Get The Most Out of Credit Card Rewards for Your Next Vacation

February 1, 2025

According to a survey conducted by Lending Tree, even though 87% of all credit cardholders earn rewards, nearly 70% are sitting on unused cash back, points, or miles. Regarding travel, only 12% optimized their rewards to earn a free flight or hotel stay last year. “Many people who collect rewards are doing so with a goal in mind, such as a dream vacation with their family,” says Matt Schulz, a credit analyst at Lending Tree. “As they earn, those rewards points and miles sit unused.”

While the reasons behind leaving rewards vary, many people don’t know how to use them. Understandably, cashing in rewards benefits for the first time can be intimidating, but that’s no reason to leave value on the table.

Here’s everything you need to know about earning the most travel benefits from your spending and cashing them in for priceless vacation memories.

Compare Credit Cards to Find the Best Fit For Your Goals

Take your time comparing credit cards to find one that fits your needs, and then make it your main payment method. This means comparing bonus offers and the types of rewards offered.

You’ll want to make sure you’ll be able to use the points you earn for the travel you want. A good credit score is a normal requirement to get the best travel rewards cards, which is usually at least 670. If you’re not quite there yet, you may want to focus on improving your credit first to get the best offers.

Everything to Consider When it Comes to Bonus Offers

If you’re open to getting more than one credit card, then you may want to get a few that offer the best sign-up bonuses. A sign-up bonus involves charging a certain amount of money within a specified time period to earn the cash back or points bonus. When using your rewards for travel, you would then put that cash back or points toward your next vacation, including airfare and lodging.

For instance, with a Citi Double-Cash Card, rated the third-best credit card in 2024 by Card Critics, you could earn $200 cash back or 20,000 Thank-you points after spending $1,500 within the first six months. For most people, charging $1,500 worth of expenses over six months is feasible, but your spending capability should be the top consideration when comparing bonus offers. “Sign-up bonuses can be really helpful for folks on a tight budget,” Schulz says. “Just make sure that you’re comfortable with how much you have to spend to get the bonus.”

If you find yourself trying to spend more than you normally would to earn a sign-up bonus, then the cash-back offer likely doesn’t make financial sense. As long as you think of bonus offers as something you could earn simply by paying your existing bills, then they’re a great way to earn rewards toward a vacation you might not otherwise be able to afford.

Rack up Rewards Beyond the Sign-Up Offers

Once you’ve earned your sign-up offers, you’ll want to spend as much on your credit card to continue earning rewards. When considering which cards are the best for you, you’ll want to pay attention to the rewards they offer and what kinds of purchases qualify for reward points. Many card purchases only qualify for points in certain categories, such as gas or groceries, while others only qualify with specific experiences like dining or travel.

This is why it’s so important to think about what you’re already spending money on, because the goal is to earn rewards for what you already need to buy rather than changing your lifestyle to rack up points. “No matter how lucrative the rewards, overspending to get them doesn’t make sense,” Schulz says. “The math just doesn’t work in your favor.” If you’re someone on a budget that saves by not eating out a lot, then a card that rewards you for groceries is going to be the best fit for you, while the person who eats out and hardly ever cooks at home is going to benefit the most from using a card with dining rewards.

Know the Difference Between Types of Points

Typically, credit cards work with certain airlines and hotels where you can redeem your points, so when choosing the card for you, make sure you want to use the companies where your points will be easy to redeem and worth the most value. There are three types of reward points: fixed value, variable value, and transferable points.

It’s easy to lose track of how many points you’ve earned, especially if you decide to earn with more than one card, so consider using a spreadsheet to keep track of your earnings. Once you’re ready to redeem your points for travel, you’ve made it the most exciting part. Simply begin with your credit card’s website, which should be your first stop in redeeming your rewards. The website should have all of the information you need to know, such as comparing cash back versus points for travel or step-by-step directions for transferable points, plus any current promotions.

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Whether or not you’re on a tight budget, earning rewards that can be used toward your next vacation is something anyone who uses a credit card should be taking advantage of. As exciting as traveling can be, traveling for less is even more so. With Insureyouknow.org, you can keep track of your spending, rewards earned, and travel goals all in one easy-to-access place. Once you learn how to get the most out of your rewards, you’ll become an expert on traveling for less in no time at all.

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Medicare Grocery Allowances: Who Qualifies and Is it Worth it? 

January 15, 2025

In 2020, the Medicare Advantage expanded coverage benefits for those with chronic conditions, such as cancer, autoimmune disorders, diabetes, end-stage renal or liver disease, heart disease, and more. The coverage expansion is referred to as the special supplemental benefits for the chronically ill or SSBCI. Some additional benefits include food allowances and prepared meals, but in some instances, they may even include over-the-counter medications, transportation, and in-home support services.

If you’re interested in receiving a grocery allowance or meal benefits or need food assistance, here’s everything you need to know about the additional coverage.

How the Medicare Grocery Allowance and Meal Benefits Work

Grocery allowances and meal benefits are not the same. If you qualify for grocery allowances, they are issued through prepaid debit cards on a monthly or quarterly basis. While the grocery allowance varies by state, it is usually $50 each quarter.

Under the CHRONIC Care Act, as of 2020, Medicare Advantage plans could also provide meals anytime to keep eligible recipients from needing hospitalization. Meal benefits are often more popular than grocery allowances, but it’s usually only offered for a limited amount of time, which is typically four weeks after a hospital stay.

