August 18, 2018

Your Money Adviser: What You Need to Know About Safe Deposit Boxes

Storing emergency cash in a safe deposit box is also unwise, advisers say. Unlike money in a deposit account, cash in a safe deposit box isn’t insured by the F.D.I.C., and it may be vulnerable to theft. Earlier this year, the Federal Reserve Board took punitive action against a former bank employee who stole $30,000 in cash from a customer’s safe deposit box.

Banks aren’t immune to risks from natural disasters. So it’s best to seal documents or other items that may be damaged by flood in plastic bags or containers to help protect them from water damage, Mr. McGuinn said.

Paula Pierce, a lawyer in Austin, Tex., urged consumers to carefully read the contract for their safe deposit box, which outlines what happens if, for instance, you lose your keys. The American Bankers Association said banks don’t keep copies of your key, so if you lose yours, the lock must be replaced. Often, Ms. Pierce said, “there’s a hefty charge for getting the box rekeyed,” so keep them in a safe place.

Also, be sure to keep current on rental fees, Ms. Pierce said. Details vary by state, she said, but generally, after a period of notice, the bank may be allowed to sell the contents of the box to pay delinquent fees. Any excess money is turned over to the state as unclaimed property.

David J. O’Brien, a fee-only financial planner in Midlothian, Va., said he encouraged clients to take an inventory and to visit the box periodically to verify its contents. He said a relative’s safe deposit box was mistakenly drilled open and emptied by her bank, which had confused it with another box with a similar number whose owner had fallen delinquent on rental fees. The box’s contents — including a watch with sentimental value — were eventually recovered, he said. But the incident suggests that letting items languish indefinitely is a mistake. “You need to catalog what’s in it,” he said, “and then check on it.”

Here are some questions and answers about safe deposit boxes:

How much does a safe deposit box typically cost?

Fees vary depending by location and the size of the box, and may range from $20 to about $200 a year. Customers with certain accounts may get a discount.

Are valuable items in my safe deposit box covered by insurance?

Not usually. The bank generally doesn’t insure the contents of the box. So if you are storing jewelry or other valuables you should buy insurance separately, said Lynne McChristian, a spokeswoman for the Insurance Information Institute. Typically, you would have the item appraised, then “schedule” coverage for its replacement value on your homeowner’s policy. Insurers often charge less to insure an item, she said, if it is kept in a safe deposit box.

Is the fee for my safe deposit box tax deductible?

Not any more, said Lewis Altfest, chief executive of Altfest Personal Wealth Management in New York. Such fees previously could be taken as a miscellaneous deduction, in some cases, on your federal tax return, but the deduction was suspended as part of last year’s tax overhaul.

Article source: https://www.nytimes.com/2018/08/17/your-money/banking-safe-deposit-boxes.html?partner=rss&emc=rss

Your Money Adviser: Sales Tax Holidays for School Supplies May Deliver Less Than Promised

Octavio Blanco, a money writer with Consumer Reports, suggested that shoppers may want to buy some back-to-school items to take advantage of tax holidays, then wait to buy the rest in September, after school is in session for a while, when stores may cut prices to move inventory.

Also, Mr. Blanco said, promotion of the tax-free events may give the impression that all merchandise is included. But the details often reveal that many items are excluded or that the dollar amount of items eligible for tax-free status is limited.

In Connecticut, for instance, most individual items priced under $100 are exempt from sales tax during its tax-free week. The full sales tax is charged on items priced at $100 or more.

“Know the parameters,” Mr. Blanco said.

Here are some questions and answers about back-to-school savings:

What states have sales tax holidays?

States with back-to-school tax holidays in 2018 are Alabama, Arkansas, Connecticut, Florida, Iowa, Massachusetts, Maryland, Mississippi, Missouri, New Mexico, Ohio, Oklahoma, South Carolina, Tennessee, Texas, Virginia and Wisconsin. Most were scheduled for late July or the first week of August.

