Costly errors in credit reports
Minor mistakes on your credit report may look harmless, but they can have devastating financial consequences, said Jill Riepenhoff and Mike Wagner in the Columbus, Ohio, Dispatch. The paper’s yearlong investigation uncovered systemic flaws in the way the top three credit agencies handle errors. Inaccurate information—a transposed Social Security number, a misspelled name—can be enough to make a consumer responsible for the debts of a stranger, or to wreak havoc on a credit score. Yet consumer advocates estimate that up to 25 percent of credit reports contain a mistake, and they say the agencies are chronically slow in correcting them. The credit industry says the problem has been vastly overstated, but the fact is that federal law does not spell out how agencies should iron out errors. So “short of hiring a lawyer and filing a lawsuit, consumers are virtually powerless” if mistakes in their credit reports undermine their good names.
Raising a financial guru
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Teach your children money lessons at a young age, said Ron Lieber in The New York Times. That’s when several up-and-coming financial advisers say they learned valuable lessons about being mindful of money. Ramit Sethi, the 29-year-old author of I Will Teach You to Be Rich, says watching his father haggle for days over a car purchase, including over the floor mats, taught him the importance of bargaining. Adviser Brittney Castro, 28, remembers clipping coupons with her mother on Sunday mornings as a child. And Lauren Lyons Cole, 30, says she still has the notebook her father, a meticulous record keeper, pressed into her hand to track expenses the day she set off for college. It’s a habit she’s kept ever since.
A nest egg for health expenses
The amount you and your spouse will need to cover health costs in retirement is on the rise, said Mark Jewell in the Associated Press. A 65-year-old couple that qualifies for Medicare and retires this year needs an average of $240,000 for health expenses, a 4 percent increase over last year, according to a new estimate by Fidelity Investments. The estimate, which assumes a life expectancy of 82 for men and 85 for women, includes Medicare premiums, copayments and deductibles, and out-of-pocket prescription costs, but not costs for assisted-living arrangements or nursing homes. As long as health costs exceed income growth, these expenses will be a “growing burden for the country,” says Fidelity’s Sunit Patel.
