool, document verification technology to detect alterations and predictive analytics that analyze deviations from expected patterns. It also monitors social media and the dark web.

    Concerned citizens can learn more about common fraud schemes on GAO’s Antifraud Resource or they can report fraud, waste, abuse or mismanagement of federal funds to FraudNet.

    What to read next

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

  • ‘Too old to be having these problems’: Cincinnati mom left ‘confused’ after partner walked out on her when they found out she was pregnant — so Dave Ramsey helped her build a ‘baby budget’

    ‘Too old to be having these problems’: Cincinnati mom left ‘confused’ after partner walked out on her when they found out she was pregnant — so Dave Ramsey helped her build a ‘baby budget’

    Johi called into the The Ramsey Show from Cincinnati, reeling from a week in which her boyfriend of 14 years deserted her — right after she discovered she was pregnant with their second child.

    “He was just not ready to take on that responsibility, so he left,” she said.

    They already have a 12-year-old child together.

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    “I feel like I’m too old to be having these problems,” Johi, 32, confessed.

    While she deals with the emotional fallout of her breakup and the prospect of being a single mom, Johi sought Dave Ramsey’s advice on her next steps financially.

    The good news is that she’s been using the debt snowball method to get her finances in order and only has one debt left: a $14,000 car loan.

    She was ready to “attack it” and pay $1,600 a month “to wipe it out by the end of this year.” But with a baby coming, she doesn’t know if that’s the best plan — especially now that she finds herself in the position of being a single mom.

    “Now I’m just confused on where to go from here,” she said.

    Preparing financially for a new baby

    After taxes, Johi makes about $4,500 a month, though a few months ago she started taking on side hustles so she now brings in about $5,500 a month. She’s not sure that’s sustainable as her pregnancy progresses.

    Normally Ramsey recommends paying off debts first. But with a baby on the way, he says to “stop your debt snowball and pile up cash” for a baby budget.

    “I want you to get the biggest possible pile of cash you can get between now and baby,” he told Johi. “Treat it like you’re paying off debt,”

    Read more: Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it

    With her side hustle, she could save about $3,000 a month for over five months. She may need to slow down her side hustle as she nears her delivery date, but could save $15,000.

    Fortunately, Johi has health insurance, though she’ll need to contact her provider to find out what her out-of-pocket costs will be for obstetric appointments, labor and delivery.

    Generally for someone with health insurance, those add up to $2,854 — including your health insurance deductible, copayments and coinsurance — according to the Peterson-KFF Health System Tracker..

    If Johi didn’t have health insurance, she’d be looking at $18,865 in out-of-pocket costs.

    Low-income single moms without health insurance can apply for Medicaid or CHIP (Children’s Health Insurance Program) to see if they’re eligible for free or low-cost health coverage. They may also qualify for certain subsidies or tax credits.

    What to do once baby has arrived

    If Johi does as Dave Ramsey advises, she could have up to $20,000 saved when she comes home with her new baby. That gives her options.

    Ramsey told her that if she doesn’t have other expenses, she could write a check for $14,000 and pay off her car.

    “You don’t really lose any ground on your get-out-of-debt plan,” he said.

    From there, she can restart her financial goals. Ramsey’s baby steps include building out an emergency fund, paying off all debt (except your mortgage) using the debt snowball method and investing 15% of your household income for retirement, among other things.

    Johi should also consider contacting her state’s child support agency, which is responsible for child support enforcement. USA.gov offers resources to help.

    Child support could help Johi supplement her income if she’s unable to continue her side hustle in the latter part of her pregnancy or after she gives birth. And it holds her deadbeat partner accountable, Ramsey added.

    “Most states have a law that if you make a baby, you get to help pay for it,” he said.

    The level of child support depends on where you live, according to Custody X Change. The national average is $721 a month but can range from $402 to $1,187 a month.

    Judges can adjust the levels based on evidence, and sometimes parents agree on the amount of child support a partner will pay.

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

  • ‘Fight these goobers’: Washington State man has debt collectors coming after him — but Dave Ramsey thinks negotiating with them should be at the bottom of his to-do list

    ‘Fight these goobers’: Washington State man has debt collectors coming after him — but Dave Ramsey thinks negotiating with them should be at the bottom of his to-do list

    Jordan from Spokane, Washington, has collection agencies coming after him, so he called into The Ramsey Show for help negotiating with debt collectors.