Massachusetts didn’t hold a tax holiday the past two years but is scheduled to hold one Aug. 11-12, pending the governor’s expected approval.

Other states with upcoming holidays include Connecticut (Aug. 19-25), Maryland (Aug. 12-18) and Texas (Aug. 10-12).

Are purchases of laptops and computers included in sales tax holidays?

Rules for computers and electronics vary by state. Some states waive taxes on them, but typically cap the total price eligible for the savings.

Article source: https://www.nytimes.com/2018/08/10/your-money/sales-tax-holidays-school-supplies.html?partner=rss&emc=rss

Wealth Matters: Buoyant Economy or a Blip? Four Tips for Investing Before the Party Ends

Yet investors need to pay attention. “The alarm is when the yield curve inverts,” he said. “It’s a predictor of both recessions and returns in the market.”

Actively monitoring economic data and what it presages is a smart strategy.

Pick Recession-Resistant Stocks

Most analysts believe that Mr. Trump is bluffing on tariffs and that they are being used as a negotiating tool. This comes from the school of thought that favors what the president does over what he says.

For instance, after saying so many harsh things about European trading partners, Mr. Trump embraced Jean-Claude Juncker, president of the European Commission, just last week.

“The worst case is, Trump just gets in a fight with China, Europe and everyone else and we see an escalation of tariffs that slows world trade and has a significant impact on the U.S. economic cycle, increases inflationary pressures and ultimately reduces output,” said John S. Osterweis, chairman and chief investment officer of Osterweis Capital Management, which manages about $7 billion.

That would be crushing, but it is not the only possible outcome.

“The flip side is, Trump really is a master negotiator and what he’s doing is trying to move away from multilateral trade agreements to bilateral agreements,” Mr. Osterweis said. That may produce better trade deals, he said.

Lacking any idea as to which outcome to expect, Mr. Osterweis has been encouraging clients to invest in companies whose outlooks are less dependent on the economy or a particular industry, he said.

“You could think of a Google, where people’s search habits aren’t going to change dramatically if there’s a recession and there’s already an inexorable migration of ad dollars to that company,” he said. “You could look at a drug company with a blockbuster drug coming through the pipeline or a Disney, where they have the next unbelievably popular movie coming out.”

Article source: https://www.nytimes.com/2018/08/03/your-money/economy-stock-market-investing.html?partner=rss&emc=rss

Wealth Matters: Buoyant Economy or a Blip? 4 Tips for Investing Before the Party Ends

Yet investors need to pay attention. “The alarm is when the yield curve inverts,” he said. “It’s a predictor of both recessions and returns in the market.”

Actively monitoring economic data and what it presages is a smart strategy.

Pick Recession-Resistant Stocks

Most analysts believe that Mr. Trump is bluffing on tariffs and that they are being used as a negotiating tool. This comes from the school of thought that favors what the president does over what he says.

For instance, after saying so many harsh things about European trading partners, Mr. Trump embraced Jean-Claude Juncker, president of the European Commission, just last week.

“The worst case is, Trump just gets in a fight with China, Europe and everyone else and we see an escalation of tariffs that slows world trade and has a significant impact on the U.S. economic cycle, increases inflationary pressures and ultimately reduces output,” said John S. Osterweis, chairman and chief investment officer of Osterweis Capital Management, which manages about $7 billion.

That would be crushing, but it is not the only possible outcome.

“The flip side is, Trump really is a master negotiator and what he’s doing is trying to move away from multilateral trade agreements to bilateral agreements,” Mr. Osterweis said. That may produce better trade deals, he said.

Lacking any idea as to which outcome to expect, Mr. Osterweis has been encouraging clients to invest in companies whose outlooks are less dependent on the economy or a particular industry, he said.

“You could think of a Google, where people’s search habits aren’t going to change dramatically if there’s a recession and there’s already an inexorable migration of ad dollars to that company,” he said. “You could look at a drug company with a blockbuster drug coming through the pipeline or a Disney, where they have the next unbelievably popular movie coming out.”

