Tag Archives: militaryfamiliespersonalfinance

Unclaimed Assets: An Overlooked Source of Cash

By Barbara O’Neill, Ph.D., CFP®, Rutgers Cooperative Extension, oneill@aesop.rutgers.edu

Military families move around a lot and this can lead to instances of “missing money.” It is estimated that some $300 billion in personal financial assets are “missing” nationwide. This figure includes wages, insurance proceeds and dividends, bank accounts, stock and bond payments, utility company deposits, pension benefits, and tax refunds.

How does so much money get “lost” by so many people? There are a number of reasons:

  • People neglect to retrieve a utility security deposit after moving
  • Stock dividends or other payments are sent to the wrong address and never forwarded
  • People move or switch banks and fail to close out all their accounts
  • People change jobs and former employers don’t know where to send pension benefits or final wages
  • Clueless heirs are unaware that they are entitled to life insurance or cash left by a deceased relative
  • “Snowbirds” lose mail between their summer and winter homes

SaveThe good news is that, thanks to the Internet, it’s easier than ever to search for unclaimed property. The Web site, www.missingmoney.com, run by the National Association of Unclaimed Property Administrators, allows people to easily conduct a search. Another helpful resource is state unclaimed property agencies.

What do state governments have to do with unclaimed property? Plenty! By law, after a certain period of time (generally 3 to 10 years), unclaimed assets must be turned over to the state through a process called escheat. Hundreds of millions of dollars are escheated to states each year. Companies that don’t comply can be assessed fines. States keep this money until a rightful owner shows up to claim it.

It is advisable to conduct a search of every other state you (or a deceased relative) have lived in, as well as New York and Delaware, because that’s where a lot of financial institutions are incorporated. If you are due money, you’ll be sent an abandoned property claim form, which should be returned with proof of identity.

Another source of missing money is the Internal Revenue Service (IRS) at 800-829-1040. You can also check with the Pension Benefit Guaranty Corporation for missing pensions. The Pension Benefit Guaranty Corp. says it’s holding $265 million in unclaimed pensions and the average lost pension is worth about $1,100.

Will military families become wealthy from unclaimed property? Probably not. While there are some exceptionally large payments that occasionally make headlines, most claims are for less than $1,000. Nevertheless, a dollar is a dollar. Why not check to see if there’s hidden treasure with your name on it?

For further information about unclaimed assets, see http://www.missingmoney.com/ and http://www.kiplinger.com/article/retirement/T037-C000-S002-6-things-to-know-about-finding-unclaimed-assets.html.

Financial Planning at Divorce

 By Barbara O’Neill, Ph.D., CFP®, Rutgers Cooperative Extension, oneill@aesop.rutgers.edu

Military families often experience many stressful events (e.g., PCS moves and deployments). Another one is divorce. The period of time before and after a divorce is especially difficult because people are expected to make rational and far-reaching decisions at a time of emotional turmoil. This may also be their first experience with the court system and hiring an attorney. In addition, expenses often increase when a spouse moves out and sets up a separate household.

Below is some key information to share with military families to help them cope with the financial stresses of divorce:

  • Do not sign a property settlement agreement, or any divorce-related document, that you do not understand or you feel contains unfair terms. Consult your own attorney – not your spouse’s attorney – before signing anything
  • Estimate the dollar value of household property. Fair market value is the price at which a willing buyer will buy an item and a willing seller will sell it. Replacement value is the cost of replacing an item (e.g., refrigerator) at current prices. As spouses discuss how to divide property, the one who plans to keep property may think in terms of fair market value, while the other (who will be replacing property) may think in terms of replacement value.
  • Determine who will pay debts incurred during a marriage. List all debts including a home mortgage, car payments, and credit card accounts. Usually, one spouse or the other will assume an obligation and agree to “hold harmless” the other party. However, it is important to note that, if either party doesn’t pay a jointly held debt, creditors may collect from either spouse. Creditors are not bound by the terms of a divorce decree.
  • Plan for future retirement income. A divorced person is eligible for Social Security benefits based on former spouse’s earnings, even if the former spouse is not yet retired. In order to qualify for benefits, the marriage must have lasted at least ten years. For questions about division of military Retired Pay and the Survivor Benefit Plan (SBP), seek assistance from an attorney who is well versed in military divorce issues.
  • Know the tax consequences of divorce decisions. Marital status on December 31 determines tax-filing status for the year. Usually, the custodial parent claims a couple’s children as dependents. However, a custodial parent can waive the right to claim dependents as part of a divorce settlement, thus allowing the other parent to do so. A signed waiver statement (IRS Form #8332) from the custodial parent is required to be attached to the non-custodial parent’s tax return. Child support is neither deductible by the spouse who pays it nor included in the income of the recipient. Alimony, on the other hand, is taxable to the recipient and deductible as an adjustment to the payor’s gross income.
  • Recognize that 50/50 splits of assets are not necessarily equal. For example, if one spouse takes sole possession of the family home, he or she also shoulders the burden of future property taxes and repairs, as well as possible capital gains taxes. The other spouse, who receives the same dollar amount in cash, has an asset that will continue to grow. Clearly, this property distribution is not equal even though the dollar value is the same.
  • Encourage divorcing couples to consider hiring a professional mediator to resolve issues related to divorce. Mediators are trained not to “take sides” but, rather, to work out a settlement that is fair and equitable for both spouses. This includes both financial issues and other considerations such as child custody. Once these issues are resolved, each spouse’s attorney can assist with a final agreement. This is usually a far less expensive and time-consuming process than letting lawyers negotiate a settlement.