    In particular, a repo agent — also known as a repossession agent, who is employed by a collection agency to repossess property over a failure to make contractual payments — has been “coming at me hard.” Jordan said he has also gone into collections with some household bills.

    The repo man wants either $5,000 down with smaller monthly payments or a monthly payment of about $800 a month for a year and a half.

    “I’m the sole provider of a family of four and so that kind of makes it difficult,” Jordan told Dave Ramsey during the episode.

    Jordan makes about $92,000 a year working in construction. He got behind with his payments when he switched jobs, but ultimately said, “I can make excuses all day but really just being irresponsible with my money.”

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    When you’re overdue with a bill — anything from a phone bill to a car loan to a medical bill — your account could be sent to collection after about three months. Companies may sell your debt to a collection agency and they employ agents who may use fear-based tactics to get you to pay up.

    But, what happens if you don’t have the money to pay up?

    Ramsey’s rules for getting out of debt

    Negotiating with debt collectors is way down on Ramsey’s list of priorities for Jordan. Instead, he advises him to start by making a list of everything in his budget. “We’re going to get extremely detailed, extremely organized,” Ramsey said.

    From there, he recommends Jordan follow what Ramsey calls the Four Walls: food, utilities, shelter and transportation.

    “Food is first before you buy anything else,” Ramsey said. That means buying food so your family can eat — before dealing with the repo agent. “He’s way down on my list of things to worry about for you.”

    Buying food means buying groceries, not eating out. “No food at restaurants when you’re in collections,” he said. “You’re broke, you don’t get to go to a restaurant — a restaurant is a luxury.”

    Second is taking care of utilities, such as water and electricity. That’s second only to food. Since Jordan is behind on some payments, Ramsey says he should “catch it up in the next check before you do anything else other than food.”

    Third is covering your rent or mortgage. Jordan’s mortgage is $1,655 a month and is currently in a trial repayment plan, which means he has three months to get caught up. “Until you do that, I don’t care if repo man ever gets another dime,” Ramsey said.

    Fourth is ensuring you have transportation to get to and from work so you can continue to make a living. Whatever is left over can be used to pay down the debt.

    This “emotionally sets the table for you to fight these goobers,” Ramsey said.

    Read more: Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it

    Dealing with debt collectors

    Jordan’s first job, Ramsay said, is to take care of his own household because “you’re not going to make it emotionally if you keep putting these idiots at the front of the line because they threaten you.”

    Ramsey says the repo agent’s job is to make you afraid because “that moves him to the front of the line.”

    “I want you angry — and afraid of nothing,” he said. ”Once you’ve got your family covered, then you can fight like a man.”

    If a repo agent is threatening to sue, Jordan can tell him he’ll have to file Chapter 7 bankruptcy, in which case the repo agent will get nothing — though Ramsey isn’t necessarily recommending that.

    Only once Jordan feels financially and emotionally stable, “then and only then do we negotiate with other collectors.” At that point, he can negotiate an offer. Ramsey says debt collectors will typically settle for a quarter on the dollar for a cash offer.

    “What you’re doing is you’re resetting the emotional table here to where we now know who’s in charge of your money and it’s you, not him,” he said, adding “these guys are specialists at emotional terrorism.”

    Know your rights

    Even if you owe money, you still have rights. The Federal Trade Commission’s Fair Debt Collection Practices Act (FDCPA) provides protections to consumers against unfair, deceptive or abusive debt collection practices.

    Understanding your rights — and what debt collectors are and aren’t allowed to do — can help you gain some control over the debt collection process.

    For example, debt collectors are allowed to contact you between the hours of 8 a.m. and 9 p.m. via text or email, even a direct message on social media. They can sue you for payment, try to charge you for old debts and charge interest.

    But debt collectors aren’t allowed to lie about how much you owe or try to deceive you about who they are. If they’re harassing you, you could get a lawyer to send a certified letter asking them to stop contacting you and report them to the Federal Trade Commission.

    If you owe money, you still have to pay back that money — but you should not be harassed or threatened during this process. And, you can refuse any offer a debt collector makes you. Once you negotiate a settlement that works for you, don’t hand over any money until you get the settlement offer in writing.

    What to read next

    Stay in the know. Join 200,000+ readers and get the best of Moneywise sent straight to your inbox every week for free. Subscribe now.

