Medicare won’t cover all of your health-care costs during retirement, so you may want to buy a supplemental medical insurance policy known as Medigap.  Offered by private insurance companies, Medigap policies are designed to cover costs not paid by Medicare, helping you fill the gaps in your Medicare coverage.

When’s the best time to buy a Medigap policy?

The best time to buy a Medigap policy is during open enrollment, when you can’t be turned down or charged more because you are in poor health.  If you are age 65 or older, your open enrollment period starts when you first enroll in Medicare Part B.  If you are not yet 65, your open enrollment period starts when you turn 65 and then lasts for six months.  A few states also require that a limited open enrollment period be offered to Medicare beneficiaries under age 65.

If you don’t buy a Medigap policy during open enrollment, you may not be able to buy the policy that you want later.  You may find yourself having to settle for whatever type of policy an insurance company is willing to sell you.  That is because insurers have greater freedom to deny applications or charge higher premiums for health reasons once open enrollment closes.

What’s covered in a Medigap policy?

Under federal law, only 12 standardized plans can be offered as Medigap plans (except in Massachusetts, Minnesota, and Wisconsin, which have their own standardized plans).  Each Medigap policy is labeled with the letters A through L. Plan A is the basic benefit plan, while Plan J offers the most coverage. All cover certain services, including Medicare coinsurance amounts.  Plans B through J also offer some combination of other benefits.  These include coverage of Medicare Part A and B deductibles, and preventive medical care.  Plans K and L are designed to provide protection against catastrophic expenses.  They have lower premium costs than other Medigap plans, but require you to pay some higher coinsurance costs until you meet an annual out-of-pocket limit.

You can buy the Medigap plan that best suits your needs.  But it’s important to note that not all Medigap plans are available in every state.

Are all Medigap policies created equal?

Generally, yes. Although Medigap policies are sold through private insurance companies, they’re standardized and regulated by state and federal law.  A Plan B purchased through an insurance company in New York will offer the same coverage as a Plan B purchased through an insurance company in Texas.  All you have to do is decide which plan that you want to buy.

However, even though the plans that insurance companies offer are identical, the quality of the companies that offer the plans may be different.  Look closely at each company’s reputation, financial strength, and customer service standards. And check out what you’ll pay for Medigap coverage. Medigap premiums vary widely, both from company to company and from state to state.  You can find a tool on the Medicare website (www.medicare.gov) that will help you compare Medigap policies offered in your area.

Does everyone need Medigap?

No. In fact, it’s illegal for an insurance company to sell you a Medigap policy that substantially duplicates any existing coverage you have, including Medicare coverage.  In general, you won’t need a Medigap policy if you participate in a Medicare managed care plan or private fee-for-service plan, or if you qualify for Medicaid or have group coverage through your spouse.

You may also not need to buy a Medigap policy if you work past age 65 and have employer-sponsored health insurance.  You can still enroll in Medicare, but your employer-sponsored insurance will be your primary payer, so you’ll submit claims to them first.  Medicare will be the secondary payer, paying costs covered by Medicare but not covered by your employer’s plan.  If you find yourself in this situation, you may want to enroll in Medicare Part A, since it’s free. Remember that if you enroll in Medicare Part B, your open enrollment period for Medigap starts.  If you don’t buy a Medigap policy within six months, you may be denied coverage later or charged a higher premium.

In addition, you may not need to buy a Medigap policy if you are covered by an employer-sponsored health plan after you retire (e.g., as part of a retirement severance package).  In this case, your employer’s plan will be your primary payer, and Medicare will be your secondary payer.  However, if you wish, you can convert your employer-provided plan into a Medigap policy. In fact, some insurance policies automatically change coverage when you reach age 65 because they assume that you will sign up for Medicare.  Keep in mind, though, that coverage and premium amounts may change.

For more information on financial planning, visit www.iamllc.biz 

Just what you need, right? One more time-consuming task to be taken care of between now and the end of the year. But taking a little time out from the holiday chores to make some strategic saving and investing decisions before December 31 can affect not only your long-term ability to meet your financial goals but also the amount of taxes you’ll owe next April.

