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Your Birth Date Affects How Social Security Change Affects You

Your Birth Date Affects How Social Security Change Affects You

By Janet Kidd Stewart, Chicago Tribune (TNS)

The cuts to a couple of key Social Security claiming strategies — squeezed into federal budget legislation in October — continue to confound seniors, whether or not they’re actually affected by the changes.

“A lot of people are contacting me in a panic about what to do, but many of them are grandfathered in and have nothing to worry about,” said Michael Kitces, a financial planner and blogger who writes frequently about Social Security claiming at www.kitces.com. “Younger people will certainly be affected, but they aren’t the highest volume of questions we’ve been getting.”

Under the new rules, after a phase-out period that will grandfather in some seniors, couples will no longer be able to collect spousal benefits if they are generated from a beneficiary who has filed for and suspended his or her own benefits. And people who file and suspend their benefits will no longer have the option of reversing course and requesting a lump-sum “refund” of benefits that in essence resets their claiming date. Also ending is the ability to file a restricted application at full retirement age for just spousal or just work-based benefits, a strategy people use to collect some money immediately, while letting the other benefit grow.

Here’s how Kitces explains the changes in detail:

If you were born April 30, 1950, or earlier: You can still file for benefits at full retirement age and then suspend them in order to earn delayed retirement credits while allowing a spouse to collect benefits on your record while you delay. Individuals can file and suspend, and then if circumstances change they can go back and collect those suspended benefits, though future benefits will be based on the earlier filing date. In both situations, the suspension must be filed by April 29 of 2016.

Born between May 1, 1950, and Jan. 1, 1954: You’ll still be able to file a restricted application for benefits, meaning at full retirement age you can choose whether to take a spousal benefit or one based on your work record. But you won’t be able to let a spouse claim benefits on your suspended application.

Born Jan. 2, 1954, or later: You won’t be eligible for the file-and-suspend strategy and you won’t be able to take just a spousal benefit or just one based on your work record while letting the other grow.

One caveat worth mentioning here is that the Social Security Administration has not yet laid out specific guidance on how these measures — hammered out in the federal budget legislation in October — will be implemented. So if there is a quirk in the calendar, the dates mentioned above could be altered slightly — no small thing for people whose birthdays fall around the dates in question.

A Social Security spokesman also said divorced spousal benefits are not affected by the change in the suspension-of-benefits policy. Some observers have been calling for clarification on the changes because it potentially could result in situations where a vindictive ex-spouse would suspend benefits just to keep a former spouse from collecting. The fact that divorced spouse benefits aren’t affected then raises some interesting questions about how far a couple would want to go to retain the ability to collect. In theory, a couple could divorce just to have the opportunity to have one person collect spousal benefits while the other continues to earn delayed retirement credits.

Kitces thinks it’s highly unlikely that couples would go to this extreme for a small bump in Social Security benefits. And doing so would negate other positive incentives in the tax code for staying together, he said.

ABOUT THE WRITER

Janet Kidd Stewart writes The Journey for the Chicago Tribune. Share your journey to or through retirement or pose a question at journey@janetkiddstewart.com.

©2015 Chicago Tribune. Distributed by Tribune Content Agency, LLC.

Photo: Donkey Hotey via Flickr

 

3 Most Common Money Mistakes When You’re Living Paycheck To Paycheck

3 Most Common Money Mistakes When You’re Living Paycheck To Paycheck

By Cameron Huddleston, GOBankingRates.com (TNS)

Millions of Americans are living paycheck to paycheck. But while around one-third of Americans, or 38 million households, are living hand-to-mouth, they aren’t technically poor, according to the Brookings Institute, a nonprofit that conducts independent research. In fact, nearly one-third of households earning $75,000 or more annually live paycheck to paycheck at least sometimes, according to a survey by SunTrust.

What this data suggests is that while you might climb the proverbial corporate ladder and make more money, poor financial habits can follow you, continuously sabotaging your finances over the years. If you’re living paycheck to paycheck, here are three common money mistakes you might be making.