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

  • I’m 59 and inching closer to retirement — but after a nasty divorce, I’ve been left with basically zero savings. What 3 things can I do ASAP to cobble together a comfortable nest egg?

    I’m 59 and inching closer to retirement — but after a nasty divorce, I’ve been left with basically zero savings. What 3 things can I do ASAP to cobble together a comfortable nest egg?

    Jamie, 59, is inching closer to retirement, but after going through a nasty divorce, his emergency fund and savings have been wiped out. He still has a 401(k), a pension and some investments, but his divorce will impact the value of those assets.

    Without additional savings to supplement those assets — which will be divided up with his ex — he’s worried he’ll have to delay retirement or do some serious downsizing.

    This is a challenge facing many Americans. The current divorce rate nationwide is 42% for first marriages, according to the Centers for Disease Prevention and Control (CDC). But gray divorce, where couples over the age of 50 decide to part ways, is becoming increasingly common.

    Back in 1990, only 8.7% of divorces in the U.S. were gray divorces. By 2019, that number had ballooned to 36%, according to a study published in the Journals of Gerontology: Social Sciences. And that has some serious impacts on their financial stability as they head into their golden years.

    If you’re in a situation like Jamie, here are three crucial things to do right now to help cobble together a comfortable nest egg.

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    1. Calculate a new retirement number

    You can’t plan a roadmap if you don’t know where you’re going. Since Jamie had a retirement plan with his ex-wife, he now has to create a new one for himself.

    That means he’ll need to calculate a new ‘retirement number’ — the target amount you need to live the life you want in retirement. A rule of thumb is to save 10 to 12 times your final salary.

    That number should take into account the age at which he wants to retire, his annual salary, his expenses and savings, as well as investment portfolio performance. It should also take into account the standard of living he wants to maintain in retirement.

    Depending on his final retirement number, he may have to make a few adjustments, such as working a few years longer than he planned or perhaps downsizing his standard of living. He may even change his retirement plans altogether, like working part-time at a side hustle or moving out of the country.

    While the divorce wiped him out, Jamie still has some retirement income. Since he qualifies for Social Security, he can use this to supplement any savings he manages to cobble together before he retires.

    At 59, the earliest he could claim his Social Security retirement benefit is three years from now, at age 62. But at that point he’d get a permanent reduction of his benefit by 30%.

    If he waits to claim his benefit until his full retirement age (FRA) at age 67, he’d receive 100% of his benefit. If he’s able to delay his benefit past his FRA, he’d get a permanent bump of 8% for each year he delays up until age 70.

    Read more: Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it

    2. Understand the rules of dividing retirement assets

    While his savings may be depleted, Jamie still has a pension, 401(k) and individual retirement account (IRA). It’s important to review your existing retirement accounts and understand how divorce will impact the division of those assets.

    This can be made more complicated because the rules on dividing pensions and assets vary from state to state, so it’s a good idea to consult a divorce lawyer and financial advisor.

    During a divorce, traditional pension plans and employer-sponsored retirement plans such as 401(k)s can be divided through a court order called a Qualified Domestic Relations Order (QDRO), used specifically for this purpose.

    Funds that you’ve contributed during the course of your marriage to a traditional pension or 401(k) are typically considered marital property. Unless you have a prenuptial agreement, each spouse would be entitled to a portion of those funds.

    When it comes to IRAs, whether traditional or Roth, dividing those assets would follow your state’s community property rules. Basically, if the IRA was opened while you were married, it would be considered marital property.

    If the IRA was opened prior to the marriage, then the contributions made during the course of the marriage would be considered marital property.

    Under normal circumstances, IRAs can’t be transferred or gifted to a new owner, but divorce is an exception. IRAs can be divvied up between spouses tax-free via a direct transfer to a new IRA, but if this isn’t done properly, you could end up paying taxes and penalties.

    3. Develop a new retirement savings strategy

    Once you have a new retirement number in mind and understand how much you’ll have left over after divvying up your retirement assets, you can come up with a new retirement savings strategy. This should also factor in at what age you plan to claim your Social Security retirement benefit.

    For someone in their late 50s, it’s harder to catch up — you won’t benefit from the power of compounding — but it’s not impossible to cobble together some savings.

    Jamie may need to cut back and live on less so he can direct as much as he can into savings. He may want to start by building up an emergency fund (to cover about three to six months of expenses) and paying down any high-interest debt. From there, he can start rebuilding his retirement savings.

