4 Mattress-Shopping Gotchas

Buying a mattress fits somewhere in between buying a car and buying a home on the dreaded “babe in the woods” scale. As a big-ticket, infrequent purchase, consumers who go looking for a better night’s sleep find themselves navigating a hazy world full of intentional brand confusion and seemingly meaningless price tags. Buying a mattress can feel like buying a car, as sales staff are often pushy. And it can feel like buying a home because you have to live with the choice for a decade or more — heck, many folks buy mattresses less often than homes, as anyone who has ever moved a bed can tell you.

The rarity of the purchase means consumers are a “babe in the woods,” knowing little about what they should buy or how they should buy it. In other words, they are easy marks for less-than-scrupulous sales staff. We’re going to try to change that equation today.

1. Brand Confusion

There are a few overriding principles that mattress shoppers should understand. First, while comparison-shopping is a great idea, stores and manufacturers make this intentionally difficult by slapping different brand names on what is essentially the same mattress. That makes it harder, but not impossible, to engage in showrooming: trying out a model in a store, then buying it online for a lower price.

2. Meaningless Price Tags

Speaking of price, get ready to negotiate. Price tags on bedding mean even less than price tags on cars. Ignore the percent of MSRP claims, or the “sales.” All that matters is the price. Most stores will match whatever price you can find somewhere else (assuming you can match models), so try to work that way. If you can’t agree on a direct-model comparison in a store, you are probably shopping in the wrong store.

3. No Real Test Drive

Remember, it’s also nearly impossible to try out a mattress in a store by lying on it for five minutes in street clothes while people stare at you. The mattress isn’t “broken in.” You aren’t asleep and turning. You aren’t even sleepy — your heart is probably racing. So it’s a good idea to try out different models at a friend’s house if possible. One reader suggested an excellent idea: If you have a great night’s sleep at a hotel, find out what brand of mattress it was, and try to buy that.

4. Problems After the Purchase

That leads to the fourth principle: it’s all about the returns. Mattress sales folks I’ve chatted with say that, in the end, prices and delivery costs have a way of flattening out, as long as you do due diligence and bargain reasonably well. The real gotchas of mattress shopping happen after the sale.

Because you won’t know if the purchase is right for at least two weeks, the retailer’s return policy is absolutely critical. Equally important is the manufacturer’s warranty policy. Not all 10-year warranties are the same, as Constance Brinkley-Badgett found out.

“Our mattress failed after about two months. Giant sink holes where we sleep. The retailer replaced it with a different model, but it was a major hassle and took numerous calls to the manufacturer and the store owner,” she said.

“Jack” is a former mattress salesman who maintains an excellent website called The Mattress Nerd — he asked that we not publish his last name. He offered several warnings about mattress purchases gone bad.

First, “returns” to the retailer often aren’t possible.

“Most places don’t let you return a mattress. You can only exchange, and then you can only exchange for something the same price or higher. Also, everybody has a different policy on how long you have to exchange, and sometimes the fees can be pretty high,” he said.

Second, invoking the warranty can come with a series of problems.

“If the mattress starts sagging, it might not be covered under the warranty,” he said. “Most innerspring mattresses have a ‘tolerance’ of 1.5 inches, which means if there’s a dip in your mattress 1.4 inches deep, the company will say that’s a normal impression and there’s nothing to be done. Foam mattresses usually have a tolerance of under an inch. Also, if there’s a stain on the mattress — even a little one — or if the frame you have doesn’t have enough legs, they’ll deny your warranty claim even if it has nothing to do with the sag.

“Speaking of warranty, be careful of ‘prorated’ warranties. Some manufacturers will have a warranty of ’10 years prorated,’ sometimes written as 1/10. Meaning, it’s one year of a full warranty, but in years two through 10, you only get a portion of your money back towards a new mattress if it sags,” he said. “Some unscrupulous salesmen will say it ‘has a 10-year warranty’ but then will neglect to mention that it’s prorated.”

Add-ons can often be costly, too. Many stores will try to sell buyers a mattress cover. Buying one isn’t a bad idea, Jack said, as it will help protect the purchase and might make warranty claims easier. But buy a cover elsewhere — a cover that sells for $100 at a mattress retailer can cost only $50 elsewhere.