Knowing Which Plans Offer Food Assistance

Not all Medicare Advantage plans include food allowances, so it’s important to determine if you qualify before choosing a plan. Traditional Medicare Part A and Part B and Medicare supplement plans, which are meant to supplement gaps in coverage, do not offer a grocery allowance. Some Part C Medicare Advantage Plans do offer grocery allowances and meal benefits, such as special needs plans or SNPs and dual-eligible special-needs plans D-SNPs. D-SNPs are meant for Medicare members who are also enrolled in Medicaid and who have a chronic condition. Those with Medicare Advantage plans who are disabled or who have a low-income subsidy or LIS may also be eligible to receive grocery benefits.

The CHRONIC Care Act of 2020 gave Medicare Advantage plans the ability to offer non-medical benefits such as funds for groceries. “Therefore, the Medicare Advantage plan can decide if they want to provide those benefits, and those benefits have to be designed only for the chronically ill,” says Alexandra Ashbrook, director of the Food Research and Action Center. “The non-medical services have to be targeted to people who have at least one chronic health condition, such as those at risk of hospitalization or some other adverse health outcome requiring intensive care coordination,” she says.

Qualifications for the grocery and meal benefits vary by plan, so it’s important to check with the plan’s provider to see what they offer and if your health condition qualifies. Choosing a plan based solely on food allowances isn’t the best approach over the long run. So, even if the plan offers a grocery or meal benefit, it may not justify what you pay for the plan. Whether or not the plan covers medical needs should always be the priority. Take into account every benefit the plan offers before making a decision.

What to do if You Don’t Qualify for Medicare Food Allowances

There are still other options for those who do not qualify for the grocery allowance through their Medicare Advantage Plan. Low-income seniors 60 or older can apply for food assistance through the Supplemental Nutrition Assistance Program or SNAP. Many people don’t even realize that they qualify for these benefits. “Unfortunately, only about 48% of eligible older adults are participating in SNAP,” Ashbrook says. “That’s a really important gap that health care providers and health systems could help to close before looking at any of the other additional food programs.”

Those who are 60 or older and have an income below 185% of the federal poverty income guidelines may also qualify for the Senior Farmers’ Market Nutrition Program SFMNP or the Commodity Supplemental Food Program or CSFP. The SFMNP provides coupons for fresh fruits and vegetables, which can be used at farmers’ markets and community farms, while the CSFP is a monthly package of healthy food that the USDA distributes to local agencies for participants to pick up. If eligible, some states even offer package deliveries.

To find out if you are eligible for SNAP or either of these additional programs, you may fill out an application online. If you’re a veteran, for instance, you may be more likely to qualify for USDA food assistance programs. Even if you are not eligible for Medicare grocery allowances, SNAP, or other supplemental programs, you still have options. Meals On Wheels is another program designed to help low-income seniors access prepared meals. The meals are provided on a sliding scale based on a recipient’s income to make them an affordable option for those in need.

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If any food assistance will help you, then exploring every available benefit will pay off. Whether it’s a Medicare food allowance or a USDA-based food assistance program, helping purchase and prepare healthy foods can go a long way in improving the quality of your everyday life. With Insureyouknow.org, you may keep track of your applications, health records, and grocery budgets in one easy-to-access place for all your meal planning needs.

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Is Your Home Ready for Extreme Weather?

January 1, 2025

From wildfire season with smoky air to higher temperatures and unexpected blackouts during freezing temps, the reality of extreme weather conditions is causing homeowners to better prepare their homes. While every homeowner should feel safe at home, a recent survey by Certain Teed revealed that less than 48% of people feel confident in their home’s durability in the face of extreme weather.

The good news is that smart updates will bring peace of mind and add value to your home. While some projects cost more money and time than others, there are several that require less of an upfront investment. No matter your budget, here are five easy home improvement areas to consider to protect your home and feel safer during weather events.

HVAC Systems Can Protect Against Temperatures and Poor Air Quality

Because people spend 90 percent of their time indoors, the quality of your home’s indoor air is crucial to the quality of your home life. One way homeowners can prepare for extreme weather and climate events is to make sure they have a reliable and well-maintained HVAC system in place. While it can be difficult to predict when climate-related issues may happen, an HVAC system can maintain inside temperatures, withstand harsh weather outside, and provide filtration that improves indoor air quality no matter what unfolds.

Preventative maintenance on your HVAC system and changing the filter every 30 to 90 days will help prolong the life and quality of your investment. Keeping your system at or above 64 degrees Fahrenheit during the colder months also helps prevent expensive issues like frozen and burst pipes.

Choose the Right Roofing Materials For Your Climate

Roof upgrades significantly increase your home’s resilience as well as its value. “The roof is the first line of defense on a home,” says Teed Lucas Hamilton, manager of applied building science at Certain. “It is important to select the right materials for your climate,” he says. Impact-resistant roofing, solar reflective shingles to combat rising temperatures, and fire-resistant materials are all things to consider when choosing roofing materials. In areas where strong wind is a possibility, hurricane fastening and straps can also further secure your roof.

When updating the roof, take into account the gutters. Simple add-ons like leaf filters help prevent blockages so that water doesn’t back up during heavy rainfall. When flooding is a concern, gutters should direct drainage away from the home’s foundation. Too much water around the foundation can lead to serious structural issues in the future, such as cracks in the foundation. A sump pump, which runs automatically to keep water out of basements and away from the foundation, is another wise investment in areas with heavy rain and storms.

Consider Window Updates or Replacements

In areas where debris impact is an issue, shutters that can cover existing windows ahead of a storm can safeguard a home during large storms. Impact windows, which have a heavy-duty frame and glass that’s engineered to remain intact even if it breaks in a collision, are another option, but depending on the number of windows your home has, they can get expensive.

Less expensive alternatives to shutters and window replacements include sealing existing windows and applying tints.

“First, use caulk to seal up any holes and cracks on the outside. Then apply weatherstripping and use a window or door insulation kit to block the cold and heat from the inside,” Hamilton says. “These changes help strengthen the barrier between your home and the outdoors, saving on heating and cooling and keeping the elements outside.”