    That includes maxing out his 401(k), especially if his employer matches his contributions. Plus, since he’s 50+, he qualifies to make catch-up contributions.

    The maximum contribution limit for a 401(k) in 2025 is $23,500, with an allowable $7,500 catch-up contribution for those 50+ (so Jamie could contribute a total of $31,000). Those between the ages of 60 to 63 can make a catch-up contribution of $11,250.

    Those aged 50+ can also make a $1,000 catch-up contribution to their IRA, on top of the $7,000 annual contribution limit, for a total of $8,000. It’s worth having a chat with a financial advisor or tax specialist to understand whether a traditional or Roth IRA makes sense for your situation — both offer different types of tax advantages, depending on your income level.

    Jamie may also want to work with his financial advisor to explore his investment options and optimize his portfolio to meet his new goals. While his marriage may be over, it doesn’t mean his retirement dreams have to be.

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

  • My wife and I are well off but we told our daughter, 21, we couldn’t afford to pay for her college — now she’s graduated with $90K in student loans and a chip on her shoulder. What now?

    Picture this: James and his wife Nola, both 62, have done well in life, earning a combined income that gives them an upper-class lifestyle. But, when their daughter Tia went to college, they told her they couldn’t afford to pay her way.

    Most of their money is tied up in investments and employer-sponsored retirement plans, as well as real estate. Aside from a lack of highly liquid assets, they also felt it was important for Tia to learn about financial responsibility.

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    But they’ve also left the door open for resentment. Now that Tia has graduated, she owes $90,000 in student debt — and she isn’t happy about it.

    Now James and Nola are wondering if there’s anything they should do to help their daughter without putting their retirement savings at risk.

    Should you pay for your child’s college education?

    This is a complex issue and there isn’t a “right” answer. For some families, paying for their child’s college education could put them into debt, possibly jeopardizing their own retirement or other financial goals.

    Of American workers and retirees saving for both future college expenses and retirement, 58% said they were delaying retirement to reach both goals, according to a survey by the Society of Actuaries. And 41% said they withdrew money from their retirement funds to pay for a family member’s tuition.

    Almost all parents (95%) expect to cover more than half of the cost of a college education for their children, according to Northwestern Mutual’s 2024 Planning & Progress Study. Roughly one in three (36%) say they’ll pay the full cost, while about two in three (64%) expect their child to pay at least something.

    While college loans exist, “there is no such thing as a retirement loan,” said Christian Mitchell, chief customer officer at Northwestern Mutual, in the study. “If parents can’t afford life in retirement, that unexpected financial burden may fall on their kids’ shoulders. That’s why it’s so important to consider every money move as part of a larger financial plan.”

    Most advisors don’t recommend dipping into your retirement savings, withdrawing from 401(k) savings or using home equity to help your child avoid college debt.

    Mitchell noted that each family will need to determine “what feels right for them,” but the key is to “act intentionally” or the “window to save for college costs may close.”

    This, perhaps, is the mistake that James and Nola made by not having honest conversations with their daughter long before she ever started applying to colleges. They left it too late, and now that window for Tia has closed.

    Read more: Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it

    Finding middle ground

    For wealthy families, the debate about paying for a college education is a tough one. On one hand, if they pay for everything, their child doesn’t have to worry about going into debt or juggling a part-time job with schoolwork.

    On the other hand, they may want their child to have some “skin in the game” so they’re better prepared for the real world. However, with the cost of a college education skyrocketing, parents may want to find some middle ground with their child.

    “The average federal student loan debt balance is $38,375, while the total average balance (including private loan debt) may be as high as $41,618,” according to the Education Data Initiative, which also points out that 4.86% of federal student loans were in default (as of Q4 2024).

    In total, Americans owe close to $1.8 trillion in student loan debt, according to Q1 2025 Federal Reserve data.

    If they could go back in time, James and Nola could have discussed the situation with Tia and explained why they couldn’t afford to pay for all of her college expenses — and perhaps worked with her to come up with some options.

    For example, they could have paid a percentage of her costs if Tia paid the remainder. They could have matched her savings from a summer job, or, they could have helped Tia research alternatives such as merit-based scholarships and grants.

    Other options to pay for college

    Students from families who earn above a certain income threshold won’t qualify for federal student aid, but they may still want to file a free application for Federal Student Aid (FAFSA).