For further information about military family divorces, view the 2012 eXtension MFLNPF webinar, Financial Implications of Divorce. Additional information can be found here.

Predatory Lending Practices Webinar Coming Up

By Molly C. Herndon

July 15 is Military Consumer Protection Day and during the month of July a number of organizations are hosting events geared towards providing Military families with resources to prevent consumer fraud.

In this vein, the MiPayday Loans Neon Sign image by Jasonlitary Families Learning Network’s Personal Finance team will present a webinar on Predatory Lending Practices on Tuesday, July 28 at 11 a.m. ET. Speakers Dr. Barbara O’Neill and Marcus Beauregard will present a 90 minute webinar that will focus on the practices and schemes associated with predatory lending, as well as tips for educators and practitioners to share with clients to help them avoid becoming victims of these practices.

Of particular importance, this webinar will focus on the Regulation (32 CFR Part 232), which implements the Military Lending Act (MLA), which has been going through a significant revision so that the limitations in the MLA are effectively applied to credit available to Service members and their families.

We are excited for the expertise co-speaker, Marcus Beauregard will bring to this presentation.  Mr. Beauregard, Colonel, USAF (Retired) is the Chief of the DoD-State Liaison Office (DSLO) within the Office of the Deputy Assistant Secretary of Defense for Military Community and Family Policy.  Together with a Senior Liaison and 8 Regional Liaisons, he works with state governments on a slate of key issues important to Service members and their families.  Additionally, he is one of two individuals responsible for the Military Lending Act and updating the DoD regulation required to implement the law.  He spent 27  years in the U.S. Air Force, having assignments as a SquadronCommander, the Director of Financial Management for Air Force Services and the Director of Morale, Welfare and Recreation (MWR) Policy in the Office of the Secretary of Defense. He retired in July 2003 and continued to work as a contract employee from August 2003 to April 2010, at which time he became a civil service employee.  Mr. Beauregard developed the Financial Readiness Campaign in 2003, while on active duty as the Director of MWR Policy.  Following his retirement, he continued to work on financial readiness for DoD and helped establish the DSLO. In 2006, he was given the responsibility to oversee the implementation of the Military Lending Act.

Dr. O’Neill will present the first hour of this webinar, which will focus on the definition of predatory lending and characteristics of predatory loans, as well as descriptions of several common types of high-cost loans including payday, car title, and pawn shop loans and other forms of subprime lending. Mr. Beauregard will tackle the impact of predatory loans on military families and regulations in place to protect against fraud during the final 30 minutes of the webinar.
So, save the date of Tuesday, July 28 at 11 a.m. ET to join this exciting webinar. More information and details on how to join are available here. 

VLE #MFLNchat recap

The Personal Finance Virtual Learning Event, held June 2-4, featured daily Twitter chats focused on the topics discussed in that day’s webinar. The webinar speakers were on hand to answer questions and to dig deeper in to the topics discussed in the 90-minute sessions. Here, you can view all the tweets shared during these daily chats, including great discussion on promoting positive financial behavior change and resources to share and use with clients.

Twitter Chats: A Professional Development Tool

 

By Barbara O’Neill, Ph.D., CFP®

Rutgers Cooperative Extension

In early June, as part of the 3-Day Virtual Learning Event (VLE), the Military Families Learning Network (MFLN) held a series of three Twitter chats using the hash tag #MFLNchat. The eXtension VLE Learn page with archived webinars is  located here. The purpose of the Twitter chats was to extend conversations in the “chat” section of the webinars about encouraging positive financial behaviors through motivation, coaching, and counseling. A Storify summary of the three Twitter chats can be found here. Storify is a free online application that allows people to create “stories” from the text, links, and photos found within in tweets and Facebook and Google+ messages.