Applying window tinting is another example of an inexpensive update that can block up to 80% of summer solar heat while also keeping some heat inside during winter months. Updates such as these protect from weather and increase energy efficiency by creating a better barrier between your home and the outside elements.

Make Simple Exterior Updates

Steel doors, which are made of more durable materials than some more elaborate door styles, upgrade a home’s entry points by withstanding storms. When certain updates, such as replacing every window in the house, are not in your budget, replacing the home’s main entry points with stronger doors can be a good place to start.

Changing the color of your exterior paint is another affordable update that can help with temperature control. “You might think that choosing the exterior color of your home is only about picking what color you like best,” says Angie Hicks, co-founder of Angi, formerly known as Angie’s List. “The climate you live in is crucial to picking the right color.”

In hot climates, light colors will help to reflect the sun and keep the interior cool, while those who live in climates prone to extreme colds should choose darker tones to retain heat better.

Maintenance is Key to Safeguarding Your Property

With increased extreme weather events, your home could be damaged slowly over time. It becomes more important to inspect your home for changes and keep up on maintenance to prevent larger repairs and damage down the road. Checking your roof after storms, such as noting any cracks, sagging, or debris in the gutters, is an important part of keeping your roof resilient during the next event. Trees around your home should also be checked for cracks in large branches or soggy soil around the roots, as those should be addressed to prevent damage in a future storm. Gutters should also be cleared regularly to prevent blockages, as well as collect debris from the yard that could become projectiles.

Insureyouknow.org Make sure you’re aware of how your community issues weather alerts. While some use outdoor sirens, others depend on media and smartphones to alert residents of severe storms. No matter what kind of hazards your community may be prone to, the National Weather Service recommends developing a plan with your family ahead of time, such as knowing where your emergency meeting place is or where the safe room is in your home. Safe rooms are usually those without windows at the lowest level of your home. In the event that your home is compromised, Insureyouknow.org can protect all of your vulnerable paper documents by ensuring digital access, providing you with one less thing to worry about so that you may focus on the safety of yourself and your loved ones.

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QLAC 101

August 15, 2024

If you’ve saved well for retirement, then you may find you can cover your living expenses without needing to withdraw from your retirement accounts. But if you think that by age 73, you won’t need your full required minimum distributions or RMDs, then you might want to consider getting a qualified longevity annuity contract, or QLAC. 

Anyone between the age of 18 and 75 can purchase a QLAC, but there may be some people that this annuity makes more sense for. If you’re looking to avoid the market risk on some retirement accounts and ensure a steady, guaranteed income in retirement, a QLAC is probably a good fit for you. If you also have concerns about the longevity of your savings and having enough money later in life, then you may benefit from a QLAC. 

Here’s everything you need to know about a QLAC before deciding if it’s right for you.

How a QVAC Could Lower Your RMDs

A QLAC is a deferred fixed annuity contract sold by insurance and financial companies that you purchase with money from a retirement account, like a 401(k) or an individual retirement account (IRA).It’s important to know that Roth IRAs cannot be used to purchase QLACs as they do not come with RMDs to begin with.

RMDs are mandated starting at the age of 73 as of this year, but that will rise to age 75 in 2033. One appeal of the QLAC is that it can reduce the balance in your retirement accounts used to calculate those RMDs. “People tend to spend their RMDs,” says Steven Kaye, a financial planner in Warren, New Jersey. “So a QLAC forces people—in a good way—to leave more money in their IRAs,” he says.

One way to avoid using your RMDs is to use the funds from one of your retirement accounts to purchase a QLAC, which will guarantee that you receive regular payments for as long as you live. “So, if you used 25% of a $400,000 qualified account, your $100,000 purchase of a QLAC would immediately reduce your RMDs by 25%,” says Jerry Golden, investment advisor.  “And the income from a QLAC could be deferred until as late as age 85,” he says.

When you choose a QLAC, you’ll be able to set your payout date, which is when you’ll begin receiving payments. Just like with Social Security, the longer you wait to receive payments, the higher the payments will be. Once you have a QLAC, you’ll be able to delay RMDs until the payout date of your QLAC, which can be no later than age 85.

The Tax Benefits of Having a QLAC

Once you withdraw money from your QLAC, you’ll need to pay income taxes on it. However, a QLAC can be an efficient tax planning strategy. For example, by using $100,000 of a traditional IRA to purchase a QLAC, you’ll reduce the balance of your IRA by $100,000, which will lower the amount you’ll need to take out for RMDs. The lower your RMD, the lower your income will be on that, which could significantly reduce the income tax you’ll owe.

QLAC Contribution Limits and Inflation Riders

You are now permitted to buy a QLAC for up to $200,000 from an eligible retirement plan. Previously, you were limited to whichever was lesser of $145,000 or 25% of your account balance. The current $200,000 upper limit is a combined cap that applies to all of your eligible retirement accounts, even if you take money from different accounts or purchase more than one QLAC. But if you and your spouse have your own eligible retirement accounts, then you can each spend up to the $200,000 limit on your own QLACs.

Since a QLAC locks in future payments, you are protecting your retirement money from market dips later in life. But unless you purchase an inflation rider with your QLAC, which will lower the initial amounts you receive from an annuity, your monthly payment may lose value over time.If you’re considering acquiring a QLAC, then you’ll want to work with a financial advisor to make sure you’re picking the right one.

Considering Your Spouse When Purchasing a QLAC

Some QLACs offer a survivor payout, also referred to as contingent annuity payments. These would continue your annuity payments to your designated beneficiary, which is usually a spouse, after your death. Other QLACs offer death benefits that would return any unused premiums to your beneficiaries through a lump sum or series of payments. If you have a spouse or individuals who will depend on your annuity after your passing, then you need to make sure any QLAC you choose has one of these features. Without these features in your annuity, your survivors would get nothing.