Look at the forest, not just the trees

The first step in your year-end investment planning process should be a review of your overall portfolio. That review can tell you whether you need to rebalance. If one type of investment has done well–for example, large-cap stocks–it might now represent a greater percentage of your portfolio than you originally intended. To rebalance, you would sell some of that asset class and use that money to buy other types of investments to bring your overall allocation back to an appropriate balance. Your overall review should also help you decide whether that rebalancing should be done before or after Dec. 31 for tax reasons.

Also, make sure your asset allocation is still appropriate for your time horizon and goals. You might consider being a bit more aggressive if you’re not meeting your financial targets, or more conservative if you’re getting closer to retirement. If you want greater diversification, you might consider adding an asset class that tends to react to market conditions differently than your existing investments do. Or you might look into an investment that you have avoided in the past because of its high valuation if it’s now selling at a more attractive price. Diversification and asset allocation don’t guarantee a profit or insure against a possible loss, of course, but they’re worth reviewing at least once a year.

Know when to hold ‘em

When contemplating a change in your portfolio, don’t forget to consider how long you’ve owned each investment. Assets held for a year or less generate short-term capital gains, which are taxed as ordinary income. Depending on your tax bracket, that rate could be as high as 35%, not including state taxes. Long-term capital gains on the sale of assets held for more than a year are taxed at lower rates: 15% for most investors, 0% (through tax year 2010) for anyone in the two lowest tax brackets. (Long-term gains on collectibles are slightly different; those are taxed at 28%.)

Your holding period can also affect the treatment of qualified stock dividends, which are taxed at the more favorable long-term capital gains rates if you have held the stock at least 61 days. (Those days must occur within the 121-day period that starts 60 days before the stock’s ex-dividend date; preferred stock must be held for 91 days within a 181-day window.) The lower rate also depends on when and whether your shares were hedged or optioned during those 61 days. Check with your tax professional to make sure you don’t inadvertently incur unnecessary taxes by selling or buying at the wrong time.

Make lemonade from lemons

Now is the time to consider the tax consequences of any capital gains or losses you’ve experienced this year. Though tax considerations shouldn’t be the primary driver of your investing decisions, there are steps you can take before the end of the year to minimize any tax impact of your investing decisions.

If you have realized capital gains from selling securities at a profit (congratulations!) and you have no tax losses carried forward from previous years, you can sell losing positions to avoid being taxed on some or all of those gains. Any losses over and above the amount of your gains can be used to offset up to $3,000 of ordinary income ($1,500 for a married person filing separately) or carried forward to reduce your taxes in future years. Selling losing positions for the tax benefit they will provide next April is a common financial practice known as “harvesting your losses.”

Example: You sold stock in ABC company this year for $2,500 more than you paid when you bought it four years ago. You decide to sell the XYZ stock that you bought six years ago because it seems unlikely to regain the $20,000 you paid for it. You sell your XYZ shares at a $7,000 loss. You offset your $2,500 capital gain, offset $3,000 of ordinary income tax this year, and carry forward the remaining $1,500 to be applied in future tax years.

Time any trades appropriately

If you’re selling to harvest losses in a stock or mutual fund and intend to repurchase the same security, make sure you wait at least 31 days before buying it again. Otherwise, the trade is considered a “wash sale,” and the tax loss will be disallowed. The wash sale rule also applies if you buy an option on the stock, sell it short, or buy it through your spouse within 30 days before or after the sale.

If you have unrealized losses that you want to capture but still believe in a specific investment, there are a couple of strategies you might think about. If you want to sell but don’t want to be out of the market for even a short period, you could sell your position at a loss, then buy a similar exchange-traded fund (ETF) that invests in the same asset class or industry. Or you could double your holdings, then sell your original shares at a loss after 31 days. You’d end up with the same position, but would have captured the tax loss.