Finally, there is some good news in the mysterious world of mattress stores — internet disruption strikes again. In the past 24 months, there’s been a small explosion of online dealers offering clear pricing and easy shipping, thanks to innovations that allow shipping of tightly compressed foam mattresses. Brands including Casper, Leesa and Tuft & Needle are catering to millennials who like buying everything online, but anyone shopping for a new bed should consider them. Buyers lose the ability to test out a bed in a store, but these brands come with liberal return policies to compensate. They aren’t cheap, but each has several mid-priced models. And, as standard shipping, delivery can be free and easy.

Keep in mind that mattress sellers often offer financing to interested shoppers — here’s a good read on why you should check your credit before buying a mattress. (You can check your credit scores for free on Credit.com to see where you stand.)

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This article originally appeared on Credit.com.

This article by Bob Sullivan was distributed by the Personal Finance Syndication Network.


2.2 Million ‘Boomerang’ Homebuyers Will Re-Enter the Market in the Next 5 Years

Millions of homeowners who had difficulties paying their mortgages after the housing bubble burst are nearing a point at which they could once again qualify for a home loan, according to new analysis from TransUnion. In 2015, 700,000 U.S. consumers will be capable of re-entering the housing market, and within the next five years, that population (called “Boomerang Buyers”) is expected to grow to 2.2 million.

TransUnion, one of the three major credit reporting agencies, studied the population of credit-active U.S. adults over the course of several years — the end of 2006 (the end of the bubble, when prices began to decline), the end of 2009 (when the bubble burst) and the end of 2014 — to determine the figures. Between 2006 and 2014, TransUnion was able to track 180 million consumers, and in 2006, 48% (78 million) of that population had a mortgage, and 8% (7 million) of that group had trouble repaying that loan between 2006 and 2009. By December 2014, 18% (about 1.3 million) had rebuilt their credit to meet Fannie Mae underwriting guidelines, and TransUnion estimates 2.2 million of the remaining 5.7 million former homeowners will rebuild their credit to that point within the next five years.

To be considered eligible to re-enter the mortgage market, consumers have to have no unpaid judgments, garnishments or outstanding liens; no accounts past due; a FICO credit score of at least 620; and enough time elapsed between the negative event occurred and when they wish to re-enter the mortgage market (i.e. four years after a short sale and seven years after a foreclosure), according to TransUnion. Even among the 18% of consumers who have rebounded from the credit damage they sustained during the financial crisis, the majority (58%) have yet to re-enter the mortgage market.

“As boomerang buyers who experienced foreclosures or other negative impacts become eligible to re-enter the mortgage market, they may not immediately do so if they are not aware they are eligible again, or feel daunted by their prior experience,” said Joe Mellman, vice president and head of TransUnion’s mortgage group, in a news release about the data.

Rehabilitating your credit after missing payments on your mortgage or losing your home to foreclosure can certainly be intimidating, and it requires a lot of patience. That doesn’t mean you should stay away from the mortgage market if you desire to own a home. When working toward your goal of becoming a homeowner again, regularly monitor your credit (you can do that for free on Credit.com) to track your progress and understand how your financial behaviors affect your credit scores. The foundation of a good credit score is making loan and credit card payments on time, paying other bills so they aren’t sent to collections and keeping your balances of revolving lines of credit (such as credit cards) as low as possible.

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This article originally appeared on Credit.com.

This article by Christine DiGangi was distributed by the Personal Finance Syndication Network.


6 Ways to Make the Most of Your Summer Job

Growing up in Cincinnati, Jake Cain spent his summers as a teen working at the Great American Ballpark, home of the Cincinnati Reds Major League Baseball team. He started in concessions, where he earned roughly $70 for five to six hours of work. When sales were good, bonuses boosted his pay to more than $100. When he turned 18, he worked as event staff checking bags as people walked into the games. “It’s exciting, the time flies by, and you really make decent money for the amount of time you spend there,” he says.

But summer jobs can be more than an opportunity to just pick up extra cash. “Although many young people are looking for money first,” says Cain, who now runs the website EmployedTeenagers.com, “the savvy teen should be looking for the most valuable experience.” Whether you are a teen looking for a summer job, or a parent of one who is, here are strategies for making the most of summer employment.