In addition to making sure your QLAC comes with a survivor payout or death benefit, you may also consider getting a joint QLAC with your spouse. If you’re married, a joint QLAC would provide income payments that continue for as long as one of you is alive. The only downside to choosing a joint contract is that it decreases your income payments, compared to a single life contract.

When a QLAC Isn’t For You

If you’re 65 and in poor health, you probably don’t want to wait until age 85 to start receiving income payments, so a QLAC may not benefit you at all. “If the probabilities are that you have a longer than average life expectancy, QLACs can be a windfall,” says Artie Green, a financial planner. “But if you have a shorter than expected longevity, of course, that works against you with any annuitization.” QLAC recipients can use their funds on whatever they want, but often they spend it on late-in-life health care or housing costs. The purpose of a QLAC is longevity protection that could minimize or even eliminate the risks of running out of money.

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There are really only two scenarios in which a QLAC is a good fit. The first is if you have reached age 73 and do not need your RMDs to cover expenses. The second is if you think you’ll reach 73 and not have enough funds to pull from. QLACs can be a safeguard that guarantees you an income late in life, while also reducing your need for RMDs and even lowering your income taxes on them. At Insureyouknow.org, you may keep all of your financial and retirement planning in one place, making it easy for you to forecast and plan for your future.

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Six Things to Know about SIMPLE IRA

April 30, 2024

Offering a SIMPLE IRA (Savings Incentive Match Plan for Employees) to employees is an effective way for small businesses to offer their employees a retirement plan. At a glance, this plan allows both the employer and employee to make contributions, and there are less reporting requirements and paperwork involved for the small business owner. Besides the ease in which these plans can be established for employees, the main perks are tax incentives for both the employer and the employee. “They are fairly inexpensive to set up and maintain when compared to a conventional retirement plan,” says client advisor at First American Bank Karina Valido. “For employers, contributions are tax-deductible. For participants, contributions and earnings are not taxed until withdrawn.”

Even though the SIMPLE IRA is a straightforward retirement option, here are six things to know about this plan, whether you’re an employer or an employee.

  1. Employee Contribution Limits in 2024

With a SIMPLE IRA, an employee can, but isn’t obligated to, make salary reduction contributions. In 2024, the maximum amount an employee under the age of 50 can contribute is $16,000. With a SIMPLE IRA, you may also contribute to another retirement plan as long as both contributions don’t exceed the yearly limit. The annual limit for combined SIMPLE IRA and 401(k) contributions in 2024 cannot be more than $23,000 or $30,500 for people who are 50 or older. Since an employer cannot offer both plans, this would only apply to those employees who held a previous account elsewhere.

  1. Employer Contribution Requirements

Employers must do one of two things: match employee contributions or make nonelective contributions. If an employer chooses to match each employee’s salary reduction contribution, they must do so by up to 3% of their employee’s compensation. While an employer may choose to match less than 3%, they must at least match 1% for no more than two out of five years. If an employer chooses to make nonelective contributions of 2% of the employee’s compensation, they must do so for every employee, regardless of having some employees who are making their own contributions. So if an employer chooses to make nonelective contributions, then they must also match the contributions of those employees who choose to contribute to their own plans.

  1. SIMPLE IRA Tax Advantages

For employees, salary reduction contributions to their SIMPLE IRA reduces their taxable income and their investments will grow tax-deferred over time. Because it’s a tax-deferred account, you won’t need to pay capital gains taxes when you buy and sell investments within the account. Plus, unlike many other retirement plans, such as a 401(k), employer contributions to a SIMPLE IRA are immediately vested and belong to the employee.

Employers also benefit from tax incentives with the SIMPLE IRA. They can get a tax credit equal to 50% of the startup costs, or up to a maximum of $500 per year, for three years. This credit is in addition to the other tax benefits they will receive from contributing to employee retirement plans.

  1. All About Withdrawals

During retirement, withdrawals will be taxed as regular income. Before the age of 59 ½, there’s a 10% penalty on withdrawals in addition to the income taxes you would owe. With the SIMPLE IRA, the withdrawal penalty rises to 25% if the money is taken out within two years of the plan being contributed to. Under qualified exemptions, like higher education costs or first home purchases, then you may avoid an early withdrawal fee, but you would still have to pay the taxes.

  1. Eligibility for SIMPLE IRAs

The Small Business Job Protection Act of 1996 created the SIMPLE IRA. It was designed with small businesses and self-employed individuals in mind and meant to be simple, accessible, and inexpensive. “A SIMPLE IRA is a small-business-sponsored retirement plan that, as the name indicates, is simple to establish and maintain,” explains financial advisor at Marsh McLennan Agency Craig Reid. “Available to U.S. companies with 100 or fewer employees, SIMPLE IRAs are a cost-effective alternative to the mainstream 401(k) plan.”

In order to be eligible for a SIMPLE IRA, an employer must have fewer than 100 employees and have no other retirement plan in place. They must also make contributions each year. For an employee to be eligible, they must receive at least $5,000 in compensation during any two prior years and expect to receive the same during the current year.

  1. The Difference Between SIMPLE IRA and SEP-IRA

Both a Simplified Employee Pension (SEP-IRA) and a SIMPLE IRA are employer-sponsored retirement plans that offer employees a tax-advantaged way to save for their retirement. Contributions in each grow tax-deferred until they are withdrawn during retirement. They are each designed to be easily established in small businesses, especially when compared to a 401(k).