If you’re buying a mutual fund in a taxable account, find out when it will distribute any dividends or capital gains. Consider delaying your purchase until after that date, which often is near year-end. If you buy just before the distribution, you’ll owe taxes this year on that money, even if your own shares haven’t appreciated. And if you plan to sell a fund anyway, you may minimize taxes by selling before the distribution date.

Know where to hold ‘em

Think about which investments make sense to hold in a tax-advantaged account and which might be better for taxable accounts. For example, it’s generally not a good idea to hold tax-free investments, such as municipal bonds, in a tax-deferred account (e.g., a 401(k), IRA, or SEP). Doing so provides no additional tax advantage to compensate you for tax-free investments’ typically lower returns. Similarly, if you have mutual funds that trade actively and therefore generate a lot of short-term capital gains, it may make sense to hold them in a tax-advantaged account to defer taxes on those gains, which can occur even if the fund itself has a loss. Finally, when deciding where to hold specific investments, keep in mind that distributions from a tax-deferred retirement plan don’t qualify for the lower tax rate on capital gains and dividends.

Be selective about selling shares

If you own a stock, fund, or ETF and decide to unload some shares, you may be able to maximize your tax advantage. For a mutual fund, the most common way to calculate cost basis is to use the average cost per share. However, you can also request that specific shares be sold–for example, those bought at a certain price. Which shares you choose depends on whether you want to book capital losses to offset gains, or keep gains to a minimum to reduce the tax bite. (This only applies to shares held in a taxable account.) Be aware that you must use the same method when you sell the rest of those shares.

Example: You have invested periodically in a stock for five years, paying a different price each time. You now want to sell some shares. To minimize the capital gains tax you’ll pay on them, you could decide to sell the least profitable shares, perhaps those that were only slightly lower when purchased. Or if you wanted losses to offset capital gains, you could specify shares bought above the current price.

For more information on financial planning, visit www.iamllc.biz 

When you determine how much income you’ll need in retirement, you may base your projection on the type of lifestyle you plan to have and when you want to retire. However, as you grow closer to retirement, you may discover that your income won’t be enough to meet your needs. If you find yourself in this situation, you’ll need to adopt a plan to bridge this projected income gap.

Delay retirement: 65 is just a number

One way of dealing with a projected income shortfall is to stay in the workforce longer than you had planned. This will allow you to continue supporting yourself with a salary rather than dipping into your retirement savings. Depending on your income, this could also increase your Social Security retirement benefit. You’ll also be able to delay taking your Social Security benefit or distributions from retirement accounts.

At normal retirement age (which varies, depending on the year you were born), you will receive your full Social Security retirement benefit. You can elect to receive your Social Security retirement benefit as early as age 62, but if you begin receiving your benefit before your normal retirement age, your benefit will be reduced. Conversely, if you delay retirement, you can increase your Social Security benefit.

Remember, too, that income from a job may affect the amount of Social Security retirement benefit you receive if you are under normal retirement age. Your benefit will be reduced by $1 for every $2 you earn over a certain earnings limit ($13,560 in 2008, up from $12,960 in 2007). But once you reach normal retirement age, you can earn as much as you want without affecting your Social Security retirement benefit.

Another advantage of delaying retirement is that you can continue to build tax-deferred funds in your IRA or employer-sponsored retirement plan. Keep in mind, though, that you may be required to start taking minimum distributions from your qualified retirement plan or traditional IRA once you reach age 70½, if you want to avoid harsh penalties.

And if you’re covered by a pension plan at work, you could also consider retiring and then seeking employment elsewhere. This way you can receive a salary and your pension benefit at the same time. Some employers, to avoid losing talented employees this way, are beginning to offer “phased retirement” programs that allow you to receive all or part of your pension benefit while you’re still working. Make sure you understand your pension plan options.