YOU OVERSPEND

One in five Americans spend more than they earn, according to a Federal Reserve Board report. And 44 percent of those surveyed by SunTrust agree that spending on lifestyle purchases, such as dining out and entertainment, is part of the reason they live paycheck to paycheck and save less than they should each month.

A few years ago, Michelle Schroeder-Gardner was living paycheck to paycheck because she was spending about $1,000 a month on restaurant meals and about $500 a month on clothing. “At the time, I didn’t realize what kind of problem I had,” said Schroeder-Gardner, who now blogs about personal finance at MakingSenseofCents.com. “I was young and not very smart about money, plus it seemed like everyone else around me was doing something similar.”

She broke her cycle when she realized she had a spending problem and made a conscious decision to reign in her spending.

YOU DON’T HAVE A FINANCIAL PLAN

Only 20 percent of adults have developed a written financial plan, according to Northwestern Mutual’s 2015 Planning and Progress Study. Brian Brandow was among those without a plan for his money. As a result, he was living paycheck to paycheck.

“We finally had a rock bottom moment and had accumulated $109,000 worth of debt,” Brandow said. So he and his family built a budget and created a plan to pay off their debt. They are now debt free, and he blogs about being responsible with money at DebtDiscipline.com.

If you don’t have a plan for your money, one use of it is as good as any other. Without a plan, you invite reckless spending in your life and create new hurdles for getting ahead financially. Learn how to create a spending plan so you can align your expenses with your goals.

YOU DON’T HAVE A FINANCIAL CUSHION FOR EMERGENCIES

More than 60 percent of Americans have less than $1,000 in savings, according to a recent GOBankingRates survey. This survey suggests that the majority of people likely don’t have enough set aside to cover unexpected expenses or emergencies — which could deal a major financial blow to anyone living paycheck to paycheck.

You should create an emergency fund to help you avoid living paycheck to paycheck when unexpected expenses arise, said Bethy Hardeman, chief consumer advocate at Credit Karma. You can find extra money in your budget to set aside by looking for expenses you can cut, such as subscription services or a gym membership you’re not using, she said. Also, look for fees you can eliminate, such as bank account charges you can avoid by switching to a financial institution with no-fee checking.

You can also come up with extra cash in your budget by negotiating lower rates with your service providers, said Nicole Lapin, a financial expert and author. “Do a yearly housekeeping call to all of your major bill generators — your cable, phone and internet companies — and see if there might be a better deal available,” she said.

GOBankingRates.com () is a leading portal for personal finance news and features, offering visitors the latest information on everything from interest rates to strategies on saving money, managing a budget and getting out of debt.

© 2015 GOBankingRates.com, a ConsumerTrack web property. Distributed by Tribune Content Agency, LLC.

Photo: 401(K) 2012 via Flickr

 

With Medical Marijuana Laws Murky, U.S. Prosecutors Pursue California Cases

With Medical Marijuana Laws Murky, U.S. Prosecutors Pursue California Cases

By Evan Halper, Tribune Washington Bureau (TNS)

WASHINGTON — When Congress in effect lifted the federal ban on medical marijuana just over a year ago, Californians drove the change, which was tucked into a spending package by a liberal congressman and a conservative colleague.

A year later, marijuana legalization advocates are conflicted over how big a victory the congressional vote, which was repeated last month, has turned out to be.

“The number of raids has dropped substantially, though not completely,” across the country, said Mike Liszewski, government affairs director for Americans for Safe Access, a medical-marijuana advocacy group. A federal court ruling this past fall, if it is upheld, would limit federal agents from targeting all but operations that are clearly flouting state law, he said.

But in California, in particular, federal prosecutors continue to pursue cases, in large part because of flaws in the existing state medical marijuana law, which all sides agree is long overdue for changes. Gov. Jerry Brown has signed three measures to clarify the state law, but they won’t take effect until 2018.

So for now, the state that was the birthplace for legal medical marijuana in the U.S. remains at the center of legal disputes as federal prosecutors navigate a murky landscape in which the line between healers and drug dealers is not always clear.