One key difference between the two plans is that while a SIMPLE IRA allows both the employer and employee to make contributions, the SEP-IRA only allows the employer to contribute. The SEP-IRA, though, does allow higher contributions, which will be limited to $69,000 in 2024, compared to $16,000 in 2024 for the SIMPLE IRA. The other main difference between the two plans is that any employer can offer a SEP-IRA, while only businesses with less than 100 employees qualify for offering the SIMPLE IRA.

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If you’re a self-employed individual, a small business owner, or you have recently begun working for a small business that offers you a SIMPLE IRA, it will benefit you to know the upsides of having one and understand the rules around the plan. With Insureyouknow.org, you can store all of your financial information and records in one place so that you may stay organized and allow yourself the best decision-making process in your retirement planning.

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Navigating the Impact of Recent Real Estate Legislation

April 15, 2024

During March of this year, the National Association of Realtors (NAR) reached a settlement agreement to resolve a series of lawsuits that had to do with the practice of tying. Tying involves the home seller’s agent setting a commission rate for that homebuyer’s agent if they help facilitate a sale. According to the NAR, 90 percent of the homes on the market in the United States are sold this way as they are listed on the Multiple Listing Service (MLS).

Each year, Americans pay $100 billion in real estate agent commissions. If the settlement is accepted, the new terms may lower the amount agents can collect in home transactions. Since the proposed rules may change how U.S. homes are bought and sold, the new terms are important for realtors and potential homebuyers to understand.

The Problem With Tying

MLSs aren’t new, as the first MLS began in the late 1800s as a way for real estate agents to share information about the properties they were trying to sell. In exchange for the sharing of information, the agents agreed to compensate other brokers who helped them sell their properties. Today, more than 800 MLSs exist where agents list their properties. Sellers benefit from this arrangement because of increased exposure of their properties, while buyers benefit because they receive a database of nearly every home on the market.

The practice of tying, when the buyers’ agent is offered a commission for facilitating the sale of another agent’s property listing, has been shown to reduce competition and drive-up closing fees. Under tying, the commission the buyer’s agent will receive is determined before that agent can actually provide any services to the buyer. This can make it difficult for the home’s buyer to negotiate closing fees as well as require the home’s seller to offer higher commissions in order to sell their home.

Because real estate agents earn their income through these commissions, they are widely known to practice steering, which involves directing their clients toward homes that offer the best possible commissions for themselves. Since only one in 600 MLSs allow their agents to publish the commission they offer to buyers’ agents, buyers are generally unaware of these agreements between agents. The lack of transparent commission agreements makes it difficult for a buyer to know if their agent is steering them away from certain properties.

What the NAR Agreement Would Entail

If the proposed NAR settlement is approved, there will be two significant changes to prevent tying. First, MLSs will not be permitted to display commission rates. Commissions however can still be negotiated through real estate professionals off-MLS. Second, real estate agents will have to explicitly agree to the exact services they’ll provide their clients through written agreements, which will be known as a Buyer Representation Agreement and will include the agreed upon compensation for the realtor. If the changes are accepted, they will go into effect mid-July. Because of this, many realtors are suggesting those who are currently looking to buy to close by the end of June in order to avoid these proposed changes to the homebuying process.

Nearly every realtor who is a NAR member is covered in the agreement, and every member would have to abide by the proposed changes if the settlement is approved. Any members of HomeServices of America would not be covered due to ongoing court cases, as well as any brokerage firms with residential transaction volume above $2 billion in 2022. Any realtor who is unsure if they are involved in the changes or have questions moving forward are urged to get their information from the NAR’s facts.realtor.

What to Know About Traditional Commission Rates

The typical U.S. sales commission rate for real estate agents is five-to-six percent, which are among the highest in the world. But agents have been advertising low-to-zero percent commission rates to appeal to buyers for years. This isn’t because they’re foregoing their profit, but because they’re rewording their commission rate as “buyer credits.” Buyer credits can already be seen offered on many listings and are determined as the buyer sees fit at closing. In other words, commission rates and agent profits have already been negotiated outside of the MLSs for some time now. That’s why many futurists predict that these new guidelines will affect the future of real estate very little.

Because agent compensation will become a negotiation, many predict increased competition among agents, which the practice of tying had reduced for some time. “Fees have been a bit rigid,” said San Diego Real Estate Professor Dr. Norm Miller. “So it is about time we see more price competition on the fee side.” At the average U.S. home price $420,000, a six percent agent commission would be $25,200. If that six percent rate is reduced by half to three percent due to agent competition, then the price to sell or buy a home could be reduced to $12,600. Clearly, that could make buying a home more affordable for many.

The Future of Real Estate

If the settlement is approved, the practices of tying and steering will likely end. Hopefully, homebuyers will be able to better negotiate the amount of commission their agent will receive or choose alternative forms of payment, such as paying by the hour or a flat fee. Homebuyer’s should also be less pressured to list their home through MLSs or use an agent at all. All of this could result in lower costs of housing transactions, but the full extent isn’t clear.

The overall effect on the economy is difficult to predict. The NAR settlement agreement would benefit middle-class families who have a large share of their wealth invested in housing. Because consumers typically share a small amount of their gains in wealth, the benefit to middle-class homeowners who sell their property is unlikely to make an influence on consumer demand. Other economists predict that the process of buying a home could involve more upfront costs if real estate agents begin foregoing commission rates, which could potentially make it less feasible for lower-income and first-time buyers to acquire property.

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If you’re in the market for buying a home, the expected changes due to the impending NAR settlement may end up affecting you very little. Besides being able to negotiate your agent’s fees and services upfront, very little is expected to change as a result of the new guidelines. At the end of the day, if you decide to use an agent when buying or selling a home, you’ll want to choose a professional you trust, regardless of these changes. Insureyouknow.org will prove to be a valuable tool in the homebuying process, as you can store all of your financial information and agreements in one easy to access place.  