Spend less, save more

You may be able to deal with an income shortfall by adjusting your spending habits. If you’re still years away from retirement, you may be able to get by with a few minor changes. However, if retirement is just around the corner, you may need to drastically change your spending and saving habits. Saving even a little money can really add up if you do it consistently and earn a reasonable rate of return. Make permanent changes to your spending habits and you’ll find that your savings will last even longer. Start by preparing a budget to see where your money is going. Here are some suggested ways to stretch your retirement dollars:

• Refinance your home mortgage if interest rates have dropped since you took the loan.
• Reduce your housing expenses by moving to a less expensive home or apartment.
• Sell one of your cars if you have two. When your remaining car needs to be replaced, consider buying a used one.
• Access the equity in your home. Use the proceeds from a second mortgage or home equity line of credit to pay off higher-interest-rate debts.
• Transfer credit card balances from higher-interest cards to a low- or no-interest card, and then cancel the old accounts.
• Ask about insurance discounts and review your insurance needs (e.g., your need for life insurance may have lessened).
• Reduce discretionary expenses such as lunches and dinners out.

Earmark the money you save for retirement and invest it immediately. If you can take advantage of an IRA, 401(k), or other tax-deferred retirement plan, you should do so. Funds invested in a tax-deferred account will generally grow more rapidly than funds invested in a non-tax-deferred account.

Reallocate your assets: consider investing more aggressively

Some people make the mistake of investing too conservatively to achieve their retirement goals. That’s not surprising, because as you take on more risk, your potential for loss grows as well. But greater risk also generally entails greater reward. And with life expectancies rising and people retiring earlier, retirement funds need to last a long time.

That’s why if you are facing a projected income shortfall, you should consider shifting some of your assets to investments that have the potential to substantially outpace inflation. The amount of investment dollars you should keep in growth-oriented investments depends on your time horizon (how long you have to save) and your tolerance for risk. In general, the longer you have until retirement, the more aggressive you can afford to be. Still, if you are at or near retirement, you may want to keep some of your funds in growth-oriented investments, even if you decide to keep the bulk of your funds in more conservative, fixed-income investments. Get advice from a financial professional if you need help deciding how your assets should be allocated.

And remember, no matter how you decide to allocate your money, rebalance your portfolio now and again. Your needs will change over time, and so should your investment strategy.

Accept reality: lower your standard of living

If your projected income shortfall is severe enough or if you’re already close to retirement, you may realize that no matter what measures you take, you will not be able to afford the retirement lifestyle you’ve dreamed of. In other words, you will have to lower your expectations and accept a lower standard of living.

Fortunately, this may be easier to do than when you were younger. Although some expenses, like health care, generally increase in retirement, other expenses, like housing costs and automobile expenses, tend to decrease. And it’s likely that your days of paying college bills and growing-family expenses are over.

Once you are within a few years of retirement, you can prepare a realistic budget that will help you manage your money in retirement. Think long term: Retirees frequently get into budget trouble in the early years of retirement, when they are adjusting to their new lifestyles. Remember that when you are retired, every day is Saturday, so it’s easy to start overspending.

For more information on financial planning, visit www.iamllc.biz 

settlement letter

Everyone makes mistakes, sometimes expensive ones. Credit card debt in America has risen to a record $790 billion, and many Americans owe more than $20,000 on an unsecured credit card. Despite how immersed in personal debt people are, there is still a reasonable hesitation about taking “the easy way out” by declaring bankruptcy. Naturally, bankruptcy advice is the most valuable asset some families can have at this difficult time in their lives.

Bankruptcy advice has gotten more liberal over the years due to changing laws. To avoid scores of debtors flooding onto the streets with no property and nothing left to live for, the laws have changed to allow debtors to keep certain property, despite filing for bankruptcy. The debtor may keep up to $2,500 in cash, $2,400 in auto equity and unlimited 401k funds. Additionally, by law, employers cannot fire an employee who files for bankruptcy, although potential employers can choose not to hire a new employee based on that factor. Often with a filing, debtors will need to attend credit restoration and debt management courses.

