(While there has not been a draft since 1973, men ages 18 to 25 are still required by federal law to register. But FAFSA applicants will now remain eligible for financial aid even if they have not registered, said Mark Kantrowitz, a financial-aid expert.)

The FAFSA collects financial details about students and their families and acts as a portal to grants, scholarships and loans for higher education. Last year, Congress approved changes to the form and the financial aid process, trimming the number of questions by about two-thirds and tweaking its underlying formula for determining who receives aid.

The approved changes include replacing the so-called “expected family contribution,” which applicants found confusing. Instead, a “student aid index” will be used as a guideline for the level of financial help for which a student qualifies. The updated formula broadens access to federal need-based Pell grants and shields more of a family’s income from financial aid calculations. And in a move that has already prompted some opposition, the revised formula eliminates a break for families with multiple students in college at the same time.

Taken together, the changes represent a “significant overhaul” of the student aid process that will take time to put into effect and communicate, according to the student aid office. Most of the changes were supposed to take effect for the 2023-24 academic year. But the office said it would instead take a “phased” approach, delaying some changes by another year, to the 2024-25 school term.

In at least one case, the impact of a future change may be felt sooner. The federal legislation eliminated a question about cash support, so funds taken from grandparent-owned 529 college savings accounts will no longer affect a student’s eligibility for federal aid. That change will probably take effect for the 2024-25 school year, Mr. Kantrowitz said, when the FAFSA would be based on income from the tax year 2022. “So starting next year, 529 plans owned by the grandparents or anybody other than the student or parent will no longer affect eligibility” for need-based federal aid, he said in an email.

Here are some questions and answers about the FAFSA and financial aid:

When should I fill out the FAFSA?

As soon as possible after it becomes available on Oct. 1, financial aid experts say. Many states and colleges use the form to determine scholarship aid, and some programs award the money on a first-come, first-served basis until available funds are depleted. A list of deadlines for both federal and state aid programs is available on the federal student aid website.

And note: While the federal deadline for filing a FAFSA extends into the summer after a given academic year, waiting until then means you will probably be eligible only for loans. The FAFSA for the current academic year, for instance, has a federal filing deadline of June 30, 2022.

Article source: https://www.nytimes.com/2021/09/17/your-money/fafsa-changes-2022.html

“All of this legislation is focused on the individual and upping the ante for the wealthy,” said Michael Kosnitzky, a partner at the law firm Pillsbury Winthrop Shaw Pittman. “Increasing the corporate tax rate does not get at the wealthy because corporate taxes are paid by the shareholders, who get less dividends, the employees who get less salary, and the consumer, who pays more for goods and services. These proposals get at personal income tax.”

The proposed top income tax rate of 39.6 percent looks like the old top rate of 39.6 percent from 2017. It kicks in at $400,000 of income for an individual and $450,000 for a couple, which is slightly lower than the income level in 2017. Currently, the highest income tax bracket, at 37 percent, starts at $523,600 for an individual and $628,300 for a couple.

But those affected by the new rate would also pay more because there are fewer deductions than there were in the tax code before the 2017 changes.

“You have to look at the effective rate,” said Pam Lucina, chief fiduciary officer and head of trust and advisory services at the financial services firm Northern Trust. “We have far fewer deductions, so that 39.6 percent rate is a much higher rate.”

The one that affected many people was the loss of the full deduction for state and local taxes, or SALT. In the 2017 changes, the deduction was limited to $10,000 and primarily affected people who lived in Democratic-controlled states in the Northeast and on the West Coast, where state income and property taxes are high.

Article source: https://www.nytimes.com/2021/09/17/your-money/tax-changes-wealthy.html

(While there has not been a draft since 1973, men ages 18 to 25 are still required by federal law to register. But FAFSA applicants will now remain eligible for financial aid even if they have not registered, said Mark Kantrowitz, a financial-aid expert.)

The FAFSA collects financial details about students and their families and acts as a portal to grants, scholarships and loans for higher education. Last year, Congress approved changes to the form and the financial aid process, trimming the number of questions by about two-thirds and tweaking its underlying formula for determining who receives aid.

The approved changes include replacing the so-called “expected family contribution,” which applicants found confusing. Instead, a “student aid index” will be used as a guideline for the level of financial help for which a student qualifies. The updated formula broadens access to federal need-based Pell grants and shields more of a family’s income from financial aid calculations. And in a move that has already prompted some opposition, the revised formula eliminates a break for families with multiple students in college at the same time.