Article source: https://www.nytimes.com/2018/08/03/your-money/economy-stock-market-investing.html?partner=rss&emc=rss

Corner Office: Dan Schulman of PayPal on Guns, Cash and Getting Punched

Companies, and by extension their management teams and their C.E.O.s, have a moral obligation to try to be a force for good. I don’t think there’s any way that we can shirk that responsibility, and I don’t think there’s any way to fully stand away from the culture wars around us. You have to take a stand. That stand shouldn’t be a political one. But it should be one that is based on your values and your mission.


— Dan Schulman


You practice martial arts, right?

I practice Krav Maga. I spent some time in Israel when I was young, and they have what’s called Youth Military Training there, so I started then. That was when I was in my teens, and I’ve been doing Krav since then.

Have you ever gotten hurt?

Oh my gosh. I mean, look at my knuckles. These are all from punches. I’m always black or blue or I have some scar on my face. I’ve dislocated my shoulder. I’ve had stitches. If you look carefully on my face, stitches here, stitches here. Smacked into a mat here, here. That’s how you learn how to be cool, calm and collected in very stressful situations.

But the overrunning philosophy of Krav is that the best way to win a fight is to not get into a fight. It’s very Zen in that way. How do you de-escalate situations? We spend a lot of time thinking about that. It’s translated into the way that I think about business as well.

When we started partnering with Visa and Mastercard and JPMorgan Chase and Citi, nobody ever thought that PayPal would be allies with those companies. That would always be an uneasy friend relationship. But my view is, “How do you give customers the choice they want, and how do you avoid fights that you don’t necessarily need to be in?” And it was maybe one of the key things that catapulted PayPal’s success in recent years.

Article source: https://www.nytimes.com/2018/07/27/business/dan-schulman-paypal-corner-office.html?partner=rss&emc=rss

The Sweet Spot: I’m Drowning in $100,000 of Debt. But Someone Wants to Help.

CS: You’re wise to consider what impact this offer might have on your father and his relationship with his girlfriend, but I don’t see any red flags. If your father felt uncomfortable with the idea, or if you thought his girlfriend might harbor an ulterior motive, I’d have entirely different advice for you. But this doesn’t appear to be the case. It seems your father’s girlfriend wants to pay off your debt for her stated reasons: because she has the ability to, because she wants to, and most importantly, because she’s impressed with you and your brother — the adult children of the man she loves. Still, I encourage you to have a candid discussion with your father and his girlfriend to clarify the terms of her offer. Is it truly a no-strings gift, or one she might later regret? It’s a tough question to ask, but one worth knowing the answer to. As for your mother, I hope you’ll help her see that guilt is the last thing she should feel. The years of love, support and financial assistance she’s given you and your brother aren’t obliterated by your father’s girlfriend’s generosity. If anything, your mom made it more likely you and your brother would be offered such a gift. She raised two people who became “outstanding citizens,” after all.

SA: As you mull all this, it might help to step back and recognize how skewed the distribution of wealth is, especially in America. The very fact that you want to work in social services means, perversely, that you’re likely to earn a lot less money than someone who wants to market pesticides. This is why schoolteachers across this country are having to strike for a livable wage while those born into wealth watch their portfolios bulge. The very notion that the rich are virtuous and the poor are morally defective is one of our most absurd and damaging cultural myths. And it probably contributes to the stress you feel about your debt, Underwater. Your father’s girlfriend certainly deserves your gratitude as an ally, especially if her motives reflect respect for you, and an interest in economic justice. She’s right that both you and your brother deserve the opportunity to educate yourselves without going into debt. All Americans deserve that, frankly. One final suggestion: If you’re looking for novels that might help you navigate your complex feelings about debt, look to the work of Charles Dickens. His books return, again and again, to that theme. And take heart in the lesson his books affirm: What matters most of all isn’t what you’re given, but what you do with it.