Prior to the three Twitter chats, a “Lite” Twitter Cohort was held to introduce chat participants to the basics of using Twitter. Each day for two weeks, cohort 36 cohort participants received e-mailed messages about using Twitter. Materials for the cohort are available here. Participants used the hashtag #twittercohort to hold asynchronous conversations with one another.

Twitter chats, on the other hand, involve synchronous conversations. As the number of Twitter users has grown since its inception in 2006, so has the use of Twitter for financial education. An increasingly outreach method is Twitter chats, which use the hashtag (#) symbol to hold a “conversation” through an organized stream of tweets from people interested in the same topic (e.g., credit).

The formatting convention used to organize Twitter chat threads is Q1 for Question 1 and A1 for participant responses to that question, with 8 to 10 different questions per one-hour chat. All users have do is log in to a Twitter application such as http://www.tchat.io/ or http://twubs.com/ at a designated time and time zone, type in the hashtag for the chat, and start responding to and/or asking questions to engage with others.

The MFLN plans future professional development Twitter chats and encourages Personal Financial Management Program (PFMP) staff to participate. Feel free to “lurk” for a while, if you’d like, and then jump in. Another good idea is to observe, and then participate in, these regular personal finance Twitter chats: #creditchat (Experian, 3 p.m. ET on Wednesdays), #wbchat (WiseBread, 3 p.m. ET on Thursdays), #cashchat (@MsMadamMoney, 12 noon ET on Fridays), and #mcchat (Money Crashers, 4 p.m. ET on Fridays).

Below are some screen shots that further explain how to navigate a Twitter chat:
  1. Go to as http://www.tchat.io/
  2. In the top, right corner click on “Sign In”
  3. If you are already logged into your Twitter account, this box will prompt you to “Authorize TweetChat…to use your account”. You then click on “Authorize App”

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  1. If not it will ask you to log into your Twitter account. Log in with your Twitter handle and password.

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  1. Then, in the top left hand corner, type in the hashtag you are following and then press, “Go”

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For Example:
  • Experian Tweetchat’s hashtag is “#CreditChat”
  • Wisebread Tweetchat’s hashtag is “#WBchat”
  1. You will then be taken to a stream of Tweets, only with the hashtag you typed in during the last step.

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  1. You can then Tweet or Retweet whatever you wish, and the http://www.tchat.io/ application will add the hashtag on for you so that you too can join the conversation!

Pic5

 

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Use these icons when you are tweeting:

 RespondThis allows you to Tweet at, or respond to, someone directly.

RetweetThis allows you to ReTweet someone else’s tweet; i.e., send it to your Twitter followers.

FavoriteThis allows you to Favorite someone’s Tweet; i.e., indicate that you like what they have shared.

Happy tweeting! I hope to see you on a personal finance Twitter chat soon.

Financial Coaching – A Step by Step Guide

By Molly C. Herndon

Jerry Buchko will present the final webinar in the 3-day Virtual Learning Event tomorrow at 11 a.m. ET. This 90-minute webinar will focus on the tools and approaches used in financial coaching.

By Mr. Nixter
By Mr. Nixter

This webinar will look at the historical emergence of coaching and consider the place that financial coaching has in the emerging contemporary framework for understanding financial well-being and the development of financial capacity. The distinctions between financial coaching, counseling, and education will be explored. We will then examine the primary role and tasks of the coach and explore the common core elements that underlie various coaching approaches. Finally, we will examine common core coaching techniques, as well as explore how some of these can be usefully incorporated into financial counseling and financial education efforts.

The webinar will be followed by an hour-long Twitter chat. Join us as we discuss the questions outlined here on Twitter at 1 p.m. ET using #MFLNchat. Mr. Buchko will join the chat to address participant’s questions and to delve deeper in to the topic of financial coaching.

Jerry Buchko,  MA, AFC®, is a Counselor, Coach, & Tutor of Personal Finance who is pursuing a private practice serving clients using video conferencing and other online collaboration spaces. Prior to entering private practice, he worked for almost 14 years in the employee assistance field, providing financial counseling to clients from a diverse range of life circumstances and experiences, including military Service Members and their families. Jerry has a B.A. in psychology, an M.A. in counseling psychology, and is an Accredited Financial Counselor (AFC®). He is an active member within the eXtension Military Families Learning Network (MFLN) and Network Literacy Community of Practice. Jerry currently serves as a member of the Board of Directors for the Association for Financial Counseling and Planning Education (AFCPE), and also currently serves as a Practitioner Consultant with the MFLN Personal Finance team.