1. Make Connections

Bill Fish worked as a golf caddy at a country club and says the experience was invaluable. “Neither of my parents went to college, and by caddying, I was able to interact with successful people, learned a great deal about how to converse with someone, and walked about 10 miles a day while lugging around a bag,” he explains. The money was “nice” but just as important, he says, was that it gave him the “motivation to succeed in school and life.” He went on to launch an online marketing company that was acquired by a private equity firm then founded ReputationManagement.com. He recommends caddying as a great summer job for teens. “I wouldn’t trade that experience for anything,” he says.

2. Go Where the Work Is

Leon LaBrecque, founder of LJPR, LLC, says his teenage children have had to go where the jobs are. “My daughter and her friend (both very qualified) couldn’t find anything in the Detroit Metro area,” he says, “but when they came up to a resort area in northwest Michigan, both had more offers than they had time for instantly. My daughter and her friend each got two summer jobs.”

It isn’t feasible for all teens to relocate for the summer, but staying with relatives who live in resort areas, or finding a job in a summer camp may be an option for some.

Matt Heller landed a job as a ride operator with an amusement park when he turned 18. “It was a great place to learn about people, specifically regarding customer service and teamwork,” he says. “It also proved to be an invaluable education in learning to deal with large groups of people (i.e the general public) and it taught me how to handle some pretty stressful situations.” In fact, he wound up working in the industry for many years, and now supports the attractions and amusement park industry through his consulting firm, Performance Optimist Consulting. The pay for these seasonal jobs “isn’t the highest,” he says, but “in my opinion, they more than make up for it with the real-world experience they provide.” Some positions will be limited to those age 18 and older, but for the most part, these venues are looking for workers who are dependable and enjoy working with the public.

3. Do What You Love

Sarina Haryanto has pieced together work as a camp counselor, lifeguard and math tutor, says her mother, Marguerita M. Cheng, CEO of Blue Ocean Global Wealth. Her jobs have allowed her to pay for two study abroad trips: one to Southeast Asia and the other to UAE.

Sarina first earned her lifeguard and CPR certification at the county pool. When they had a job opening, she applied. She also contacted a pool management company that has contracts at various neighborhood pools. Working as a lifeguard pays “$8.60 to $20 per hour depending on venue (neighborhood pool, county recreation center, sports club, country club or college),” says Cheng, while private swimming lessons can net $15 to $30 for a 30-minute lesson. Sarina is in her fourth year of working as a lifeguard (now at the university she attends) and is also working on getting her water safety instructor certificate, which will allow her to earn even more.

As a math tutor, Sarina earns $25 an hour. She’s secured jobs through word of mouth, and especially enjoys tutoring girls. “The student can learn (math) from another girl, which is extremely inspirational and empowering,” says her mom.

Their overall advice? “Look at your interests and hobbies as an entry point.”

4. Do the Dirty Jobs

Is your teen having trouble finding work? Don’t write off the jobs no one else wants.

LaBrecque says his son picked tomatoes one summer. “He came home filthy and sweaty, but he talks about that summer job with relish.” His daughter sold shoes and learned that she hated working in retail. But she “came away a much better salesperson.” His youngest worked on a farm and “loved every grueling second.” As for LaBrecque, he says he “broke concrete, did asphalt paving and shoveled horse manure. It was a great lesson on what I didn’t want to do.”

5. Learn How Taxes Work

Teens’ summer jobs will often give them their first exposure to taxes. Understanding how teens and taxes works is crucial, says Jennifer McGimsey, CPA, CFP, with Emerald Spectrum Advisors. She explains:

As a teen, chances are your parents claim you as a dependent on their tax return. Therefore, you will not be subject to federal income tax on earnings less than $6,300, which is the standard deduction for 2015. If you are not claimed as a dependent on someone else’s return, that number increases to $10,300 since you can also deduct your personal exemption. If you are certain that your annual earnings will be below the applicable threshold, you can request that your employer not withhold federal income taxes. When you fill out your W4, indicate “Exempt” in line 7 to request that your employer not withhold federal income taxes. Keep in mind that even if you are not subject to federal income tax, you are likely subject to other payroll taxes such as Social Security and Medicare taxes.

Some summer jobs are exempt from payroll taxes. For example, if you provide babysitting or mow yards and are under 18, you are exempt from payroll taxes. Also, if you work for the family business and are under 18, you could be exempt from payroll taxes.

Your employer may desire to compensate you as a contractor rather than an employee. That sounds great at first since income taxes or payroll taxes won’t be withheld from your check. The downside… self-employment taxes. You will be subject to self-employment tax of 15.3% for any amounts that you earn above $400. You will be able to deduct your business expenses from your earnings, but that involves keeping good records of those expenses. Unless you are truly a contractor, be cautious about agreeing to be paid as one.