When you’re seeking advice about bankruptcy, be sure to double-check what can and can’t be discharged. For instance, you’ll still have to pay off Uncle Sam if you owe taxes for the past three years. However, if you have personal income taxes over 3 years old, then you can discharge them through bankruptcy. Fiduciary taxes cannot be discharged, nor can most student loans and liens. If you owe child support or alimony, you will still have to pay up. If you don’t list debts on your bankruptcy petition, then they will not be covered. If you have debts from drunk driving or other “willful and malicious” harm, you’ll still have to pay your dues. However, there are many things that can be removed when you file for bankruptcy, such as all unsecured credit card debt, wage garnishments, utility termination, fraudulent credit claims and foreclosure.

Professional bankruptcy advice says that there are several ways to determine if bankruptcy is right for repairs to your financial situation. First of all, make a monthly budget, adding up all your expenses, such as rent/mortgage payments, utilities, food, gas or bus fare, clothing, car loans, etc. and all of your monthly income, including employer, benefits, food stamps, pensions, disability, etc. If your income is a lot less than your expenses, then bankruptcy may not help. If you suspect you may need credit cards to live even after filing, then you may need to get another job or cut expenses. If your debts are already a few years old, then you may want to just hang in there for several more years until they come off your report or you pay them.

Consumers use their credit cards to make purchases at stores, for online shopping, paying bills and by giving it out over the telephone for purchases. Fraudsters are always at work trying to get your credit card details so that they can steal your money and your identity. It is absolutely essential that you keep the details of your credit card information safe at all times to protect yourself from such unscrupulous characters

If you have a PIN or password with which you can access your credit card details online, this is something that you need to memorize and keep the written information regarding it in a safe place. You should never give out these details to anyone, no matter how much you trust this person. In fact, it is better that you destroy the information about your credit card when you receive it in the mail. Your credit card statements can also be a source of information to con artists. If it is not possible to burn the statements when you don’t need to keep them for your records, then you should tear them into tiny pieces before you put them in the trash.

Have you received any phone calls in which you are asked for your credit card information? One of the examples of recent events in credit card fraud involves phone calls in which consumers are told they can save money on their interest rates. When they give the details of their credit cards thinking they are going to save money, they find that the caller has actually gained the information needed to max out the cards. Another call consumers receive is one telling that they have won a trip but they have to give their credit card to ensure the confirmation of the prize. Again there is no prize – only fraud

Phishing scams through emails are other ways in which you can become a victim of credit card fraud. You may receive an email from your bank or other credit card provider asking you to update the personal information associated with the card. This usually involves asking you to enter your card number along with the three-digit code on the back of the card along with personal information such as your mother’s maiden name. This is enough information for these people to max out your card leaving you with the bill

In recent months, consumers in the UK have been the subject of fraudulent emails from persons claiming to be from HM Revenue and Customs. In these email, consumers are told that they are entitled to a tax refund and in order to claim this money they must enter their credit card details. The government will never contact you by email and will never ask for a credit card number. However, there have been many consumers who have fallen for this and have lost large amounts of money

The same thing applies to an email that claims to come from the HM Revenue and Customs. UK residents have received such emails telling them that their tax returns have been reviewed and that they are entitled to an additional refund that will be paid to their credit card account. The government will never contact you in this manner and will only do so in writing. Disregard such emails and delete them from your computer

credit card application

With the word “recession” being used more and more, it is no surprise that an increasing number of people are scrambling to find ways to cut their expenses and save more money. One way people can enjoy some savings is to transfer their credit card balances to one of the best credit cards on the market that are offering special incentives. The credit card companies are busy catering to people who want better rates, by offering great credit card deals with low introductory interest rates, bonuses and generous rebates on purchases made with their cards.

The good news is that because these credit companies are competing with each other to find new credit card customers, they are getting increasingly inventive and tempting in the types of deals they are offering. These deals are often in the form of very low interest rates, even no interest charges during an introductory period, cash back and rebates, and other types of incentives and bonuses that can help put money back into the pockets of consumers.

However, even with all of the great bonuses, incentives and attractive features of many of these credit card deals, it can still be very difficult to decipher which are the best credit cards for the long term benefit of the consumer. Because of this, industry experts often caution consumers to do their due diligence and take sufficient time to fully and completely understand all aspects of the credit card offers they are considering.