View the slides and associated resources, as well as connect to the webinar at this link: https://learn.extension.org/events/2012 Thursday, June 4 at 11 a.m. ET. We look forward to seeing you online!

Target Date Fund Basics for Financial Counselors

By Barbara O’Neill, Ph.D., CFP®

The May 26  2015 MFLN Personal Finance webinar is about target date funds (TDFs), including the L fund investment option available in the Thrift Savings Plan (TSP) for federal government employees and service members. Also known as lifecycle funds (that’s what the “L” stands for), target date funds are “all in one” portfolios that typically include three types of investment categories known as asset classes: stocks, bonds, and cash equivalents (e.g., money market funds). Their asset allocation weightings (e.g., 50% stock, 30% bonds, 20% cash) automatically adjust and become more conservative (i.e., lower stock percentage) over time.

By viZZZual.com
By viZZZual.com

Target date funds typically have a date in their name such as the “2050 fund” and investors chose a fund with a date that is close to their expected year of retirement. Dates are spaced out at 5- or 10-year intervals (e.g., 2030, 2035, etc.). Most TDFs are “funds of funds” with underlying funds from the same fund family. Examples include Fidelity Freedom Funds, Vanguard Target Retirement Funds, and T.Rowe Price Retirement Funds.

TDFs were created in 1994 and have gained popularity in the last decade as a qualified default investment alternative (QDIA) for tax-deferred retirement savings plans such as 401(k)s and, starting in October 2015, TSP accounts for new federal employees. Some employees who are enrolled in employer investment plans fail to provide instructions for investing their deposits. In these cases, employers invest their plan contributions in the default investment. Investors also like TDF’s “low maintenance” style for savings outside of workplace plans.

Below are key facts about target date (lifecycle) funds that investors and those who counsel them need to know:

  • TDFs generally only make sense if they include the bulk of someone’s retirement savings. Otherwise, their asset allocation is altered by “outside” investments, which contradicts the whole premise of using them.
  • A defining characteristic of TDFs is their glide path, which determines the asset allocation mix over time. Pictured as a descending staircase, the glide path indicates how the stock percentage decreases over time.
  • Glide paths are a critical factor in TDF performance and investment companies use several types of glide path methods. Glide paths are used in both TDFs and age-adjusted portfolios in 529 college savings plans.
  • “To” glide path TDFs assume that retirement age is the target date and, at that point, the portfolio’s stock % weighting and investment mix remains static. “Through” glide path TDFs continue to decrease the stock percentage for a designated number of years after the target date before leveling off.
  • The “landing point” is the point in the glide path where a TDF reaches its lowest stock % allocation. Not surprisingly, TDFs with different glide paths and landing points have very different risk profiles.
  • TDFs are not without controversy. Performance issues during the financial crisis brought to light the fact that many TDFs were not as conservatively positioned as their names implied. This led to new disclosure rules by the Securities and Exchange Commission in 2010, including better disclosure of TDF glide paths.

To this webinar on May 26  at 11 a.m. ET or to view the recording,visit https://learn.extension.org/events/2030.

This post was published on the Military Families Learning Network blog on May 12, 2015.

Twitter Cohort Lite

By Molly C. Herndon , Social Media Specialist

The Personal Finance and Network Literacy teams will again be joining forces to create a learning opportunity for folks interested in Twitter. The 2-week event will begin May 18.

This year’s event will focus on asynchronous activities that participants can complete at their own pace. The event’s guides have assembled resources and homework for participants that will teach new skills and broaden existing networks. Watch videos and view last year’s syllabus here.

The Twitter Cohort Lite promises to be an easy way to get your feet wet and start tweeting with a supportive and encouraging network of professionals. By participating in this year’s event, you will:

  • Twitter-CohortBuild your Twitter personal learning network centered around your interests.
  • Engage in conversations with a Twitter community that starts with your fellow cohort members and reaches across the world.
  • Start online relationships that will last into the future.
  • Begin to see how Twitter can be used for teaching, learning, and connecting.

So if the Twitterverse seems intimidating or if you’re just learning to enhance your own personal learning network, register today for this immersive learning opportunity.

This post was published on the Military Families Learning Network blog on May 5, 2015.

Entrepreneurship Essentials for Service Members and Military Spouses

By Barbara O’Neill, Ph.D., CFP®

The April 2015 MFLN Personal Finance webinar was about entrepreneurship. Like many American workers, service members and their spouses are becoming entrepreneurs (a.k.a., independent contractors or freelancers) because they want to or have to. The U.S. is increasingly becoming a “freelance nation” as employers address their labor force needs by hiring people on contracts to avoid layoff hassles, payroll taxes, and fringe benefits.