6. Start Saving Now

Not surprisingly, financial planners share a consensus that a summer job is a great way to get a teen into the habit of savings. “Having earned income makes you eligible to contribute to retirement accounts like IRAs and Roth IRAs. You can contribute an amount equal to your earned income, subject to the 2015 max contribution of $5,500,” says McGimsey.

A little can add up. A teen who socks away just $1,000 in a Roth IRA for four years starting at age 16 could have $84,000 socked away at age 65 assuming a 7% annual return, or $127,000, assuming an 8% annual return, explains Dave Demming, CFP and president of Demming Financial Services Corp. “Starting early gives you such a huge start,” he says.

Of course, not all teens are going to be thrilled about setting aside money for retirement. LaBrecque says that in his household, his kids are expected to pitch in 25% of the cost of college. So when it comes to summer jobs, “We have a ‘parent match’,” he says. “Save $1 for college, and the bank of Mom and Dad matches 100%. Heck, we’re paying anyway, so why not get some mileage and ingrain the saving and matching habit early?”

Finally, teens can learn a lot from the job-hunting process itself.  “Up to 80% of jobs are never listed publicly,” says Cain. “So be proactive and approach a local business that you have a true interest in and find out if there is a way you can help.” That’s a life lesson many of us will have to learn at some point or another. It might as well be while we’re young.

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This article originally appeared on Credit.com.

This article by Gerri Detweiler was distributed by the Personal Finance Syndication Network.


How to Improve Your Credit Score By Labor Day

It’s summer, and now hardly feels like the time to “work” on anything. But some things — like boosting your credit score — can be worth some extra motivation. And if you’re looking to finance a large purchase after Labor Day, now’s the time to work on your score.

1. Know Your Weaknesses

First step: If your score is not where you want it to be, make sure you understand why. The biggest factor in scoring is on-time payments, which accounts for about 35% of your score. So if late payments have been a problem, your first move should be to make sure you pay on time going forward. Automated payments are one way to do this. If the idea scares you because you are afraid that an unusually expensive purchase could leave you without enough funds in your bank account, consider automating what is normally your minimum payment (or slightly higher, to accommodate an occasionally large purchase). That way, you avoid paying late and safeguard your score. A single late payment can cause your scores to drop significantly, so paying on time should be a priority.

2. Pay Down Debt

Second priority should be whittling away at those high credit card balances. Ideally, you want to avoid having a balance that is more than 20%-25% or so of your credit limit, and those with the best credit scores use less then 10% of their limits. If you are using 50% of the limit of one card, and 5% of two others, consider trying to reduce the balance with the high “debt usage” ratio (the one at 50% of the limit) first. (Other ways to get lower credit utilization is to ask your card issuer for a higher credit limit or to apply for an additional card. But you should be aware that applying for new credit can cause a small, temporary dip in your score.)

The good news about reducing balances is that you won’t have to wait long to see improvement in your scores. While the effect of late payments can linger for years, once you’ve gotten rid of a high balance, the fact that it was up there in the past shouldn’t hurt you since credit scores are calculated based on the information in your credit reports at the time the score is requested. You have two or perhaps three billing cycles before Labor Day. If your balances are typically higher than 30% of your credit limit, focus on moving the needle to below 30%. If you’re already there, shoot for less than 10%.

3. Don’t Rush to Apply for New Credit

Your credit age also figures into your score, so be cautious about opening new credit, which can reduce the average age of all your accounts. Account mix (whether you have more than one kind of credit — i.e. credit cards and a car loan) and account inquiries (as when you apply for credit) also count, but each factor affects only about 10% of your score, so your efforts are best focused on making sure you’re paying on time and that you are keeping your balances low.

Monitor your progress carefully. There are thousands of scores, and monitoring the same score month to month is the way to see how you’re doing. You can check two of your credit scores for free every month on Credit.com to track your progress.

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This article originally appeared on Credit.com.

This article by Gerri Detweiler was distributed by the Personal Finance Syndication Network.


Money 101: How to Get Your Credit Ready for College

For many students, the beginning of your college career is also the beginning of your transition to adulthood. You will likely have more freedom — and responsibility — than you have ever had before. One of the most important aspects to being an adult is planning ahead and living with intention, especially when it comes to your finances and building credit. As a credit coach, I’ve assembled the top five tips to help you start to build healthy credit and begin your life as a responsible adult.