    Many colleges require students to submit a FAFSA to be eligible for scholarships, grants, work-study funds and federal subsidized and unsubsidized loans — which Tia could have applied for.

    Even better, they could have started early by setting up a 529 plan while Tia was still young.

    It should be clear from the outset what you’re willing to contribute and what you expect your child to contribute. That’s the case even if you plan to pay for your child’s tuition in full. It should be clear if there are “strings” attached, such as whether the child is expected to go to a school close to home.

    While James and Nola can’t go back in time, they can have open, honest conversations with Tia about her debt and how they might be able to help.

    Maybe they gift her some money (keeping in mind the $19,000 annual gift tax exclusion for 2025). Or maybe they loan her some money, with or without interest, that she has to pay back at regular intervals.

    They could also co-sign a private loan, which could help Tia get a more competitive interest rate — though it’s important to have a repayment plan in place. Ultimately, if Tia can’t repay the loan, it will fall to her parents as co-signers.

    Having a plan could help ease the tension and start Tia off on the right foot as she begins a new life chapter.

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

  • I’m 57 years old and recently divorced. I walked away from my marriage with just $18K in retirement savings — with only about 10 years to catch up, how do I secure my suddenly solo future?

    I’m 57 years old and recently divorced. I walked away from my marriage with just $18K in retirement savings — with only about 10 years to catch up, how do I secure my suddenly solo future?

    Divorce isn’t just a young person’s game. For some, love is fleeting and can evaporate quickly. In other cases, it’s a bond that can last for decades until it’s worn down or suddenly broken.

    Kathryn, 57, finds herself single after nearly 30 years of marriage. Her ex was the breadwinner of the household, and she only has about $18,000 saved for her retirement.

    Since she’s about 10 years from retiring, she’s wondering if she still has time to catch up. Will she have to delay her retirement — or even forgo it altogether?

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    What is gray divorce?

    Kathryn’s situation is far from unique. Gray divorce, sometimes referred to as silver divorce, refers to couples over 50 choosing to get a divorce — often after a long marriage, and often after their kids have grown up and left the nest.

    Gray divorce rates in the U.S. have risen over time. A 2022 study found that gray divorces increased moderately between 1970 and 1990 before doubling by 2010. Rates then stagnated for those aged 50-64, but continued to grow for the 65-plus crowd. In 2019, 36% of people getting divorced were aged 50 and up.

    So, what’s behind this trend?

    For one thing, it’s more socially acceptable these days to get a divorce than it was back in the 1970s. At the same time, people are living longer. In 1970, life expectancy in the U.S. was 70.8 years, while presently it’s 78.4 years, according to the Centers for Disease Control and Prevention..

    Couples sometimes stay together for the kids, so once they’re empty nesters they decide to part ways. Or maybe they’ve just been growing apart for years and their interests have changed as they’ve grown older.

    Retirement itself could be a trigger if their financial goals aren’t in sync. But gray divorce can also have a major financial impact on a couple’s golden years, especially if one partner was the runaway breadwinner.

    How to rebuild a nest egg after gray divorce

    Divorce can take a financial toll, and those close to retirement age — or already retired — have less time to rebuild their depleted funds.

    Rebuilding isn’t easy, but it’s possible. Kathryn has $18,000 in her retirement savings, but she should also consider other sources of potential retirement income. For example, part of her divorce agreement may include access to a portion of her ex’s retirement plans.

    A qualified domestic relations order, or QDRO, is “a judgment, decree or order for a retirement plan to pay child support, alimony or marital property rights to a spouse, former spouse, child or other dependent of a participant,” according to the Internal Revenue Service. A spouse or former spouse can roll over tax-free “all or part of a distribution from a qualified retirement plan that he or she received under a QDRO.”

    Kathryn may be eligible for alimony or spousal maintenance, though the amount and duration will vary depending on state laws.

    Read more: Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it

    She’ll also want to look into Social Security. If you’re divorced, you either get benefits based on your work record or your ex’s work record, whichever is higher — so long as you were married for more than 10 years before the divorce and haven’t remarried.

    Kathryn doesn’t have to wait until her ex claims his benefit to start receiving hers. But if she claims it before reaching her full retirement age (at age 67), she’ll receive a permanently reduced benefit like anyone else.

    A decade isn’t a lot of time, but it’s still possible for Kathryn to build up her nest egg by cutting back on spending while increasing her savings rate — though that could require some sacrifices.