Before you submit any credit card application, whether is it for a card that is offering some special rates or incentives or for a credit card for a retailer you would like a credit line with, you should always strive to be well informed about the particulars of the terms and conditions that you will be agreeing to. This means that is it a good idea to stop and ask questions about the details of the offer, read through the FAQ section if you are on the website of a credit card company, and carefully read through all of the fine print that makes up the agreement.

Often the credit card companies will bury some very important and pertinent information about your future credit card account in the fine print of the terms that are on the application. This fine print can also be confusing many times and it is a good idea to read through it repeatedly until you feel you understand it fully. This is particularly important when reviewing some of the very attractive and tempting deals that are offered today.

If you still have questions after reading through the terms and conditions a couple of times, then you should ask a trusted friend to help you or call the credit card company for clarification. It is very important to gain this understanding before you sign your name on the application because once you sign the credit card application and submit it, you are obligated to the terms of the contract, whether you fully understand them or not.

These days, the most attractive credit card deals for most consumers are those that provide a very low introductory interest rate, or even a period with no interest. In addition, some also offer generous rebates on purchases, which can add up significantly over time. However, it is still important to read all the fine print because the cards with the best incentives also tend to have the harshest penalties, which could end up being detrimental down the road.

There are losses of over one billion dollars each year, due to the international problem of credit card skimming.Althought is more commonly used in Europe, Asia and Latin America, this particular type of credit card scam is starting to be used in the United States.

This is an easy credit card scam to run when your card is used during the time of a simple purchase and it is scanned by the store employee at the store’s cash register.That employee may swipe your card for payment, but may make an additional swipe of the card with a small machine they hold in their hand, known as a skimmer, that also stores information from your card into its system.The skimmer can retain the information on hundreds of debit and credit cards and then it is used by unscrupulous people to print counterfeit cards.

After your information has been fed into the skimmer, it can be downloaded into a computer and emailed to any worldwide location, as there are skimming rings working all over the world.It was not as easy to commit this fraud in the past, because the card skimmers were very large machines that had to be hidden under the check-out counter.Due to the great advancements in technology of the past decade, the skimmer is streamlined and the small hand-held machine is easy to hide from the view of the unknowing customer.These credit card skimmers are easy to buy, as they can be purchased over the internet at around three hundred dollars, but the machine used to make counterfeit credit cards is a much larger investment, which costs in a neighborhood from five thousand to ten thousand dollars.

This type of credit card skimming scam is done in another way; the credit card information is pulled directly out of the card terminals by inserting a skimmer bug and later taking it out with the credit card information on it.The older credit card terminals are the type that can be more easily violated in this kind of skimming process and since the newer terminals have been utilized the bugging scam has all but stopped happening.

When the credit card information thieves have gained all the pertinent facts on you they will begin shopping for the things they want and charge it to your credit card number.Over half of credit card fraud is committed over the internet, as shopping by this method is becoming more and more popular, card fraud on the internet has also increased. The internet is also used by the thieves to make certain that the card’s information is valid through the purchase of many low ticket items in order to be assured that the card is active.   

The cardholder is one victim of this crime and is responsible for up to fifty dollars on the total amount charged on his card, however, the major victim in all of this is the merchant whose employee did the skimming.After the skimming is discovered the merchant has to pay for the cost of the investigation and is one hundred percent responsible for the losses caused by the criminal activity and is also at risk for the loss of the merchandise.The costs of investigating the charge-back claims of their customers is paid through the investigation fees paid by consumers and businesses to the credit card companies.

The persons who are operating this type of credit card scam know that a purchase of at least $2000 has to be made before any criminal investigation can start on these skimming activities.