1. Get a Credit Card

Now that you are breaking out on your own, you may want to consider getting your own credit card. It’s likely to be a low-limit card, but that’s OK. Going heavily into credit card debt is too easy and certainly not a good thing, especially early on in your financial life. Used responsibly, a credit card can help you build good credit – you can do so by regularly using the card for purchases you’ve already budgeted for and paying the bill in full each month. One way to make it easy is use the credit card to pay a regular bill like your cellphone, then pay the credit card bill in full. You can create an automatic payment so that your payments are never late.

2. Put Bills in Your Name

Now that you are moving out of your parents’ home to attend college, it’s a great chance to take responsibility for your bills and switch them into your name. And if it’s a credit-based account, this can also help build your credit.

3. Pay Bills On Time

Once you have bills in your name, it’s important to do whatever you have to do to make sure they are paid on time. Use automatic payments, email alerts, reminder functions on your cellphone, or any other necessary technology aids to help you remember to pay your bills on time. Late payments can negatively affect your credit for years to come, so always pay on time.

4. Consider Different Types of Credit

Having a mix of credit types (mortgage, credit cards, auto loan, student loans, personal loans) can benefit your credit score if they’re managed responsibly — and as a college student you may not even have to try very hard at this one. If you have a credit card and student loans, you’re off to a good start. It’s good to have a few different types of accounts and a good payment history.

5. Handle Credit Responsibly

Having credit as a young person can test your will. However, learning to control your financial impulses sooner rather than later can help you in the long run, so start practicing now. It’s tempting to buy a fancy dinner or new pair of shoes using your credit card if they’re not in your budget. Just remember the bill always comes due, so avoid overcharging or overburdening yourself with debt. Using too much of your available credit (more than 25%) can negatively impact your credit score and burden you with added stress that you certainly don’t need as you enjoy your college years.

So how will you know if your new habits are making a good impact on your credit? The best way to find out is by regularly checking your credit reports and credit scores. You can get your credit reports for free every year from the three major credit reporting agencies at AnnualCreditReport.com. Check your reports to make sure they’re accurate. You can also get your credit scores for free from many sources, including Credit.com, where you get two of your scores updated every month. Following the same score over time can give you a general idea of your credit health. If you see any big, unexpected changes to your score is a sign for you to check your credit reports for any issues.

Start making a habit of these steps now and you will be well on your way to building a good credit score, which can help you immensely in the future when you are ready to consider other important steps to adulthood — like buying your first home.

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This article originally appeared on Credit.com.

This article by Jeanne Kelly was distributed by the Personal Finance Syndication Network.


Rep. Jim Langevin: What We Should Be Doing to Protect Our Kids’ Credit

An 18-year-old looking to purchase his first car.

A young woman applying for the student loan that will put her through college.

A foster youth aging out of the system and eager to get a place of his own.

These are exciting milestones in the lives of young people, turning points that mark new beginnings and the start of independence. Now imagine you’ve reached this crossroads only to discover that your identity had been stolen. Instead of the pristine, untapped credit record you’re expecting, you find years of charges, debt and defaults racked up by a criminal using your name and Social Security number.

It’s a scary thought, and not as rare as you may think. Identity theft has been the top consumer complaint received by the Federal Trade Commission for more than a decade, and those complaints increasingly involve minors or young adults tapping into their credit for the first time. The ensuing chaos and barrage of paperwork is a difficult maze to navigate for most adults, never mind young people who have not yet even opened their first credit card.

[Related Article: How to Use Credit Monitoring to Protect Your Child’s Identity]

Children are particularly vulnerable because they have little reason to access their credit histories. By the time the discrepancies are discovered, the damage has been done. We must make it easier for parents to protect their children’s financial futures.

All children are vulnerable to identity theft, but foster youth are especially susceptible. Their personal information, including Social Security number, is passed through many hands, increasing the chances of abuse. Moreover, when they age out of the system, they often lack a parent advocate to fight on their behalf. As a co-chair of the Congressional Caucus on Foster Youth and someone who grew up with foster siblings, this is an issue about which I care deeply.

In 2011, I successfully incorporated a provision into the Child and Family Services Improvement Act mandating free credit checks for foster youth over 16 years old, giving them time – and assistance – to clear inaccuracies from their records before they aged out of the system.