    Kathryn will first want to make sure she’s not leaving any money on the table in the form of shared retirement assets. From there, she can come up with a new retirement plan and project how much extra she’ll need to meet her goals.

    She’ll also want to build an emergency fund (to cover at least three to six months’ worth of expenses) and pay off any high-interest debt as quickly as possible.

    To increase her savings rate, she may want to consider taking on extra hours at work or supplementing her income with gig work. But she may also want to rethink her retirement plans, such as delaying retirement, working part-time in retirement or reducing her living expenses by downsizing or moving to a cheaper city or state.

    It could be worth consulting a financial advisor to model various scenarios and come up with a post-divorce budget and new retirement plan.

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  • My husband died suddenly last year after a short illness — can I collect his Social Security and my own at the same time or would that cause problems?

    My husband died suddenly last year after a short illness — can I collect his Social Security and my own at the same time or would that cause problems?

    Janice’s husband died suddenly last year after having a stroke. The couple were a few years away from retirement. Janice, 62, was waiting to claim Social Security at 65 when she’d also be eligible for Medicare benefits.

    Her late husband made more money over the course of his career, so he would have received a bigger Social Security retirement benefit. Now she’s wondering if she can collect both his retirement benefit and her own at the same time, or if that would cause problems.

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    The short answer is no. Here’s a more detailed look at what Social Security benefits you are entitled to after your spouse dies.

    How a spouse’s death impacts retirement benefits

    Social Security provides a variety of benefits: retirement, survivors and disability. Retirement benefits include both retired-worker benefits and spousal benefits.

    A married couple who are of retirement age are eligible for two checks from the Social Security Administration (SSA):

    • either two retired-worker benefits if both partners worked, or
    • one retired-worker benefit and one spousal benefit for the spouse who doesn’t have a retired-worker benefit.

    Read more: Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it

    A spousal benefit can be as much as 50% of a retired worker’s primary insurance amount. If their working spouse passes away, the spousal benefit is converted into a survivors benefit.

    If you’re a surviving spouse, like Janice, you can claim either your retired-worker benefit or your late spouse’s, but not both.

    Similarly, you can claim either a retirement benefit or a survivors benefit, but not both.

    You’ll receive whichever is higher, but not the total of two benefits added together.

    According to The National Academy of Social Insurance, this may substantially lower a surviving spouse’s income.

    That’s because they’re only receiving one monthly Social Security benefit instead of enjoying the combined household income of two benefits — which they could have collected as long as their spouse was alive.

    The amount Janice will receive is based on her late husband’s work record and whether he reached full retirement age, which typically falls between 66 and 67 years of age.

    You can claim your retirement benefit as early as 62, but your benefits will be reduced by a small percentage each month before full retirement age.

    After reaching your full retirement age, you’ll get a monthly bump in your check until you reach age 70.

    If a surviving spouse is already getting benefits based on their own work record, they should contact the SSA to find out if they can get more money from collecting survivor benefits.

    What you need to know about survivors benefits

    About 5.8 million Americans received Social Security survivors benefits in May, including widows and widowers, with an average monthly survivors benefit of roughly $1,566.66, according to the Social Security Administration.

    You may be eligible for survivors benefits if you’re the spouse, ex-spouse or child of someone who worked and paid Social Security taxes before they died. To be eligible, you must be 60 or older. Or, you must be 50 or older if you have a disability that occurred within seven years of your spouse’s death.

    In some cases, age doesn’t matter. If you care for children from the marriage who have a disability or are under 16, you can also apply for survivor benefits regardless of age.

    Another factor is your current marital status. If you remarry before the age of 60 (or 50 if you have a disability), you’ll no longer be eligible for survivors benefits. But remarrying after age 60 won’t impact your eligibility.

    Since Janice isn’t ready to retire, she can keep working while she receives a survivors benefit prior to reaching her full retirement age, but her benefit could be reduced if she goes over her earnings limit, which for 2025 is $23,400.

    Other family members could also qualify for survivors benefits, including ex-spouses and dependent children. If several members qualify for benefits, you’ll need to keep the family maximum benefit in mind, since exceeding that limit will reduce benefit payments.

    If your spouse passes away, you should contact the SSA right away. You’ll receive a $255 lump sum death payment, but you can also discuss your options.

    For example, you could start with survivors benefits and then switch to your retired-worker benefit at age 70, when that payment is highest.