Visit JSNet.org for more information on credit cards and various credit card articles on how to protect your credit cards from fraud.

credit cards

By definition, a credit report is the summary of how an individual manages his or her finances. This is quantified through a number, known as the FICO score, which ranges from the lowest score of 500 to the highest of 850. The average and acceptable score is about 700. The usage of credit cards is one of the important factors in assessing a person’s credit score, as is debt management. These factors clearly indicate an individual’s ability to manage credit.

There are five major factors that go into the making of credit reports and knowing these factors will help you in adopting the right debt management principles and obtaining the best credit score possible. The factors that directly influence your credit score are: your credit history, the total credit attached to your name, the timeliness of making your payments, and the number of your accounts, either closed or opened in the near past. If you have a low score, then credit repair measures are advised. The easiest and the fastest way to repair your credit score is by showing that you can pay your bills on time.

If you want to have your credit repaired in a hurry, then there are two excellent short cuts that can be used for this purpose. First, use your credit cards for all your regular purchases and ensure you pay the bills each month on time, either in full or more than minimum. Secondly, use debt consolidation services in case you find you are not capable of repaying all of your outstanding loans. Ensure that you always make your payments on time, so that your effort will be reflected in your credit report and your FICO score.

The credit report and the FICO score are the means of verification about your repayment ability that lenders refer to when you ask for credit. If you have a score that is lower than 600, then you will find it difficult to get credit. At this stage, you can initiate measures to improve your score by using debt consolidation and strategic credit card usage. With a little care and perseverance, you can improve your score in less than one year.

Debt settlement vs credit counseling

Nowadays, credit counseling is no longer the way to go when it comes to regulating your spending. Unlike in the past, credit counseling has now become a social service function. Think Guidance Counselor anyone?

The industry was known by the general term CCCS (Consumer Credit Counseling Service) and operated under the general guidelines of the NFCC (National Foundation for Credit Counseling).

As the world progressed, the credit counseling landscape has changed with it as well. Even if this is that case, more and more credit counseling services continue to flourish because of the simple fact that more and more people are in debt nowadays. Some credit counseling services could be very helpful though, but the majority just isn’t up to par. You may want to look into how debt negotiation works and compare it to credit counseling. Credit counseling you can do with a company while you can do it yourself debt negotiation.

Some credit counseling services are good, others are bad, and then there are those that are just evil.

1.It's better if a credit counseling service is associated with the BBB. You can check with the BBB to see if the company has a good record and if there have been any complaints filed by others. Membership in the NFCC (National Foundation for Credit Counseling) or AICCA (Association of Independent Consumer Credit Counseling Agencies) is also acceptable.

2.  Don’t be silly. Debt Management problems need a long time to address. If a credit counseling service tells you they can solve your money problems fast - be wary! This can never happen. Credit counseling takes 5-7 years and debt negotiation works in 1-3 years.

3.  Be certain that the debt management company can help with all of your unsecured debt and don’t just deal with a few companies. Make sure that you are able to maximize the services your debt management counseling service is offering you to make sure that you are secured at all times.

Nearly 45 million people today receive some form of Social Security benefits, including 90 percent of retired workers over age 65. But Social Security is more than just a retirement program. Its scope has expanded to include other benefits as well, such as disability, family, and survivor’s benefits.

How does Social Security work?

The Social Security system is based on a simple premise: Throughout your career, you pay a portion of your earnings into a trust fund by paying Social Security or self-employment taxes. Your employer, if any, contributes an equal amount. In return, you receive certain benefits that can provide income to you when you need it most–at retirement or when you become disabled, for instance. Your family members can receive benefits based on your earnings record, too. The amount of benefits that you and your family members receive depends on several factors, including your average lifetime earnings, your date of birth, and the type of benefit that you’re applying for.

Your earnings and the taxes you pay are reported to the Social Security Administration (SSA) by your employer, or if you are self-employed, by the Internal Revenue Service. The SSA uses your Social Security number to track your earnings and your benefits.

