Consumer brief

WASHINGTON (8/23/07)--A federal law--the Family Educational Rights and Privacy Act (FERPA)--protects the privacy of your child's student education records. FERPA applies to schools that receive funds under an applicable program of the U.S. Department of Education. Parents' rights include the ability to inspect and review the student's records, to request that a school correct any records believed to be inaccurate or misleading, and to give written permission before information from the student's education record is released (there are exceptions). Schools may, however, disclose directory information--such as name, address, phone number, date and place of birth, honors and awards, and dates of attendance--without consent. If you don't want directory information disclosed, notify the school in writing. Schools must notify parents annually of their rights under FERPA. For more information, call 202-260-3887 (http://www.ed.gov) ...

courtesy of cuna.org

Turning 50 is turning point for preretirees

WASHINGTON (8/22/07)--Baby boomers, listen up: Your 50th birthday is not only a personal milestone, it's the perfect time to take stock of your finances for your countdown to retirement, regardless of whether it's five or 15 years away (Kiplinger's September).

What's so special about age 50? For starters, it's the age at which you can begin to make catch-up contributions to key accounts. This year, if you're 50 or older by the end of the year, you can contribute an extra $5,000--for a total of $20,500--to a 401(k) account, and you can contribute an additional $1,000--for a total of $5,000--to an individual retirement account, even if you contribute to your employer's plan.

If you're five to 10 years from retirement, it pays to diversify--perhaps with 50% to 85% invested in stocks, depending on your risk tolerance. However, run the numbers and determine how much money you'll need in retirement. Once you've accumulated enough principal to generate an adequate stream of income in retirement, reduce your risk and switch some of those investment dollars from stocks to bonds. By managing your risk in your later working years, you're in a better position to survive a market turndown or the kind of market volatility the economy has experienced recently.

Running the numbers, though, could reveal that you're going to fall short. In that case, put time on your side. Consider working a few more years and delay the day you start taking withdrawals. You're not alone—AARP estimates that more than three-fourths of boomers expect to work full-time or part-time during retirement. That trend may continue as more companies do away with traditional pension plans, says the Employee Benefit Research Institute (EBRI) (August). In addition, EBRI notes that many workers stay on the job to maintain affordable employment-based health insurance.

What else should you do as you approach your golden years?

• Think ahead. How do you want to spend your time, and how much will your dream cost? Don't assume you'll have the same expenses in retirement as you do now. They may be more; they may be less. It depends on your dream: your hobbies, your travel plans, where you wish to live, and whether you'll spend time with--or taking care of--grandchildren.
• Pay off debts. High-interest credit-card debt could take a big bite of your retirement savings at a time when you're supposed to be enjoying your new freedom.
• Cut housing costs. Will your mortgage be paid off? Do you plan to sell the house and downsize to something less expensive? Or are you considering a reverse mortgage to take advantage of the equity in your home?
• Attend a seminar. Retirement-transition seminars are making the rounds in corporate America, particularly as 401(k) plans supplant traditional pensions. Ask questions about the best withdrawal strategy to make your savings last as long as possible.
• Find an adviser. Even if you think you've got a handle on your retirement and investment strategy, seek advice from a reputable professional. Ask for referrals from family and friends.

Your student ID is more than just a library card

NEW YORK (8/21/07)--Whether you're an incoming freshman or a seasoned senior, all college students want to know how to get the most for their money. Follow these tips and your pocketbook will stay a little fatter (SmartMoney.com Aug. 13).

You're not only going to need a computer for checking your Facebook and MySpace pages, but it also will come in handy for writing those last-minute papers. So Google these three websites to get the best student discount.

• Apple Store for Education. Apple offers 5% to 10% off desktop and laptop computers, as well as software. This discount applies to iPods, too.
• Dell Higher Education. The discount depends on which type of system you purchase, but you can save 2% to 7% off your desktop and laptop computer. And if you've been known to spill things, you might want to buy the protection plan, which would save an additional 8% to 10%.
• HP Academic Purchase. You can save around 6% if you're a student when buying a computer, depending on the model. Also, save up to 50% on select printers and cameras if you shop here.

Make sure, too, to ask if your college offers student discounts on computer hardware and software.

Save money on transportation when Thanksgiving and winter break roll around. If you join the International Student Travel Confederation for $22.50 a year, you'll receive discounts for airlines, trains, buses and ferries. The best part: You can buy your ticket with little or no advance purchase restrictions, giving you some flexibility.

And finally, check out your campus student life and alumni affairs office for discounts at local restaurants and stores. For example, students at the University of Wisconsin-Madison can pick up a Bucky Book that contains hundreds of two-for-one savings and 50%-off purchases.

For more information, read "College Costs Update" in the Home & Family Finance Resource Center.

courtesy of cuna.org

To build or not to build? For some, the time is now

WASHINGTON (8/20/07)--The number of people building homes fell to its lowest level in more than a decade thanks to the worst housing slump since 1991 (USA Today Aug. 15)

Many would-be home buyers--or builders--have taken a wait-and-see attitude about their housing plans, mainly because of the subprime loan fiasco and high-building costs. Some builders are responding by discounting building costs and offering nonprice incentives as well (National Association of Home Builders Aug. 15).

Although the headlines might make it sound like the time couldn't be worse to build, for some individuals, the timing still may be perfect. Owning your own home offers many advantages such as tax benefits and the equity you'll build.

Here's what to consider:

• How much you can afford. One common guideline is that your mortgage payments--which include principal, interest, property taxes, and property insurance--should amount to no more than 33% of your monthly gross income (income before taxes, Social Security, and other deductions). Also, your total long-term debt (such as car payments, college loans and installment payments) should not exceed 38% of your gross income.
• Upfront costs. Buying or building a house means more than monthly payments. Upfront costs include your down payment and closing costs.
• Your budget. Remember, you don't want to put all your surplus into housing. You'll need savings for other big-ticket items such as college expenses, emergencies, and so on.
• Type of mortgage. Mortgages fall into two broad categories: fixed rate and adjustable rate. With a fixed-rate mortgage the interest remains the same throughout the length of your loan. An adjustable-rate mortgage (ARM) has an interest rate that varies over the term of the loan. With an ARM, the starting interest rate is lower than the going market rate, but can increase or decrease a certain amount at specific intervals such as once a year (or every six months, three years, or five years).

If you're thinking of building a house, talk to the people at your credit union. They can look at your financial situation and help determine what you can afford.

And, for more information, read "Construction and Bridge Loans Match Special Needs" in Home & Family Finance Resource Center.

courtesy of cuna.org

Consumer brief

MADISON, Wis. (8/16/07)--New passport rules have created a backlog of passport applications. When you finally receive yours, check it for accuracy. Elaine Grenzow, tour coordinator at Burkhalter Travel, Madison, Wis., says to immediately check the spelling of your name, your birth date, and whether the photo shown is actually yours. If you find an error, take it back to the post office or court house where you applied and ask to have it sent back to the U.S. Passport Office. You also can contact the Passport Office directly (http://travel.state.gov). If you're going to travel in the very near future, a local representative or state senator may be able to expedite your request (Burkhalter Travel Aug. 9) ...

courtesy of cuna.org