The two House members who championed the new approach say prosecutors are not following the intent of Congress.

“The will of the people is clear: The majority of the states have enacted medical marijuana laws, Congress has voted twice now to protect those patients, and a federal judge has upheld” the measure, Rep. Sam Farr (D-Calif.) wrote in an email. “How many times does the Justice Department need to be told to back off before it finally sinks in?”

Farr and Rep. Dana Rohrabacher (R-Calif.) teamed up in 2014 to write the measure that said anyone legally selling medical marijuana under a state law cannot be prosecuted.

Officials from the Justice Department declined to comment, citing litigation.

Congress has put the department in a pickle, however. Federal law still classifies marijuana in the most dangerous category of narcotics, alongside heroin and LSD, substances that the law declares lacking any accepted medical use. Congress has declined to change that even as it has approved the Rohrabacher-Farr amendment, as the provision is known.

The city of Oakland is invoking that amendment in demanding federal prosecutors drop their bid to seize marijuana and other assets from Harborside Health Center, the nation’s largest dispensary, which has generated a tax windfall for the cash-strapped city.

Across San Francisco Bay, in Marin County, local officials praised a decision by a a federal judge, who ruled in October that the continued prosecution of a dispensary was an affront to the new law — only to learn last month that prosecutors plan to continue the fight through an appeal.

Complicating matters are the several states that permit the sale of marijuana for recreational use. The Obama administration has chosen to allow that experiment to continue unabated. So operations in California , like Harborside, that target patients seeking the drug to treat illnesses can still be prosecuted while shops in Denver that cater to college students operate freely.

Over the summer, Farr and Rohrabacher accused the Justice Department of illegally misappropriating federal money to continue those prosecutions, calling on for its inspector general to investigate. The department has yet to respond.

Federal officials have argued in court that their prosecutions don’t violate the Rohrabacher-Farr amendment because the occasional bust doesn’t impede the state from allowing the use of medical marijuana. After the judge in the Marin County case rejected that argument as “tortured,” prosecutors are left with the argument that the sales in question are not clearly in compliance with California law, which was written very broadly.

“The early medical marijuana laws were Trojan horses designed to allow effective legalization for anyone who could fake an ache,” said Jonathan Caulkins, a professor of public policy at Carnegie Mellon University in Pittsburgh. “California is in that category.”

Even in the case of Harborside, which state and local officials often hold up as a gold standard for the medical-marijuana business, California’s loose rules about who is permitted to buy medical marijuana have left the operations a natural target for prosecutors, Caulkins said.

“Harborside is gigantic, and the Justice Department thinks it is not providing marijuana just for kids with epilepsy or people with cancer or people with HIV,” Caulkins said.

In states that have more recently adopted medical marijuana provisions, legitimate medical-marijuana businesses are not targeted because they serve a much narrower group of clients, he said.

But the Justice Department’s continued pursuit of Harborside angers officials in Oakland. The business pays the city about $1.4 million annually in taxes.

Advocates hope it is only be a matter of time before the prosecutions subside. California is among several states poised to decide this year whether to legalize marijuana for any adult who chooses to purchase it, whether to treat an illness or to just get high. If the state adopts rules to regulate a legalized market that satisfy the Justice Department — as Colorado and Washington state have done — prosecutors will probably move on to other business.

©2016 Tribune Co. Distributed by Tribune Content Agency, LLC.

Photo: Coaster420 via Wikimedia Commons

 

2 Islamic State Operatives With Ties To Paris Attackers Reported Killed In Airstrikes

2 Islamic State Operatives With Ties To Paris Attackers Reported Killed In Airstrikes

By Alexandra Zavis and Brian Bennett, Tribune Washington Bureau (TNS)

WASHINGTON — U.S.-led forces have killed two Islamic State operatives in Syria and Iraq believed to have links to the gunmen who killed 130 people in Paris last month, a Pentagon spokesman said Tuesday.