[Related Article: The Signs Your Identity Has Been Stolen]

I believe similar protections are necessary for all children, and I continue to call on my colleagues in Congress to enact a solution.

The Protect Children from Theft Act, which I introduced in April, aims to safeguard children from becoming victims of identity theft. The bill directs the Consumer Financial Protection Bureau to write a rule that gives parents and guardians the ability to create a protected, frozen credit file for their children. Placing a freeze on a credit report would prevent lenders and others from accessing a credit report entirely, which in most instances would stop an extension of credit. I hope that this legislation, if passed, would create a simple, easy-to-understand process for families to protect their child’s financial interests. New parents are consumed with many questions and concerns; diapers and teething likely take precedence over their child’s future credit score. We need a process by which parents and guardians have an easy, streamlined way to freeze a child’s credit.

As co-founder and co-chair of the Congressional Cybersecurity Caucus, I am well aware that cybersecurity is not a problem that can be solved, only managed. An often overlooked component to that management is resilience, being able to recover from an incident. We are all increasingly reliant on technology and the data that drive it; today, we trust a multitude of networks with personal financial data and private information, including health care records and, yes, even our Social Security numbers. If we want to benefit from the economic efficiencies of technology but still avoid identity theft, we need personal cyber resiliency so that we can recover when our data are compromised. We need to keep tabs on who has our personal information and what is at risk in the case of a breach. We need to check our credit scores, put alerts on our credit cards and work with our banks to ensure our financial information is as safe as possible. And we need to exercise the same vigilance for our children and their data.

[Related Article: How Does a Credit Freeze Work?]

I will continue to fight to protect children from identity theft to give them a fair shot when their time comes. Let’s share our good cyber habits with the next generation and make sure that when they are ready to buy that car, take out that student loan or sign a lease on that new apartment, identity theft doesn’t derail the milestone.

This story is an Op/Ed contribution to Credit.com and does not necessarily represent the views of the company or its affiliates.

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This article originally appeared on Credit.com.

This article by Rep. Jim Langevin was distributed by the Personal Finance Syndication Network.


Is a ‘Set It & Forget It’ Strategy Right for Your Retirement?

Planning for retirement can be stressful: How much money will I need? How should I save it? What will help me ensure the lifestyle I want after I leave the workforce? There are so many savings vehicles, both employer-sponsored and independent, to choose from. You may have heard of one kind called a target-date fund and not been quite sure what it is or how it works. Here’s the rundown.

The Basics

A target-date fund “targets” the year you want to retire. You’ll likely see this option when you are choosing how much to contribute to your 401(k). When picking a target-date fund to use as your retirement-savings vehicle, you choose your expected retirement year. You may not have the exact year as an option, since these tend to be offered in five-year or 10-year increments, so choose the year closest to your expected retirement date. The mutual fund invests in stocks, bonds, and cash equivalents, continuously re-balancing based on performance and the proximity to your target date.

When you are young and your date is far away, a target-date fund will give you more exposure to risk for greater potential future reward. When you begin getting closer to your date, your portfolio will become less risky. To be clear, the returns on this long-term investment strategy always depend on the markets and are not guaranteed.

Pros & Cons

One of the best aspects of a target-date is convenience for investors. The fund does the work of rebalancing and adjusting for risk tolerance as you get closer to retirement. Since your risk is determined by the investment firm managing the fund, you do not have the chance to adjust your allocations unwisely so many think it can save you from yourself. Since these funds are easy and low-risk, you may be thinking that there has to be a downside.

Some critics think target-date funds are not specialized or personal enough as different people are comfortable with different levels of risk. Just because you’re further from retirement, doesn’t mean you may want the level of risk pre-determined by a 2060 target-date fund, for example. No matter your feelings about how many stocks your retirement fund should hold, you will have the same breakdown as anyone else who picks that same fund. These funds can also come with hefty fees.

Of course, just because you have a target-date fund doesn’t mean that’s the extent of your retirement plan. Keep in mind that target-date funds don’t take into account your other investment vehicles or their risk level.

Should I Get One?

Ultimately, target-date funds are primarily for investors who would like a mix of asset classes without all the effort it would usually require to get that. You may want to consider such a fund if you do not want the responsibility of actively managing your portfolio as you age.