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2024 Changes that Would Impact Your Retirement Finances

April 1, 2024

Changes to retirement regulations are making 2024 out to be the perfect time to reexamine your retirement planning and make sure you’re getting the most out of your savings.

The rules are constantly changing,” says director of Personal Retirement Product Management at Bank of America Debra Greenberg. “It’s always a good idea to familiarize yourself with what’s new to see whether it makes sense to take advantage of it.”

Here’s what you should know about several changes to retirement regulations in 2024.

It Pays to Plan for Retirement

While the changes to retirement regulations may seem small, Americans need all the help they can get right now. According to the National Council on Aging, up to 80% of older adults are at risk of dealing with economic insecurity as they age, while half of all Americans report being behind on their retirement savings goals.

“The IRS adjusts many things each year to reflect cost of living and inflation,” says Jackson Hewitt’s chief tax information officer Mark Steber. “It happens each year and taxpayers shouldn’t be alarmed — they might even have a bigger benefit.” Since retirement contributions are pre-tax, saving for retirement actually lowers your taxable income, which may even place you into a lower tax bracket. Plus, you may even be eligible for a tax credit of up to 50% of what you put into your retirement accounts.

Contribution Limits Will Increase

The contribution limits for a traditional or Roth IRA are increasing in 2024. The limit on annual contributions to an IRA will go up to $7,000, up from $6,500 last year.

Individuals will be able to contribute more to their 401(k) and employer-based plans as well. For those who have a 401(k), 403(b), most 457 plans, or the federal government’s Thrift Savings Plan, the contribution limit is increasing to $23,000 in 2024, which is $500 more than last year. Those who are 50 and older, can contribute up to $30,500 into the same accounts.

Starter 401k Plans are Possible

In 2024, employers who don’t sponsor a retirement plan may offer a Starter 401(k) deferral-only arrangement. A starter 401(k) is a simplified employer-sponsored retirement plan with lower saving limits than a standard 401(k). Employers are not allowed to make contributions, and employee auto-enrollment is required. In 2024, the annual contribution limit to this plan will be $6,000. Beginning this year, employees with certain qualifiable emergencies may also make penalty-free withdrawals from their 401(k) of up to $1,000, though they would still have to pay the income tax on those withdrawals.

529 Plans Can Now be Converted Into Roths

For parents who will no longer need their 529 funds for their children, the Secure 2.0 Act will allow for a portion of the 529 to be rolled into a Roth IRA. Beginning January 1st, the funds can either be used for educational expenses or put toward retirement, as a Roth IRA rollover. You may rollover up to $35,000, free of income tax or any tax penalties. The only limitations are that the 529 must have been in place for at least 15 years, and certain states may not allow the rollover.

Changes to Social Security and RMDs

In January, Social Security checks will increase by 3.2% due to the latest COLA, or cost-of-living adjustment. On average, Social Security monthly benefits will increase by $59 a month, from $1,848 to $1,907. Those who receive survivors or spousal benefits will receive even more.

For 2024, the maximum benefit for a worker who claims Social Security at FRA (Full Retirement Age)is $3,822 a month, which is up from $3,627 in 2023. For 2024, the FRA is 66 years and 6 months for those born in 1957 and 66 years and 8 months for those born in 1958. That means that anyone born between July 2, 1957 through May 1, 1958 will reach FRA in 2024.

The IRS uses a calculation based on the amount in your retirement account and your life expectancy to determine the minimum amount you are required to take out each year, known as RMDs (required minimum distributions). Secure 2.0 increased the age for starting RMDs from 72 to 73, effective in 2023. If you are subject to RMDs, then you must make your withdrawal by the end of this year or by April 1st next year if it’s your first year being eligible. So if you turn 73 in 2024, you’ll have until April 1, 2025 to make your first RMD.

Rising Medicare Costs

Anyone receiving more Social Security but paying Medicare premiums may not feel much of a difference in their increased Social Security benefits since standard Medicare Part B premiums are rising by 6%. As many participants have their Medicare premium deducted right from their Social Security payment, the $9.80 increase will take a portion of the average $59 benefit increase. The annual deductible will also increase this year from $226 to $240.

Insureyouknow.org It will always be important to review your retirement savings every year, but this is  becoming even more important to do in the face of rising costs and changing regulations. With Insureyouknow.org, storing all of your financial information in one easy-to-review place can help you ensure that you are still on track to meet your retirement goals at the start of each annual review.

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How 2024 Inflation Adjustment Will Affect Your Paycheck

March 15, 2024

This year may come with slightly larger paydays for some Americans. This is because of the new changes to taxable income and deductions that the IRS has put in place in order to help taxpayers with inflation. With the cost of living increasing without wages and salaries doing the same, the new tax adjustments are meant to help consumers deal with higher prices.

As federal income tax brackets are adjusted by 5.4% this year, the change could result in a small paycheck bump, depending on what your withholding is. Since the consumer price index only declined by .1% in November 2023, many Americans are struggling financially.

Here’s everything you need to know about the 2024 tax changes that might affect your bottom line.

Decoding Tax Bracket Creep

The new IRS tax brackets and increased standard deductions have been in effect since January 1st. These adjustments will apply to your next tax return in 2025. It’s standard for the IRS to make changes every year to account for inflation. This is done to help people with the rising costs of living and prevent “bracket creep,” which happens when inflation forces people into a higher income tax bracket without their real income having increased.