    But if you’re already receiving your late spouse’s retirement benefit, you can’t apply for a survivors benefit unless the amount will be higher than your current benefit.

    There are a lot of factors to consider, so it could be worth sitting down with a financial advisor to crunch the numbers.

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  • ‘You willfully ruined people’s lives’: Florida man to spend 20 years behind bars for swindling customers out of $1.3M — leaving them with unfinished pools and ‘a shattered sense of security’

    ‘You willfully ruined people’s lives’: Florida man to spend 20 years behind bars for swindling customers out of $1.3M — leaving them with unfinished pools and ‘a shattered sense of security’

    Putting a pool in your backyard is a major decision — costing upwards of $100,000, according to HomeGuide — that inevitably involves disruption.

    But for Tampa Bay-area clients of Olympus Pools, the cost and disruption were far more than they bargained for.

    As WFLA News Channel 8 reports, hundreds were left with nothing but holes in their backyards and bank accounts, their money swindled by Olympus Pools’ former owner James Staten.

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    In May, he was sentenced to 20 years of prison followed by 30 years of probation — found guilty of 35 felony counts, including multiple counts of grand theft and contractor fraud.

    “The sentence in this case is based on the fact that, out of all the testimony, you willfully ruined people’s lives,” Judge Mary Handsel said during the sentencing.

    A pool contractor pays the price for fraud

    At the hearing, the prosecutor read victim impact statements to convey just how much damage Staten caused beyond unfinished pools, including this one:

    “James Staten stole nearly $25,000 from us, leaving us with an unfinished pool and a shattered sense of security. Because of his actions we were forced to dip into our 401k to complete the work, setting back not just our retirement but also our daughter’s college fund.”

    Read more: Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it

    In addition to his prison sentence, Staten must pay more than $1 million in restitution to be distributed to victims. He’s also barred from owning a business or having any credit cards while he’s on probation.

    At one time, Staten’s business — Lutz, Florida-based Olympus Pools — claimed to be the largest pool builder in the state.

    But Staten shut down the company in July 2021 amid a slew of complaints and what Staten called “constant negative media coverage.”

    Florida’s Department of Business and Professional Regulation fined Staten $1.4 million and forced him to surrender his contracting licence. Later that same year, he and his wife filed for Chapter 11 bankruptcy.

    According to prosecutors, Staten collected money from clients despite knowing their pools were unlikely to be built. He used $1.3 million of his clients’ money to fund his lifestyle.

    “He was stealing money from a lot of us,” former Olympus client Toni Rosier told WFLA.

    In addition to receiving their fraction of the restitution funding, some former clients may qualify to receive a portion of their money back through the Florida Homeowners’ Construction Recovery Fund.

    However, the amount payable is capped and is unlikely to reimburse many clients for the full amount they lost.

    So, what steps can you take to prevent this from happening to you?

    Be aware of the signs of potential fraud

    Watch out for contractors who solicit door-to-door because they “are in the area” or “have materials left over from a previous job,” the Federal Trade Commission (FTC) warns.

    Get multiple quotes for your project and don’t rush into a decision. Before making a final decision, verify the contractor’s references — and call them. Many people ask for references from previous clients and then fail to call them. Also check Better Business Bureau reports.

    Confirm that your contractor is licensed and insured. You can check the license with local or state regulators and ask the contractor for proof of insurance. Also look for a contractor who’s a member of the Pool & Hot Tub Alliance (PHTA) and ask if they provide a warranty or guarantee.

    Be vigilant of contractors who pressure you to commit, only accept cash, demand full payment upfront or want you to borrow from a lender they recommend. Also beware if they ask you to get the permits.

    Get estimates and contracts in writing. The contract should include a timeline, a detailed cost breakdown, procedures for managing changes to the project and steps for resolving disputes. If things go wrong, keep detailed written records of conversations and events.

    Set up a payment plan contingent on work milestones being completed and don’t pay in full upfront. Monitor expenses throughout the project to make sure they align with the estimate and ask for a receipt as proof of full payment once the contract is completed and paid for.

    Once the project starts, watch out for subcontractors who contact you directly for payment, have frequent or excessive unexpected expenses and materials that are lower quality than what was agreed to in the estimate. Lack of activity at the job site is another red flag.

    It may seem time-consuming to assess potential contractors and keep on top of their work, but this extra work could end up saving a lot of heartache — and your savings.

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