While it can offer diversification, ease and automatic adjustment benefits, it’s important to think carefully as you set a target date for retirement. You can also use these as an additional income strategy, setting the date for before or after your actual estimated retirement time depending on  if you want to be less or more aggressive respectively.

Deciding if a target-date fund is right for you does not follow a formula. It’s a good idea to consider how comfortable you are with risk, how hands-on you like to be with your investments, what other financial resources you have, and the retirement you want to achieve to help figure out if this is right for you. This is your hard-earned money and your retirement, so it’s important to understand what you are getting into.

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This article originally appeared on Credit.com.

This article by AJ Smith was distributed by the Personal Finance Syndication Network.


Why 1 in 4 Americans Are Willing to Give Their DNA to a Bank

For most Americans, the username-password security feature isn’t good enough anymore. A quarter of consumers said they’d share their DNA with their bank, if it meant greater security for their personal and financial information, according to a survey from Telstra, a telecommunications and information services company in Australia.

About two-thirds of Americans surveyed also said they would prefer their smartphones use biometrics (i.e. a fingerprint) as the gatekeeper of secure information.

The Telstra data is based on a survey of 318 financial services executives in Europe, the U.S. and the Asia Pacific region and 4,272 consumers in seven countries — it’s unclear what share of the responses came from the U.S. or what the margin of error is.

According to the data, more than half of U.S. consumers said security of their finances and personal information is their top priority when choosing a financial institution, over things like interest rates and ease of accessing funds, which are traditionally important considerations when choosing a bank. Given the increasing popularity of mobile banking — a recent report from Javelin Strategy & Research said only 17% of consumers prefer to visit a bank branch to access their checking accounts — it makes sense that consumers would want to know there’s more than a username and password between whoever is holding their phones and their financial information.

Biometric security includes things like voice, facial, fingerprint and iris recognition, ideally ensuring only you can access your bank account on the mobile device. Many of the newest smartphones are capable of biometric security, making the features seem within reach for financial institutions.

Even if your banking app isn’t yet asking for your fingerprints, there are a lot of things you can do to increase your security. First, it’s a good idea to password-protect your phone, because your personal information isn’t limited to your banking app, and you don’t want anyone accessing that without your permission. On top of that, it’s crucial you look at information security from multiple angles: Monitor your bank accounts and credit information for signs of unauthorized activity, because despite your best efforts, it’s likely a fraudster will access and abuse your personal information at some point. As soon as you identify suspicious activity — for example, you’re checking your credit score and it dropped dozens of points for no reason you can think of — immediately investigate the problem. The sooner you alert your financial service providers and the credit reporting agency to unauthorized activity, the faster you’re likely to recover from any damage the fraudster caused. You can monitor your credit scores for free on Credit.com every month.

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This article originally appeared on Credit.com.

This article by Christine DiGangi was distributed by the Personal Finance Syndication Network.


Help! My Bank Reversed My Credit Card Dispute

Q: I recently moved, and the moving company lost or stole about $1,200 worth of my belongings. The movers were unresponsive, so I filed complaints with the BBB and Maryland Attorney General’s Office of Consumer Protection. Neither could resolve my complaint.

I disputed the $682 in moving charges with Chase, the credit card company I used to pay for the move. They issued a credit for the cost of the move and said it was “final.” I eventually settled with the moving company, accepting about $266 out of the $1,200.

I thought the $266 plus the credit card credit was fair.

Case closed, right? Not exactly.

Five months later, Chase reversed the credit and said the charges were valid. I was told I could appeal. I did. I received a response yesterday to my appeal letter, saying not only are the charges valid, but Chase had contacted the credit reporting bureaus about this.

Talk about adding insult to injury. How can they legally contact the credit bureaus about this when my bills are paid in full each month and I was just disputing a charge?

— Steven Schuster, Baltimore

A: Your moving company should have delivered your property to your new address. All of it. When it didn’t, it should have responded to your damage claim, or at the very least, worked with the BBB or the state attorney general to get this resolved.

Disputing the cost of your move in order to recover your damages is a little unorthodox. It assumes the value of your damaged goods is equal to the value of your missing items.

I might have taken the moving company to small claims court, instead. The state of Maryland caps small claims at $5,000 and you don’t need a lawyer to go to court. A credit card dispute, as I’ve often said, should be your last resort.

But what’s even more unorthodox about this case is that you eventually settled with the moving company. That settlement, it seems, gave the moving company the ammunition it needed to reopen your case and overturn the dispute that had already been decided in your favor.