So even if you make more money this year, these changes may keep you from falling into a higher tax bracket. You may even find that you have fallen into a lower tax bracket and see an increase in your take-home pay. This becomes even more likely if your pay has stayed the same as in the previous year. For example, if you made $45,000 last year, you would have been in the 22% tax bracket. In 2024, the same $45,000 income places you in the 12% bracket, which means you’ll owe less federal taxes and have less money withdrawn from your checks.

Choose Your Deduction and Know Your Taxable Income

The federal income tax bracket that you fall into determines how much you’ll pay in taxes for the year. Your tax bracket excludes the standard deductions or any itemized tax deductions. Most people with simple taxes claim the standard deduction, which reduces their taxable income. If you receive wages from only one job and receive a W-2, then the standard deduction is usually the best way to maximize your tax refund. But if you are self-employed or have specific deductions you want to claim, then you may elect to itemize your deductions instead.

Once you calculate your taxable income by subtracting either the standard or itemized deductions from your adjusted gross income, then you’ll know which bracket you fall into and how much income tax you should owe. “You always want to keep a running total in your mind of how your income is changing,” says certified financial planner Roger Stinnett. “Because it’s complex.”

2024 Tax Brackets and Standard Deductions

For the 2024 tax year, both the federal income tax brackets and the standard deduction were raised. These amounts will apply to your 2024 taxes, which you won’t file until 2025.

For those married filing jointly with a combined income between $23, 201 and $94,300, the estimated taxes owed would be $2,320. For a single taxpayer with an income between $11,601 and $47,150, they would owe $1,160, plus ten percent of any amount over $11,600.

The standard tax deduction for 2024 for those who file single will be $14,600, which is a $750 increase from 2023. For those married and filing together, the standard deduction will be $29,200, which is a $1,500 increase from last year.

Watch Your Withholdings

The federal and state withholdings on your paycheck will determine whether or not you’ll owe taxes at the end of the year or receive a refund from overpaying throughout the year. Regardless of your changes to your income, you may be placed in a lower or higher tax bracket because of the new adjustments.

It will be important to keep track of any life changes that may affect your filing situation, such as marriage, divorce, the birth or adoption of a child, retirement, buying a home, having to file for bankruptcy, and more. If you know your situation has changed since the previous year, it will be important to adjust your withholding by filing a new W-4 with your employer. If you had a large refund or owed a large amount last year, then this is a sign to check your withholding.

Other 2024 Tax Changes to Know

The IRS also announced higher contribution limits for tax-deferred retirement plans for the 2024 tax year. Americans may now contribute up to $23,000 into their 401(k), 403(b) and most 457 plans, which is $500 more than in 2023. The limit on annual IRA contributions also increases to $7,000, up from $6,500 the previous year. For those that save for added healthcare costs, the FSA contribution limit has also increased to $3,200, which is up from $3,050 for 2023. And if you collect Social Security, then you’ll receive a 3.2% cost-of-living adjustment in 2024.

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The purpose of these tax changes is to help taxpayers feel the pain of inflation less. If you’ve noticed a higher paycheck, then different withholdings may be why. Figuring out whether or not you’ll be falling into a different tax bracket this year will help you determine if you’ll be benefiting from the new changes. Insureyouknow.org can help you store all of your financial information and tax preparation documents so that when it comes time to file, the process will be as painless as paying less taxes in 2025.

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How to Cut Down on the Cost of Owning a Car

February 15, 2024

In 2023, the average cost of owning a new car was $12,182 a year or $121 a month according to AAA. In addition to car payments, insurance, and maintenance costs, the price of gas is $5 a gallon,, which means that most U.S. households will spend $2,750 on gas per year. “If you are living paycheck to paycheck, it could put you over the edge,” says Ivan Drury, senior manager for Edmunds.com, a car shopping site. “But even if you are not, it’s very emotional. It’s in your face twice a week.”

The good news is that by cutting your expenses in other areas, such as with car insurance, you can save money and make up for the added charges at the pump. Besides simply driving less, which isn’t an option for many people, here are a few ways to make car ownership more affordable.

1. Shop Around For Car Insurance

According to J.D. Power, only 1 in 7 drivers changed auto insurers last year, but shopping around for lower premiums could save you a lot of money. In addition to your location and the type of car you own, other factors affect your rates, including your age and credit score. If you’ve improved your score within the last year, this one factor may lower your car insurance bill.

You can collect quotes through an insurance agent or use an online search engine, such as Experian, who claims to have saved drivers an average of $961 a year or $80 a month in 2021. Calling around or doing a quick search takes only fifteen minutes and could shave a lot of money off of your premium.

2. Check For Discounts and Adjust Your Existing Policy

Your existing carrier may offer discounts you don’t even know about, such as for paying your bill online and in advance. According to Zebra, paying your bill early online saves the average customer $170 a year. Bundling insurance policies, such as combining your homeowners and auto insurance, is another way insurance companies incentivize their policies through discounted rates.

There are usually three types of coverage on any given insurance policy, including liability, collision, and comprehensive. While most states require drivers to carry some amount of liability coverage, eliminating collision and comprehensive coverage could save you up to $900 a year. You may also opt to lower your car insurance premium by raising your deductible from $500 to $1,000. This makes sense if you don’t have a new or expensive car and can afford to pay the deductible if anything were to happen.

3. Outside Financing And Refinancing

One of the smartest ways to avoid high interest rates on a car payment is by securing outside financing. Compared to what the dealership will offer you, this can save you a ton of money in interest alone. Your local bank or credit union can help you shop around for the best offer. If you already have a monthly car payment, the next best thing to do is to look into refinancing your loan. Drivers who benefit the most from refinancing are those who have improved their credit score since initially securing their loan.

Of course if you can purchase a car outright, avoiding any kind of financing is always the very best option. If it’s possible for you to stick to a budget and save up, you may even be able to negotiate a better deal on the purchase price of your desired vehicle. Forty percent of the cost of owning a car is actually depreciation, which can equal more than $3,000 annually. That means that buying a gently used car is a great deal, without the rapid decline in value.

