An Economist’s Rule for Making Tough Life Decisions

An Economist’s Rule for Making Tough Life Decisions

Quartz  Sarah Todd

"Whenever you cannot decide what you should do, choose the action that represents a change."

 “You must change your life,” Rainer Maria Rilke exhorts readers in the final line of his poem “Archaic Torso of Apollo.” It’s a surprise-twist ending, meant to capture the sudden nature of epiphanies. Having spent the entire poem contemplating the beauty of an ancient Greek statue, Rilke practically reaches through the page to shake readers by the shoulders, urging us to transform ourselves—to use our rapidly-dwindling time on Earth as wisely as Apollo’s sculptor did.

But changing your life is a big deal. It takes a lot of work and emotional energy. And it’s often very difficult to predict if a dramatic turn will actually make us happier and more fulfilled, or if it will be the biggest mistake ever and we’ll shrivel up into little raisins of regret.

So we waffle over whether or not to quit a job, change careers, start a business, or go back to school, weighing endless pros and cons. In behavioral economics, this phenomenon is known as status quo bias. People are generally predisposed to favor sticking with their current circumstances, whatever they may be, instead of taking a risk and bushwhacking their way toward a different life.

That’s an instinct we should fight against, according to the findings of a new study by Steven Levitt, University of Chicago economist and Freakonomics co-author, published in Oxford University’s Review of Economic Studies.

The study asked people who were having a hard time making a decision to participate in a randomized digital coin toss on the website FreakonomicsExperiments.com. People asked questions ranging from “Should I quit my job?” to “Should I break up with my significant other?” and “Should I go back to school?” Heads meant they should take action. Tails, they stuck with the status quo.

Ultimately, 20,000 coins were flipped—and people who got heads and made a big change reported being significantly happier than they were before, both two months and six months later.

“The data from my experiment suggests we would all be better off if we did more quitting,” Levitt said in a press release. “A good rule of thumb in decision making is, whenever you cannot decide what you should do, choose the action that represents a change, rather than continuing the status quo.”

Do more quitting may sound like strange advice in the midst of a pandemic that’s mauling the labor market. Those lucky enough to still have a stable income and health insurance may be quite sensibly wary of jettisoning those things for the great unknown.

But dig a little deeper, and Levitt’s suggested rule of thumb for decision-making turns out to be decidedly evergreen, and may even have added significance in current upheavals of the Covid-19 era. We’re biased toward upholding the status quo, but it’s a bias that hurts us.

Flip a Coin, Make a Change

There are plenty of caveats to this experiment, which collected data over the course of a year beginning in 2013. For one thing, as Levitt explains, the subject pool wasn’t at all random.

To Read More: LINK

The Latest Social Security Trustees Report Spurs Angst About The Program's Solvency

The Latest Social Security Trustees Report Spurs Angst About The Program's Solvency

Kerry Hannon·Senior Columnist  Yahoo Finance  Fri, May 17, 2024

Amid uncertainty around Social Security, here's what financial advisers are telling clients

Social Security isn’t shattered, but it’s shaky.

The new report on Social Security, which predicts that the combined retirement and disability trust fund reserves will go broke in 2035, has put more Americans on edge, especially those nearing retirement who are worrying about how much in benefits they can expect.

The 2024 Social Security and Medicare trustees report projects insolvency one year later than last year’s estimate. That scarcely brighter outlook stems from the strong economy and wage growth, which has ramped up payroll tax payments that fund the program. For now, low unemployment has meant that more workers are adding to the program, even while a rising number of baby boomers begin to tap their benefits, the trustees said.

The potential depletion of the fund does not, however, translate to an empty till. There will still be money to pay benefits at that stage — though only 83% of what’s been promised to current and future beneficiaries. In other words, without a fix, beneficiaries could see a 17% cut in benefits.

“Congress is painting itself into a corner on fixing Social Security’s pending insolvency,” Mary Johnson, a Social Security and Medicare policy analyst, told Yahoo Finance. “Failure to act on the program in time would lead to automatic benefit cuts.”