Article source: https://www.nytimes.com/2018/07/24/style/student-debt-pay-off.html?partner=rss&emc=rss

Your Money Adviser: At Least Online, Interest Rates on Savings Finally Move Up

While setting up a new account may seem like a hassle, money sitting in a savings account earning 0.01 percent, which is still the rate at some large banks, is losing purchasing power, Mr. McBride said.

“It’s the first time in a decade” that savers are in a position to earn a yield on their savings that is comparable with inflation, he said. (Inflation was around 2 percent in 2016 and 2017, but has been ticking up this year.

Here are some questions and answers about savings account rates:

If I move money into an online savings account with a higher rate, will I earn the same interest rate indefinitely?

No. Some banks may offer a higher rate temporarily to lure customers and raise cash. But once the institutions meet their goal, they may lower the rate. In some cases, banks pledge to keep the rate for a certain period.

How many times a month can I withdraw money from a savings account?

Federal rules, specifically Regulation D, limit consumers to six withdrawals a month, including transfers to other accounts, from savings accounts. (There are some exceptions, like withdrawals made in person or at an A.T.M.) Some banks may charge fees for excessive withdrawals or limit the size of individual withdrawals.

What about rates on certificates of deposit?

Rates on 12-month C.D.s at many online banks are also competitive right now, often above 2 percent, Mr. Clements said. If you have cash you know you probably won’t need in the coming year — say, you are saving for a down payment or a new car — C.D.s are worth a look. You’ll pay a penalty for withdrawing the money early, but you’ll usually forfeit a few months of interest rather than principal. This week, Capital One, a mostly online bank that has some branches, was offering a one-year C.D. with no minimum deposit at a rate of 2.3 percent. Have a longer horizon? Sallie Mae Bank offers 2.8 percent on a two-year C.D., with a $2,500 minimum deposit.

Article source: https://www.nytimes.com/2018/07/20/your-money/online-interest-rates-savings.html?partner=rss&emc=rss

Retiring: In a Tight Labor Market, Retirees Fill Gaps Their Previous Employers Can’t

At some organizations, it is high-level executives who have come out of retirement.

Thomas Murphy, a construction engineer in Atlanta, had helped the United Parcel Service erect some 70 buildings throughout the United States during his career at the company. In 2007, after he had risen to the post of coordinator of compliance and ethics for the company, he accepted an early retirement package.

“I was only 50,” he said, “but the package was generous. My health insurance would be paid until Medicare kicked in. I thought it was time to start something new.”

At first, Mr. Murphy, now 62, and his wife, Nancy, traveled. Then they started a small construction firm that had, as part of its mission, the training of disadvantaged youths in the building trades. But after a few years, the demands overwhelmed them. “Our retirement was exhausting us,” he said.

After shutting the business down, Mr. Murphy thought that regular full-time employment might be the best way to spend his senior years. But by then he was in his late 50s, and the difficulties he had finding employment frustrated him.

Eventually, through friends, Mr. Murphy heard about a program that U.P.S. had organized to recruit retirees.

The internet shopping boom had driven huge growth for the delivery service. Management was seeking to bring back former workers, who, according to Malcolm Berkley, a vice president at U.P.S., “wouldn’t need much training because they’d done the job for 30 years.”

The day after Mr. Murphy applied, he was offered a position mentoring new construction engineers.

Today, he is the East region project engineering manager for the company, and is comanaging the construction of what will be a large automated distribution center on the west side of Atlanta. But this time, Mr. Murphy is not on the U.P.S. payroll. He works for a staffing company, Cortech.

Article source: https://www.nytimes.com/2018/07/13/business/in-a-tight-labor-market-retirees-fill-gaps-their-previous-employers-cant.html?partner=rss&emc=rss

Your Money Adviser: The Virtues of a Summer Job

In parts of the country where students will return to school in mid-August, much of the summer is already gone and employers may not be as eager to hire as they were in the spring. But often, entry-level jobs suitable for teenagers have high turnover, so it’s worth checking again, even if you didn’t find a job earlier in the summer, Mr. Challenger said.