4. Sell One of Your Cars or Trade it Out

If you have a luxury or oversized vehicle, then trading your vehicle or a more practical car is always an option. Once you have a simpler car, you’ll save money on gas, insurance, and even maintenance costs. “Less fancy cars are more reliable,” says editor of Autotrader Brian Moody. “They have fewer gadgets.”

If your family has more than one car, then you may be able to sell one of them and end up saving a lot of money every month. Many families find that they adjust to sharing a vehicle, and when you need your own car for some reason, using Uber or Lyft periodically may still cost less than owning a vehicle. 

5. Save on Gas

Nearly twenty percent of the cost of car ownership comes from fuelling up. Unless your vehicle requires premium fuel, save by filling up with regular gas. You may also choose to slow down as gas mileage increases at lower speeds. If you can, try driving less, such as by walking to close destinations or starting a carpool for work. If you are able to get your annual mileage below 7,500, then your insurance company might even give you a discount on your coverage for that too. 

6. Save up for Maintenance

The cost of vehicle maintenance is equal to fourteen percent of the total cost of owning a car. By keeping up on routine maintenance and using synthetic oil, you will avoid more expensive issues down the road. When a large repair does arise, always call around to get quotes and go with the best deal. Since emergencies happen, setting up a sinking fund for unplanned car expenses is always a good idea. By putting away only $83 a month, you’ll save up $1,000 a year, which could be used for an unforeseen mechanic bill. “You could set aside money every week,” suggests Lauren Fix of Car Smarts. “Then the money will be available rather than using a credit card at a high interest rate.”

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The less money you spend on your car, the more you’ll have for other expenses in your life, from groceries to vacations. With Insureyouknow.org, you can store all of your vehicle and financial records in one place. That way when it’s time to refinance, shop around for better insurance, or sell your car, everything you need will already be at your fingertips. There’s never a good reason to throw away your hard-earned money on unnecessary expenses.

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Which is Best: Health Savings Account or Flexible Spending Account?

February 1, 2024

While a health savings account (HSA) and a flexible savings account (FSA) both help you to set money aside for health care costs, they are not the same. Both accounts are often offered by employers, but it is possible to open an HSA independently as long as you have a HSA-eligible health plan in place. FSAs however are strictly employer-based and can only be contributed to if your employer offers them to you. Here are six key differences to know between HSAs and FSAs.

  1. An HSA Belongs to You, Not Your Employer

Whether or not you opened up a HSA through your employer-offered insurance, the funds within your HSA belong to you forever. You may even use your HSA to cover health insurance costs if you leave your current job. On the other hand, FSA funds belong to your company, and when you leave them, you forfeit your FSA.

This is not to say a FSA can’t be advantageous, as long as you intend to stay with your current employer. “The FSA basically works with any kind of health insurance plan,” says Roy Ramthun, president of HSA Consulting Services. “So from that perspective, the ‘flexible’ in the name is pretty good.”

  1. Both Accounts Have Contribution Limits

Each year, the IRS determines maximum annual amounts that can be contributed to both HSAs and FSAs. Employers may also apply their own limits to their employee FSAs. For 2024, the IRS individual contribution limits for HSAs will be $4,150, while the family limit will be twice that. In 2024, the maximum contribution for FSAs will be $3,200. While a HSA has a higher contribution limit, your employer may be contributing to your FSA for you, which may allow you to contribute more of your earnings into your own HSA.

  1. HSA Funds Carry Over

With an HSA, you may carry over unused funds from year-to-year indefinitely. This is helpful when you have more in your account than you can use before the year’s end. With the HSA, your funds won’t go wasted. This is why it is a great way to save up for unexpected health costs down the road.

Alternatively, FSA funds must be used before the year is over, or you’ll forgo the existing funds when the calendar year starts over. Some employers may allow you to carry over part of the funds or provide you with a grace period to use your funds, which is generally two and a half months. Since FSAs are offered through your employer, it will be important to inform yourself of their policies around the account.

  1. FSAs are More Accessible at the Beginning of Each Year

While your FSA funds don’t rollover, if you or your employer plan to contribute your entire limit at the beginning of the year, then that entire amount is available to you immediately. HSA funds accumulate over the year, which means that if you need access to more coverage midyear, you may not have enough money in your HSA to pay your medical bills. The upside to this is that you should be able to reimburse yourself for previous medical expenses from your HSA once those funds become available.

  1. The HSA Can be an Investment Strategy

Unlike an FSA, the HSA can gain interest over time. Couple this with the fact that your funds carry over year to year, and the HSA offers the potential for growing quite a sizable nest egg for potential health care coverage. According to the Fidelity Retiree Health Care Cost Estimate, an average retired couple age 65 in 2023 may need up to $315,000 saved just to cover health care expenses in retirement, while a single individual will need approximately $157,500.

  1. At 65, the HSA Can Act as a 401K or IRA

Before the age of 65, you will be subject to a 20% penalty if you use your HSA or FSA funds for anything other than medical expenses. But once you’re 65 or older, that fee is waived, which means that those HSA funds are only subject to income taxes no matter how you use them. While you avoid the 20% penalty over the age of 65 with a FSA as well, those funds can still only be used for health care coverage.

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Both HSAs and FSAs can prove to be valuable parts of a health coverage plan. Whether or not your employer offers a FSA to you in addition to health insurance coverage for you and your dependents will of course factor into your decision making about whether or not an added HSA will be necessary. Insureyouknow.org can help you store all of your financial and medical information in one place so that you can stay organized and make the best decisions when planning for your family’s health coverage.

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