How widely would that cut be felt? The program paid nearly $1.4 trillion in benefits last year to about 67 million Americans. For about half of seniors, Social Security provides at least half of their income, and for about 1 in 4 seniors, it accounts for at least 90% of income.

There are several solutions to fix the shortfall, including ratcheting up payroll taxes that fund the program, currently 12.4% split evenly by employees and employers. Other proposals include raising the retirement age for younger workers or lifting the cap on how much of a person’s income is subject to the Social Security tax. For 2024, the Social Security tax limit is $168,600.

Will Social Security be there for you?

One of people’s greatest retirement fears is a reduction in or elimination of Social Security in the future, according to research from the Transamerica Center for Retirement Studies. Seven in 10 people are concerned that Social Security will not be there for them when they’re ready to retire. And nearly 1 in 3 people rely on or expect to rely primarily on Social Security.

I talked to several experts about the advice they’re giving their clients on planning for Social Security as part of their retirement income. Here’s what they said:

1. Assume a reduced benefit

To Read More:

https://news.yahoo.com/finance/news/amid-uncertainty-around-social-security-heres-what-financial-advisers-are-telling-clients-090043580.html

7 Secret Perks of Having a High Credit Score

7 Secret Perks of Having a High Credit Score

Adam Palasciano   Wed, May 15,

In an economy highlighted by sky-high interest rates for auto and home loans, having a good credit score has probably never mattered more.

According to the Consumer Financial Protection Bureau, a credit score is a prediction of your credit behavior, such as how likely you are to pay a loan back on time, based on information from your credit reports.

If your credit score is lacking, you might want to consider ways to boost it as soon as you can. Why? Because having a high credit score comes with some sweet financial perks.

Best Perks of Having a High Credit Score

Here are seven secret perks of having a high credit score, according to RedRoofRipon and Equifax:

Access to lower interest rates: A high credit score will translate into favorable interest rates on auto loans and mortgages. If you’re in the market for a new car or to buy your first home, the status of your credit score is the first thing you’ll want to be concerned about. Even a difference of just 1% can save you thousands (if not tens of thousands) of dollars over the life of a sizable loan.

More favorable loan terms: A high credit score can also mean more favorable loan terms. These can be lower down payment requirements and extended repayment periods, depending on what your lender offers.

Higher credit limits: Since a higher credit score shows that you’re more likely to pay back your loans without an issue, some financial institutions and lenders will be glad to offer you higher credit limits. This can be for an auto loan or mortgage — or even a higher spending limit on your credit card.

More likely to be approved For rentals: Renting an apartment comes with certain financial approvals from the landlord. To guarantee you’ll be a responsible paying tenant for the duration of a lease, landlords will often run credit checks before you can sign. The higher your credit score, the more likely you’ll be approved to move in.

Loans can be approved faster: Sometimes, a higher credit score means you won’t have to wait very long for your loan or credit card application to be approved. Since a higher score is indicative of your ability to pay your bills on time and in full, there usually isn’t a need for the lender to take a closer look at your finances before approving.

To Read More:

https://news.yahoo.com/finance/news/7-secret-perks-having-high-184605843.html

5 Simple, Effective Ways To Set Yourself Up for a Financially Secure Future

5 Simple, Effective Ways To Set Yourself Up for a Financially Secure Future

Gabrielle Olya  Tue, May 14, 2024

One of the easiest ways to set yourself up for a financially secure future is to contribute to your workplace retirement savings account — but many women are not doing this. In fact, only 52% of women participate in 401(k) plans, and the average 401(k) account balance for men ($89,000) is 50% greater than that of women ($59,000), according to Bank of America’s 2023 Financial Life Benefits Impact Report.

This means they may also be leaving free money on the table if their employers offer matching contributions. Given the unique financial challenges that women face — including the gender pay gap and a longer life expectancy resulting in a need for more retirement savings — we should be doing all we can to maximize retirement accounts to ensure we’re on track for a secure financial future.

In this “Financially Savvy Female” column, we’re chatting with Julie Virta, CFP, senior financial advisor for Vanguard’s Personal Advisor Services, about how women can set themselves up for a financially secure future.