Taken together, the changes represent a “significant overhaul” of the student aid process that will take time to put into effect and communicate, according to the student aid office. Most of the changes were supposed to take effect for the 2023-24 academic year. But the office said it would instead take a “phased” approach, delaying some changes by another year, to the 2024-25 school term.

In at least one case, the impact of a future change may be felt sooner. The federal legislation eliminated a question about cash support, so funds taken from grandparent-owned 529 college savings accounts will no longer affect a student’s eligibility for federal aid. That change will probably take effect for the 2024-25 school year, Mr. Kantrowitz said, when the FAFSA would be based on income from the tax year 2022. “So starting next year, 529 plans owned by the grandparents or anybody other than the student or parent will no longer affect eligibility” for need-based federal aid, he said in an email.

Here are some questions and answers about the FAFSA and financial aid:

When should I fill out the FAFSA?

As soon as possible after it becomes available on Oct. 1, financial aid experts say. Many states and colleges use the form to determine scholarship aid, and some programs award the money on a first-come, first-served basis until available funds are depleted. A list of deadlines for both federal and state aid programs is available on the federal student aid website.

And note: While the federal deadline for filing a FAFSA extends into the summer after a given academic year, waiting until then means you will probably be eligible only for loans. The FAFSA for the current academic year, for instance, has a federal filing deadline of June 30, 2022.

Article source: https://www.nytimes.com/2021/09/17/your-money/fafsa-changes-2022.html

“While credit history is a key element in evaluating a borrower’s ability to make a mortgage payment, building credit in the United States is not an equitable endeavor,” said Hugh Frater, Fannie Mae’s chief executive, in a blog post.

So rent should count for something. But according to FICO, which uses data from credit reports to build scoring systems that are already part of the mortgage underwriting process, only 0.3 percent of the 80 million or so adults who live in rental housing have any mention of rent in their credit files.

How can this be? I wanted to talk to the three dominant bureaus — Equifax, Experian and TransUnion — about renters. Equifax and TransUnion did not reply at all, while Experian sent a statement in lieu of an interview. As is often the case when I ask after their doings, my request somehow ended up at their industry association instead, even though I hadn’t asked to speak with anyone there.

Francis Creighton, who runs the Consumer Data Industry Association, said it, too, was aghast at the fact that, according to FICO, information on rent payments made up less than 1 percent of the data that companies and others sent to the bureaus.

“It’s a really big problem,” he said. “We desperately want that information on file.”

For the credit bureaus to get it, however, landlords — including hundreds of thousands of people who own an apartment here or a three-flat there — would have to hand it over.

“They have no incentive to do it,” said Laurie Goodman, vice president of housing finance policy at the Urban Institute. It’s worth doing only if everyone contributes, because then the landlords could make use of that new collection of data to screen tenants. And everyone is very much not contributing at present.

Given that the credit bureaus don’t have the rental data that Fannie Mae and others want so much, Fannie developed a somewhat abstruse workaround involving a “desktop underwriter” validation engine and orders for “verification of assets.”

Article source: https://www.nytimes.com/2021/09/11/your-money/paying-rent-mortgage.html

“While credit history is a key element in evaluating a borrower’s ability to make a mortgage payment, building credit in the United States is not an equitable endeavor,” said Hugh Frater, Fannie Mae’s chief executive, in a blog post.

So rent should count for something. But according to FICO, which uses data from credit reports to build scoring systems that are already part of the mortgage underwriting process, only 0.3 percent of the 80 million or so adults who live in rental housing have any mention of rent in their credit files.

How can this be? I wanted to talk to the three dominant bureaus — Equifax, Experian and TransUnion — about renters. Equifax and TransUnion did not reply at all, while Experian sent a statement in lieu of an interview. As is often the case when I ask after their doings, my request somehow ended up at their industry association instead, even though I hadn’t asked to speak with anyone there.

Francis Creighton, who runs the Consumer Data Industry Association, said it, too, was aghast at the fact that, according to FICO, information on rent payments made up less than 1 percent of the data that companies and others sent to the bureaus.

“It’s a really big problem,” he said. “We desperately want that information on file.”

For the credit bureaus to get it, however, landlords — including hundreds of thousands of people who own an apartment here or a three-flat there — would have to hand it over.

“They have no incentive to do it,” said Laurie Goodman, vice president of housing finance policy at the Urban Institute. It’s worth doing only if everyone contributes, because then the landlords could make use of that new collection of data to screen tenants. And everyone is very much not contributing at present.

Given that the credit bureaus don’t have the rental data that Fannie Mae and others want so much, Fannie developed a somewhat abstruse workaround involving a “desktop underwriter” validation engine and orders for “verification of assets.”