Finding out what earnings have been reported to the SSA and what benefits you can expect to receive is easy. Just check out your Social Security Statement, mailed by the SSA annually to anyone age 25 or older who is not already receiving Social Security benefits. You’ll receive this statement each year about three months before your birthday. It summarizes your earnings record and estimates the retirement, disability, and survivor’s benefits that you and your family members may be eligible to receive. You can also order a statement at the SSA website, at your local SSA office, or by calling (800) 772-1213.

Social Security eligibility

When you work and pay Social Security taxes, you earn credits that enable you to qualify for Social Security benefits. You can earn up to 4 credits per year, depending on the amount of income that you have. Most people must build up 40 credits (10 years of work) to be eligible for Social Security retirement benefits, but need fewer credits to be eligible for disability benefits or for their family members to be eligible for survivor’s benefits.

Your retirement benefits

If you were born before 1938, you will be eligible for full retirement benefits at age 65. If you were born in 1938 or later, the age at which you are eligible for full retirement benefits will be different. That’s because full retirement age is gradually increasing to age 67.

But you don’t have to wait until full retirement age to begin receiving benefits. No matter what your full retirement age, you can begin receiving early retirement benefits at age 62. Doing so is often advantageous: Although you’ll receive a reduced benefit if you retire early, you’ll receive benefits for a longer period than someone who retires at full retirement age.

You can also choose to delay receiving retirement benefits past full retirement age. If you delay retirement, the Social Security benefit that you eventually receive will be as much as 6 to 8 percent higher. That’s because you’ll receive a delayed retirement credit for each month that you delay receiving retirement benefits, up to age 70. The amount of this credit varies, depending on your year of birth.

Disability benefits

If you become disabled, you may be eligible for Social Security disability benefits. The SSA defines disability as a physical or mental condition severe enough to prevent a person from performing substantial work of any kind for at least a year. This is a strict definition of disability, so if you’re only temporarily disabled, don’t expect to receive Social Security disability benefits–benefits won’t begin until the sixth full month after the onset of your disability. And because processing your claim may take some time, apply for disability benefits as soon as you realize that your disability will be long term.

Family benefits

If you begin receiving retirement or disability benefits, your family members might also be eligible to receive benefits based on your earnings record. Eligible family members may include:

• Your spouse age 62 or older, if married at least 1 year
• Your former spouse age 62 or older, if you were married at least 10 years
• Your spouse or former spouse at any age, if caring for your child who is under age 16 or disabled
• Your children under age 18, if unmarried
• Your children under age 19, if full-time students (through grade 12) or disabled
• Your children older than 18, if severely disabled

Each family member may receive a benefit that is as much as 50 percent of your benefit. However, the amount that can be paid each month to a family is limited. The total benefit that your family can receive based on your earnings record is about 150 to 180 percent of your full retirement benefit amount. If the total family benefit exceeds this limit, each family member’s benefit will be reduced proportionately. Your benefit won’t be affected.

Survivor’s benefits

When you die, your family members may qualify for survivor’s benefits based on your earnings record. These family members include:

• Your widow(er) or ex-spouse age 60 or older (or age 50 or older if disabled)
• Your widow(er) or ex-spouse at any age, if caring for your child who is under 16 or disabled
• Your children under 18, if unmarried
• Your children under age 19, if full-time students (through grade 12) or disabled
• Your children older than 18, if severely disabled
• Your parents, if they depended on you for at least half of their support

Your widow(er) or children may also receive a one-time $255 death benefit immediately after you die.

Applying for Social Security benefits

You can apply for Social Security benefits in person at your local Social Security office. You can also begin the process by calling (800) 772-1213 or by filling out an on-line application on the Social Security website. The SSA suggests that you contact its representative the year before the year you plan to retire, to determine when you should apply and begin receiving benefits. If you’re applying for disability or survivor’s benefits, apply as soon as you are eligible.

Depending on the type of Social Security benefits that you are applying for, you will be asked to furnish certain records, such as a birth certificate, W-2 forms, and verification of your Social Security number and citizenship. The documents must be original or certified copies. If any of your family members are applying for benefits, they will be expected to submit similar documentation. The SSA representative will let you know which documents you need and help you get any documents you don’t already have.

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