What are some ways women can maximize an employer-sponsored retirement account?

Vanguard research has shown us that savings rates, diversification, costs and the ability to remain disciplined and focused on long-term investment outlook are key factors that can give participants the best chance for success.

We recommend that participants build up to the recommended savings rate of 12-15% by first trying to meet their employer match (if applicable), and then increasing by 1% annually until they achieve the desired savings rate, which is a combination of employee and employer contributions.

For context, we found that annual automated savings rate increases result in participants saving 20-30% more after three years than employees without automatic increases. If an employer plan does not offer this, participants can consider increasing their savings rate annually on their own.

To note, when switching jobs, a rollover is an option to pursue, as they likely come with flexible investment choices and no tax consequences. We recommend marking your calendar as quickly as possible to see when you can start contributing to the new plan.

What should women do if they do not have access to an employer-sponsored account? How should they decide between traditional and Roth IRA?

In deciding between a Roth and traditional IRA, employees should factor in their current and anticipated tax brackets. When the marginal tax rate stays the same, the Roth and the traditional IRA will generate the same after-tax withdrawal values, even though Roth taxes are paid at the time of contribution (as contributions are made with after-tax dollars) and traditional IRA taxes are paid at the time of withdrawal.

To Read More:

https://news.yahoo.com/finance/news/simple-effective-ways-set-yourself-163447747.html

5 Ways The Rockefellers Created Generational Wealth

5 Ways The Rockefellers Created Generational Wealth

The Rockefellers Are Still One of the Richest Families of All Time — 5 Ways They Created Generational Wealth

Dawn Allcot   Sun, May 12, 2024

Only 10% of family wealth makes it to the third generation, according to a landmark Williams Group wealth consultancy study reported by Reuters in 2015. But a handful of families throughout history have managed to buck this “third generation curse” to create a legacy that has lasted for centuries. Among the best known are the Rockefellers.

How John D. Rockefeller Built His Wealth

John D. Rockefeller was one of the most famous business moguls of the 19th and early 20th centuries, building his family’s fortune through the Standard Oil Company. His company controlled 90% of the U.S. refineries and pipelines at a time when a need for oil was increasing thanks to the introduction of internal combustion engines and growing demands for electricity, according to History.

Rockefeller had amassed a net worth of nearly $900 million by 1912, according to Smithsonian Magazine. That’s equivalent to about $28 billion in today’s dollars and a staggering sum by 1912 standards.

Ultimately, the Supreme Court ordered the dissolution of the Standard Oil Trust, declaring it in violation of antitrust laws. The move broke Standard Oil into a number of businesses that used the Standard Oil name. Subsequent mergers created oil and gas industry leaders like ExxonMobil and Chevron.

The Rockefeller family’s name and wealth live on — And so do its philanthropic efforts, including $500 million John Rockefeller personally gifted to charities.

The Rockefeller Family Today

The Rockefeller family is 200 members strong and has a cumulative net worth of $10.3 billion, according to Forbes. The wealthiest and most prominent family member of this century, David Rockefeller, was the world’s oldest billionaire at 101 years old, with a net worth of $3.3 billion when he died in 2017.

How the Rockefellers Created Generational Wealth

What did the Rockefeller family do right that so many other families fail to implement?

Accounted for Every Dollar

Whether your net worth measures in the seven figures or you’re living paycheck to paycheck, every dollar without a specific job is in danger of being wasted. The Rockefellers have a team of financial managers to ensure that every dollar is put to good use, leveraging their money to make more money.

Established a Family Office

The Rockefellers were the first family to establish a full-service single family office in the U.S., according to Deloitte. The Rockefeller Global Family Office manages all facets of the family’s wealth, investments and business dealings.

Created Irrevocable Trusts

The Rockefellers use irrevocable trusts, which heirs cannot easily change, to ensure that money gets passed on as it should, according to Barrons. An irrevocable trust removes assets from your taxable estate, which means your heirs might not pay tax on that money. An irrevocable trust can also protect those assets from lawsuits or creditors, which can provide a benefit if you are a high-profile personality or in a high-risk career where you might get sued.