By Stephen Depolo
By Stephen Depolo

Independent contractors work project-to-project and are hired to get a job done without regard for the means by which the result is accomplished. They use their own equipment and set their own work schedule, even if it is 3 am in their pajamas! It is estimated that 4 of 10 U.S. workers will be freelancers by 2020.

Becoming a successful entrepreneur requires certain personal qualities such as a strong work ethic, creativity, good people skills, a broad skill set, and comfort taking risks. It also requires different financial planning strategies compared to employees who earn a salary. Below are ten tips for aspiring entrepreneurs:

  • You are able to deduct self-employment expenses, such as equipment, materials, and travel, directly against business income on the Schedule C tax form. Be sure to keep good records, such as a travel log for mileage.
  • You must pay both the employee and “employer” portions of FICA tax for Social Security and Medicare totaling 15.3% of net earnings from self-employment.
  • You can’t use a budget that assumes a regular income when you’re an independent contractor. Instead, estimate baseline expenses and set aside money from peak earning months for times with lower income.
  • You should build a substantial emergency fund (many experts recommend 6 to 12 months of household expenses) to tide yourself over in between freelance work projects.
  • You must make quarterly estimated taxes to the IRS by April 15, June 15, September 15, and January 15 of the following year. Set aside at least 30% of self-employment income “off the top” for taxes.
  • You, like most Americans, must purchase health insurance. Sources include a government-facilitated Marketplace, a private policy, group insurance through a trade group, and a spouse’s employer plan.
  • You can save for retirement using a simplified employee pension (SEP), the easiest savings plan for entrepreneurs. Contribute up to 20% of net self-employment income by April 15 of the following year.
  • You can also fund a Roth and/or traditional individual retirement account (IRA) for retirement savings up to the larger of $5,500 ($6,500 if age 50 and over by year-end) or 100% of net earnings from self-employment.
  • You have many resources to assist you including professional advisors (lawyer, CPA, etc.), Small Business Development Centers, SCORE, and web sites sba.gov and http://www.extension.org/entrepreneurship
  • You should begin any entrepreneurial activity with a business plan that includes your objectives, product or service niche, marketing plan, pricing methodology, financial projections, and business title and structure.

To watch a recording of this webinar, visit learn.extension.org/events/2018

This post was published on the Military Families Learning Network blog on April 28, 2015.

2015 Personal Finance Virtual Learning Event

Molly C. Herndon

The image 14296 counseling & psychology by Texas A&M University Marking Communications Photography for this webinar is licensed Creative Commons CC BY 2.0.
By Texas A&M University Marking Communications Photography

Join us a 3-day learning event June 2-4 that will focus influencing positive change in clients. The 2015 Personal Finance Virtual Learning Event is an online learning opportunity to connect with colleagues, broaden your professional network, learn from experts in the field, and earn free CEUs!

On Tuesday, June 2 at 11 a.m. ET Dr. Barbara O’Neill will present Motivating Clients to Develop Positive Financial Behaviors. This webinar will describe ways to prompt positive behavior change in others. It will begin with a discussion of three leading behavior change theories and the concepts of locus of control and time preference. It will then discuss 20 specific financial behavior change strategies, relevant concepts from the field of behavioral finance, and implications for financial practitioners.

On Wednesday, June 3 at 11 a.m. ET, Dr. Mary Bell Carlson will present Financial Therapy Insights for Financial Counseling and Education. This session will explain what financial therapy is and how it differs from financial counseling, coaching, and planning. You will learn some of the specific techniques and models used in financial therapy and even some tips on how to incorporate some of these techniques into your sessions to help facilitate the opportunity for lasting financial behavior change with your clients.PF VLE 1 PAGER 2015

On Thursday, June 4 at 11 a.m. ET, Jerry Buchko will present Step by Step Financial Coaching Techniques. This webinar will deliver step-by-step techniques financial educators can employ to influence positive behavior change in their clients.

Each 90-minute webinar will be followed by a 1-hour Twitter chat. Engage, ask questions and post comments by using #MFLNchat.

Each webinar is approved for 1.5 CEUs for AFC-credentialed participants through AFCPE and 1.5 general CEUs for CPFC-credentialed participants through FinCert. Learn more about our CEU process here.

More details on this 3-day event are available here. We hope to see you online June 2-4!

This post was published on the Military Families Learning Network blog on April 21, 2015.