You might have appealed this to someone higher up at Chase. They’re easy to contact by email. Addresses follow the convention firstname.middleinitial.lastname@chase.com. But after reviewing your paperwork, I concluded that would have been a long shot.

Instead, I decided to contact Chase on your behalf. To me, this looked like a series of misunderstandings — a chain of events that started when your moving company lost your property and then gave you the silent treatment. You deserve better.

Chase reversed its decision and issued a credit for $682. This time, for good.

This story is an Op/Ed contribution to Credit.com and does not necessarily represent the views of the company or its partners.

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Why the Lowest Mortgage Rate Can Turn Out to Be a Bad Bet

Is homeownership on the way out?

Sure seems that way, at least according to recent reports. A new Urban Institute study points to an increase in household formation among lower-earning minorities who may not have the means to afford much more than a monthly rent check. A survey by Wells Fargo last summer suggested that high debt levels are holding back millennials from becoming homeowners as well.

If true, this doesn’t bode well for residential real estate developers. It’s certainly not good news for existing homeowners with properties to sell, either. What’s more, a shrinking inventory of affordable rental units could drive up rents, and housing sales may also come under pressure as lenders tighten underwriting standards for fear that values may once again decline.

All this is happening despite government policies that are biased in favor of homeownership (consumer-friendly regulations and tax policies in particular). That and, until recently, an upward spiral in valuations have conditioned consumers to view ownership as an ideal worthy of great personal sacrifice.

Achieving that ideal, however, can also expose them to risks that may not be worth taking.

Consider as an example the adjustable-rate mortgage: A cut-rate loan product that’s touted by banks, mortgage brokers and real estate agents as a way for aspirant homeowners who are rolling the dice on higher future salaries and increasing home values to afford their dreams with the help of tantalizingly low monthly payments at the start of the loan.

The story behind the scenes, though, is a bit different.

The term adjustable is marketing-speak for “variable” or “floating,” in that the interest rate can move any which way. The rate is typically tied to LIBOR or a similar index, and resets at specified intervals — from monthly up to several years at a time — depending on the terms of the ARM. This can be beneficial for the borrower if the interest rates drop in the interim, resulting in a lower payment; or can have disastrous results if they increase to the point of unaffordability. So borrowers who require lower monthly payments early on to make their deals work must also accept longer-term uncertainty in exchange; risks that fixed-rate mortgage lenders had traditionally assumed.

Or had they?

There’s really no such thing as a fixed rate per se. Although the Federal Reserve’s policy actions influence the starting point for interest rates, inflationary expectations and other factors take over from there. So to lock in a particular rate at a particular time and for a particular term, a financial institution would need to find another entity (a so-called counterparty) that’s willing to gamble that rates will remain the same or decline during the same period, for which it would be paid a fee. The value of that fee plus, perhaps, a little more, is added to the borrower’s cost in the form of an interest rate markup.

Obviously, no such hedging is necessary for variable loans, which is a big reason why initial rates for ARMs are significantly lower than for fixed-rate mortgages. Issues for consumers, though, include the timing for the first interest-rate reset, the extent to which the base rate may ultimately increase and the effect all that may have on household budgeting.

Still, this product could make sense for homebuyers who expect to relocate before their mortgage reaches the point of that first adjustment. But that’s a crapshoot, particularly for those purchasers who haven’t much financial margin for error.

A more prudent approach would be to make purchase decisions on the basis of fixed-rate mortgage payments and to be disciplined about that: The numbers either work or the prospective buyer should consider a larger down payment, negotiate for a lower selling price or choose another – less expensive — property altogether.

One more thing. If we’ve learned anything from the recent crash, it’s that buying a house is not a guaranteed winning ticket to financial security. A better way to approach the purchase would be to hope that whatever appreciation in value occurs will at the very least offset the rate of inflation.

Anything more than that is a bonus and a good reason not to double down on price or monthly payment amount.

Remember: Budgets are zero-sum equations in that there are only so many dollars to go around. Housing costs, whether in the form of mortgage or rental payments, should not exceed 25% of pretax income. Otherwise, debtors may have no choice but to scale back in other areas to keep up with their financial commitments.

Living like that can get old really fast.

This story is an Op/Ed contribution to Credit.com and does not necessarily represent the views of the company or its affiliates.

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