Leveraged Legal Tax Avoidance Strategies

To Read More:

https://news.yahoo.com/finance/news/rockefellers-still-one-richest-families-000009583.html

7 Unforeseen Financial Obligations You Take On When You Retire

7 Unforeseen Financial Obligations You Take On When You Retire

John Csiszar  Mon, May 13, 2024

Once you retire, you want your financial life to be as uneventful as possible. If you’re like most retirees, you’ll be living on a combination of investment income and Social Security benefits, and that income will be relatively fixed and predictable.

This means that unexpected financial obligations can cause serious distress, as it might be hard to find a way to pay for them without going into debt. To avoid falling into this situation, it’s best to plan ahead and build a bigger emergency fund before you retire so that none of these expenses send you into a financial tailspin.

General Healthcare Expenses

It’s a fact of life that at least statistically, healthcare expenses rise as you age. The problem in terms of budgeting for retirement is that there’s no way to know just how high those costs will go. For this reason, it’s best to head into retirement expecting these so-called “unexpected” healthcare costs and to budget on the high side if at all possible.

Elderly Parents

Even if you retire at 65, it’s entirely possible that your parents are still alive, and it’s also possible or even probable that they will need your assistance in some way. Oftentimes, this assistance comes in the form of financial aid. If you’re already struggling to live on your retirement budget, having to take care of your elderly parents might be enough to break the bank.

As you approach retirement, however, you’ll likely have a good idea of how much financial support you might have to provide for your elderly parents, and it’s important to incorporate this into your budget, if possible.

Long-Term Care

In addition to rising general healthcare expenses, many retirees will have to plan for long-term care. Research shows that up to 70% of adults 65 and older will need long-term care in their lifetimes, so it’s definitely an expense you should anticipate could arise after you retire. The national average median cost for long-term care ranges from $2,058 for adult day health care to $9,733 for a private room in a nursing home, according to Genworth.

Although it’s hard to budget for large expenses, knowing they are coming can help in the planning process. One of the avenues you might consider is getting long-term care insurance before you need it.

Adult Children

https://finance.yahoo.com/news/7-unforeseen-financial-obligations-retire-120029536.html

Avoid These 7 Mistakes When Rolling Over Money Between Retirement Accounts

Avoid These 7 Mistakes When Rolling Over Money Between Retirement Accounts

Laura Beck   Fri, May 10, 2024

One of the most important financial decisions you’ll make is how to handle your retirement accounts when changing jobs. Rolling over your 401(k) or other accounts correctly can ensure your hard-earned retirement savings keep growing tax-deferred. But making mistakes during this process can cost you big time in taxes, penalties and lost future growth.

Here are six potentially costly mistakes to avoid when rolling over retirement money, according to financial advisors.

Having the Rollover Check Made Payable to You

“Rolling over your 401(k) to an IRA or another 401(k) is usually done by check. Do not have the check made out to yourself!” said Jake Skelhorn, CFP and former Merrill Lynch advisor now at Spark Wealth Advisors. “This is taxable and will be subject to a mandatory 20% withholding. The rollover check needs to be made payable to the gaining institution, or sometimes the name of your employer if it’s a 401(k).”

Not Paying Off 401(k) Loans First

“Pay off any loans prior to rolling over,” Skelhorn shared. “Most of the time, processing a rollover closes your old 401(k), which will cause you to default on any outstanding loan balances.

The loan will be reclassified as a withdrawal and subject to taxes and possibly penalties. If you can, pay off the loan first to not only avoid taxes but put more money back into the tax-deferred account where it can continue compounding.”

Using a 60-Day Indirect Rollover

“Using a 60-day rollover, also called an indirect rollover, is a huge mistake,” said Stephen Kates, CFP and principal financial analyst for Annuity.org. “All rollovers should be set up to transfer in what is called a ‘trustee-to-trustee transfer’ process instead.”

With a trustee-to-trustee transfer, the money moves directly between financial institutions without you taking possession of it. This avoids the 60-day time limit, mandatory 20% tax withholding and risk of forgetting to redeposit funds before the deadline.