Article source: https://www.nytimes.com/2021/09/11/your-money/fannie-mae-rental-payment-history.html

“Our goal is to get policyholders back on their feet as quickly as possible,” Mr. Maurstad said.

Many basements in New York and New Jersey flooded from torrential rain, but such losses are unlikely to be covered unless the property carried flood insurance, experts say. Even then, federal flood policies offer limited coverage for damage to property in basements. The National Flood Insurance Program’s summary of coverage says its policies cover major systems and appliances, but it may offer limited coverage for belongings like couches, computers and televisions in a basement.

Standard homeowner policies may offer some coverage for damage in basements if the policyholder purchased extra insurance, known as an endorsement or “rider,” for sump-pump failure, said Christine O’Brien, the president of the Insurance Council of New Jersey, a trade association. So it may be worth filing a claim and having an adjuster assess the damage.

But coverage depends on the details of your rider. An endorsement may cover damage from a failed sump pump that was overwhelmed by, say, a burst interior pipe — but not if the cause was a flood, said Ellen Melchionni, the president of the New York Insurance Association.

“Every policy is different,” she said.

Loretta Worters, a spokeswoman for the Insurance Information Institute, another trade group, said a sump-pump endorsement typically provided modest protection — $5,000 to $10,000 — for belongings destroyed by overflow from a sump pump or by a backed-up sewer or drain. There is usually a separate deductible, often a percentage of the coverage listed on the rider, so you should check with your insurer.

Homeowners who don’t have flood coverage may be eligible for federal disaster grants, which may cover some of the damage, or low-interest loans.

Major insurers are increasingly offering remote inspections over video because of the pandemic. If you have a mobile phone or tablet and are comfortable doing so, a remote inspection may occur sooner than an in-person visit.

To help speed the claims process, consumer experts advise contacting your insurance agent and filing a claim as soon as possible, since insurers typically handle them on a first-come, first-served basis. Write down your claim number or store it in your phone — wherever it’s easily accessible. And start a log of contacts with your insurer, listing the date, time and a short summary of the conversation.

Article source: https://www.nytimes.com/2021/09/10/your-money/ida-flood-damage-insurance-policy.html

Some people who bought homes in unfamiliar areas or have fewer choices in an overheated market have found after the fact that the properties, particularly older, coastal homes, were uninsurable through traditional means. To get coverage, they have to turn to what is called the surplus market, where the rates set by the state insurance regulator do not apply. An insurer in that market can charge whatever it wants.

“Wealthy individuals are buying homes quickly in places like Florida because of a lack of inventory, and before they would have bought a home that was better built for the same price,” Mr. Woodward said. “Then we have a 30- to 60-day close, and we have to get them coverage. A lot of people didn’t envision the cost of that insurance when they made the purchase.”

Insurance on an older $1 million South Florida home that was not built to the region’s codes, which have protections against wind and rain damage, could be $40,000, compared with $3,000 for a similar home elsewhere, Mr. Woodward said. Getting that old home up to code so the premiums would come down, including new windows, doors and roof, can cost $100,000 or more, he said.

Mr. Buchmueller said a friend was building a home in Florida with an eye toward protecting it from extreme weather. The home isn’t in South Florida, so the building codes are looser, but the friend asked that the roof be strapped on and meet the more stringent code.

“The contractor told him that required 29,000 more roof fasteners,” Mr. Buchmueller said. “It’s not a small measure to add the South Florida code to a home.”

Whether it’s a starter home or a $5 million beach house, some owners are more mindful than others about taking care of their house.

“Some people treat their home like it’s their home,” Mr. Woodward said. “But some people treat their home like it’s just a place where they live. And I don’t care what you’re spending.”

Extreme weather may force more homeowners to take better care of their houses — or risk losing their insurance.

Article source: https://www.nytimes.com/2021/09/10/your-money/extreme-weather-homeowner-insurance.html

As for that tax return, it never hurts to organize all the tax data you can during the last few months of the calendar year. It’s a record of your recent past and a window into your long-term future (say, via any notation about retirement savings). The process may also serve as a reminder that there is often at least one more thing you could do in the present to help yourself while handing less money over to various governmental bodies.

Prepare yourself now and you can file as early as possible in 2022 and quickly get any refund you have coming. One note of caution: Donna Trainor, a financial planner and accountant in Atlanta who has done extensive pro bono work with people in danger of losing their homes, worries that recipients of the new, monthly tax credit payments don’t realize that it is a kind of advance. Getting it now means you may not get the same size tax refund that you normally do, so you’ll need to take any such expectation out of your 2022 budget.