Here are some questions and answers about summer jobs:

Why did my summer employer give me a tax form?

When you’re hired, your employer gives you a Form W-4, also known as a withholding allowance certificate, which tells the employer how much tax to deduct from your paycheck. The amount withheld is based on the number of so-called allowances you claim; the more allowances claimed, the less money withheld for taxes and the more cash you’ll see in your paycheck, said April Walker, lead manager for tax practice and ethics at the American Institute of CPAs. (The form is being revised because of last year’s tax bill, but the new version isn’t yet ready for official use.)

The W-4 form has a work sheet to help you decide how many allowances to claim, but it can get complicated. So even if you expect to earn relatively little income, you should consider claiming one allowance, or even zero allowances, to help cover any tax bill, tax experts say.

If you end up having too much withheld, you can get a refund by filing a tax return next year.

The Internal Revenue Service offers more tips for students with summer jobs.

Can I put money earned from a summer job into a Roth I.R.A.?

Yes. If you have earned income, you can open a Roth I.R.A., a retirement savings account, and begin saving and investing the money, said Mark Luscombe, principal federal tax analyst at Wolters Kluwer Tax Accounting. Saving early, even if it’s just a small amount, means your investment will have a long time to grow. Your parents or another relative can even add money to the Roth for you, up to the maximum amount — $5,500 for 2018.

Why not just take the summer off and work during the school year?

Having a job during the school year can be fine, as long as you don’t overdo it. There’s a link between intense school-year employment — 20 or more hours a week — and the risk of dropping out, said Jeremy Staff, a professor of sociology and criminology at Penn State University. So it’s wise to limit your hours, if you can afford to.

Article source: https://www.nytimes.com/2018/07/13/your-money/summer-job-students.html?partner=rss&emc=rss

When She Earns More: As Roles Shift, Old Ideas on Who Pays the Bills Persist

Set, and adjust, expectations. Derek Tharp, who runs a financial planning firm in Cedar Rapids, Iowa, said he believed the assumptions that each partner brought to a relationship were the biggest potential sources of conflict.

“If they are open-minded and adjust their roles accordingly — e.g., he may pick up more household labor as her responsibilities in the labor market become more demanding — then things generally work out just fine,” Mr. Tharp said. “But if either spouse is uncomfortable with the outcome — he may feel that he’s failing as a husband or she may feel that he’s not carrying his own weight — then the risk for conflict may be high.”

Lazetta Rainey Braxton, chief executive of the financial planning firm Financial Fountains, said she had seen earning-related stress arise later, when a woman wanted to relinquish her breadwinning role, often to spend time with children or change to a more flexible, and possibly less lucrative, career.

“It can put a great deal of pressure on men to step up and figure out the income differential,” she said. When such situations arise, she helps couples figure out how much flexibility they have to make adjustments — stretching out student loan payments, for example — that affect their current situation and long-term goals.

Divide and conquer. Research shows that men are handling more household responsibilities, but they still aren’t doing as much as their wives. When women feel they are doing more than their fair share, their relationships have been found to suffer.

It’s amazing what a little more help around the house can accomplish: Another study, from last year, found that women whose jobs gave them greater professional status than their husbands were more likely to feel resentful or embarrassed by their husbands’ lower position — but those feelings didn’t hurt their relationships when the men provided tangible support, like caring for children or older relatives.

“Make a list of whose responsibility it is to take out the trash, make sure the car insurance gets paid, decide how much to spend on groceries, etc.,” said Sonya Britt-Lutter, an associate professor of financial planning at Kansas State University, who recently developed a program to guide couples through financial conversations.

Article source: https://www.nytimes.com/2018/07/06/your-money/marriage-men-women-finances.html?partner=rss&emc=rss