The suspects, identified as Charaffe Mouadan and Abdul Qader Hakim, were among 10 Islamic State figures reported killed in targeted airstrikes over the last month.

Mouadan had been in direct contact with the suspected ringleader of the Paris attacks, Abdelhamid Abaaoud, a Belgian national of Moroccan descent, U.S. Army Col. Steve Warren said in a news briefing from Baghdad.

He was “actively planning additional attacks against the West” and was killed in an airstrike over Syria on Thursday, Warren told reporters.

French news reports, citing unidentified law enforcement officials, identified Mouadan as a French national of Moroccan descent who grew up in the Paris suburbs and was 26 or 27 years old.

He had been arrested in October 2012 with two friends, including Samy Amimour, one of the gunmen who took part in the Nov. 13 attacks in Paris. At the time, the trio was believed to be plotting to travel to Yemen or Afghanistan to take part in violent jihad, according to the French newspaper Le Parisien.

A French counterterrorism official told Agence France-Presse news agency that Mouadan was not known to have strong ties to Abaaoud, who was killed in a police raid on an apartment on the northern outskirts of Paris five days after the attacks.

Hakim, a veteran fighter and forgery specialist, was also part of an Islamic State external operations group that enables attacks against the West, according to the Pentagon.

He had links to the Paris attack network and was killed Saturday in an airstrike on the northern Iraqi city of Mosul, Warren said.

Other Islamic State operatives killed in the last month include finance and explosives experts, an executioner and a British-trained Bangladeshi hacker with expertise in evading electronic surveillance, Warren said.

None of these strikes is expected to deliver a knockout blow to Islamic State, according to another U.S. official, who spoke on the condition of anonymity to discuss internal assessments. But officials contend that the cumulative effect of killing individuals in the group’s middle and upper management could be significant in the long term.

Warren said recent battlefield successes, including the expulsion Monday of Islamic State fighters from a key government complex in the Iraqi city in Ramadi, were in part attributable “to the fact that this organization is losing its leadership.”

“There’s much more fighting to do,” he said. “But our ability to dismantle the facilitation networks, our ability to dismantle their ground command and control, our ability to take away some of their enforcers … that eats away at their ability to instill fear in the population they control, it eats away at their ability to extort money from the population, which of course, reduces their funding.”

Islamic State is proving harder to degrade than its precursor and rival, al-Qaida, in part because the extremist group has a more diffuse command structure.

Eliminating an external operations figure in the al-Qaida network was a “big deal,” according to the U.S. official, because only a few individuals have the authority to plan and launch attacks against Western targets.

Islamic State gives greater autonomy to its members, and more of them are using their connections in Europe and other countries to inspire and plan attacks, the official said. That reduces the impact of the loss of any single individual.

The official noted that it was no surprise that a forger was among those targeted in the last month.

When Islamic State captured towns in Syria, the official said, the militants gained control of passport and identity card-making supplies as well as bank machinery that has allowed them to forge travel documents and financial statements to help members travel under aliases.

Questions have been raised about the validity of a Syrian passport found with the body of one of the Paris attacks who blew himself up outside a soccer stadium. He is believed to have posed as a refugee in order to travel from Syria to Europe to take part in the Nov. 13 assault, which also included attacks on cafes, restaurants and a packed concert hall.

Officials in France and Belgium, where most if not all of the attackers were from, have warned that more plots were believed to be in the works.

On Tuesday, the federal prosecutor’s office in Belgium announced that two people had been arrested on suspicion of planning attacks in Brussels during the holidays.

The arrests followed searches on Sunday and Monday in the Brussels and Liege regions, as well as Flemish Brabant, that uncovered military-style training uniforms and propaganda materials from Islamic State. No weapons or explosives were found, the prosecutor’s office said.

©2015 Tribune Co. Distributed by Tribune Content Agency, LLC.

Photo: Belgian soldiers patrol Brussels’ Grand Place during a continued high level of security following the deadly Paris attacks, Belgium, November 24, 2015. REUTERS/Benoit Tessier