Don’t just contemplate catastrophe.

Now, for the searching questions about your feelings.

Even for those accustomed to financial uncertainty, the pandemic may have increased the kind of catastrophic thinking that can suffocate your ability to plan and prioritize.

Out in Hollywood, among a class of workers that resemble theater people like our money mentor Stephen, even the most successful were often gripped by fear, said Leighann Miko, whose financial planning firm works often with people who move from gig to gig.

“The fear was that things would take much longer to recover,” she said. “People thought they were going to have to pursue other means of employment.” What they really hoped to avoid was what she called “Plan Z,” the code for former jobs in different industries that they were hoping never to have to take again.

Ms. Miko sees a kind of psychological scarring all around her, even among people making $600,000 per year. Cry them a river, but they know good and well that even absent a pandemic, a year with just $30,000 in earnings could easily be around the next corner. To help those who can’t conceive of doing anything beyond the dream jobs they’ve worked so hard to obtain, she plans and schemes — and tries to get them to, as well.

“Minimizing the catastrophizing means ensuring there are multiple layers to every safety net,” she said. “Because at some point or another, they are going to fall through the first one and then the second one.”

Article source: https://www.nytimes.com/2021/09/04/your-money/pandemic-money-advice.html

Pay-later services can fall into something of a gray area because of the length and terms of their products. They don’t carry the same dispute protections that consumers have come to expect from credit card providers, the Consumer Financial Protection Bureau has said, and getting refunds can be more complicated.

And last year, the California Department of Financial Protection and Innovation temporarily halted the top players’ main businesses and required them to refund nearly $2 million in fees after concluding that they had structured their products to evade regulation. To do business in the state, they must now be licensed lenders, which means considering consumers’ ability to repay loans, rate and fee caps, and responding to consumer complaints.

The services also require some self-regulation, users said.

Kimberly Williams, an avid user of several services, said she would only recommend them to people who are financially fastidious.

“You cannot use these types of plans and not be fully in sync with your finances, how the plans work and what you can afford,” said Ms. Williams, 42, a health care research site manager.

Ms. Williams previously worked as a wardrobe stylist and has a side business designing clothes that are manufactured in Lagos, Nigeria. She dedicates a portion of her monthly budget to clothing purchases that she often resells, which makes pay-later an attractive option.

As she’s used the services more, they’ve increased her spending power — $10,000 at Affirm, up from $2,000 — and she’s earned perks, like free shipping and the option of two additional weeks to make her first payment.

“The rewards, the benefits, the increase of availability to spend — it comes at you quick,” she said. “It becomes more and more tempting.”

Article source: https://www.nytimes.com/2021/09/03/your-money/buy-now-pay-later-afterpay-affirm-amazon-square.html

“We’re seeing a broader selection of very interesting wines because of this warming,” said Dave Parker, founder and chief executive of the Benchmark Wine Group, a large retailer of vintage wines. “We’re seeing regions that historically were not that highly thought of now producing some excellent wines. The U.K., Oregon, New Zealand or Austria may have been marginal before but they’re producing great wines now. It’s kind of an exciting time if you’re a wine lover.”

The rising temperatures have certainly hurt some winemakers, but in some wine-growing areas the heat has been a boon for vineyards and the drinkers who covet their wine. Mr. Parker said growing conditions for sought-after vintages in Bordeaux used to come less frequently and sometimes only once every decade: 1945, 1947, 1961, 1982, 1996 and 2000. They were all very ripe vintages, because of the heat. But in the last decade, with temperatures rising in Bordeaux, wines from 2012, 2015, 2016, 2018, and 2019 are all sought after — and highly priced.

And then, there are the wines from previously overlooked regions.

“What I’d say is, currently, there hasn’t been a better time for wine collectors,” said Axel Heinz, the estate director of Ornellaia and Masseto, two of Italy’s premier wines. “The vintages and wine have become so much better. And for us, the changes over the past 20 years have put a focus on many growing regions that collectors weren’t interested in before, like Italian and Spanish wine.”

(Still, he said, his vineyards are not immune to the negative effects of climate change, with increased risk of spring frosts and hail.)

Yet for all the romance attached to making wine, it’s essentially farming. So while winemakers have been reaping the benefits of higher temperatures, the grape growers have had to adapt in ways that are going to affect prices as well as the types of grapes. (And of course, vineyards are sometimes integrated, so the grape growers and the winemakers are all part of the same operation.)

Article source: https://www.nytimes.com/2021/09/03/your-money/wine-climate-change.html