“A trustee-to-trustee transfer means that the money will move directly between the financial institutions and will not be received or handled by the person who owns the account,” Kates said. “This is a cleaner and safer way to transfer the money and will limit any mistakes.”

Not Separating Pre-Tax and Post-Tax Funds

“It is important to understand the tax status of your retirement money especially if you have a mixture of pre- and post-tax contributions in your retirement account,” Kates said. “When making transfers, investors will need to direct pre- and post-tax money to separate accounts to make sure they are not either commingled incorrectly or mailed out as a retirement distribution.”

Being Unprepared With Transfer Details

Before initiating a rollover, you’ll need to have these key details about the receiving account:

Name of the receiving institution

Address of the receiving institution

Account number at the receiving institution

Type of account (IRA, 401(k), etc.) to receive the funds

“Prepare the necessary information before you start your transfer,” Kates said. “Most institutions need [these] four pieces of information to complete a transfer.”

To Read More:

https://news.yahoo.com/finance/news/m-financial-advisor-avoid-7-120020539.html

5 Money Moves To Keep Financially Ahead

High Inflation May Be Here To Stay: 5 Money Moves To Keep Financially Ahead

Cynthia Measom    Tue, May 7, 2024

Inflation is still high and not likely to come down anytime soon, as reported by USA Today. But instead of risking falling behind, what if you could turn this economic challenge into an opportunity to keep (or get) financially ahead?

From tapping into the best budgeting tools to smart investment moves and even bringing in extra income, here are ways to not just cope, but potentially thrive in today’s economy.

Establish and Follow a Budget

If you don’t have a clear budget you’re following, now’s a great time to establish one so you can save money even as costs remain high,” said Todd Stearn, founder and CEO of The Money Manual. “If the idea is overwhelming or you just aren’t sure where to start, budgeting apps like Rocket Money, Simplifi and YNAB can help.”

Stearn said you can use these apps to track your progress, including how much you’re saving toward goals. “It’s likely to be more than you expected, which is fantastic motivation to continue,” he said.

Invest In CDs

Stearn recommends shopping around for the best rates. He said the top CDs with terms around one year are offering rates of over 5%. He explained that over 5% is a great rate to lock in if interest rates do drop during the term.

“One year is also a short enough term that you’re unlikely to see rates rise while you’re locked in to the point where you’re losing money with these CDs,” he said. “This is especially true considering that the Federal Reserve just indicated that a rate hike anytime soon is unlikely.”

Transfer Your Credit Card Balance

“As interest rates remain high amid inflation, carrying a credit card balance is costlier than ever thanks to interest rates hovering around 25%,” said Andrea Woroch, a consumer and money-saving expert. “As these fees pile up, debt grows and becomes harder to pay off.”

Woroch suggested saving money by transferring your balance to a zero balance transfer card. She said to look for the longest no-interest period — some offer up to 21 months —  which will give you more time to pay down your balances with no interest.

Get a Side Hustle

Woroch said that increasing your income is the best way to survive inflation and afford a higher cost of living without digging yourself into debt.

“Though getting a raise or better paying job may not be options at the moment, you can find flexible side hustles that allow you to work as much or as little as you can each month, allowing you to boost your cash flow to pay higher bills,” she said. “Plus, many you can do right from home.

To Read More Go To Article Here:

https://news.yahoo.com/finance/news/high-inflation-may-stay-5-190010374.html

5 Frugal Money Habits Americans Can Learn From Other Countries

5 Frugal Money Habits Americans Can Learn From Other Countries

J. Arky   Tue, May 7, 2024

When Americans travel outside of the United States, there’s often a lot of culture shock experienced. The food might be prepared in a unique way and taste the exact opposite of what it is like at home. The languages are obviously different. And the amount of money people spend in other countries for everyday basic items … might not be as much.

This could be due to the exchange rate differences, or, it could just be the frugal habits that non-Americans have adopted in their financial lives.

The U.S. is known for its capitalism, wealth and price tags galore, but that doesn’t mean everyone has to spend a lot of money to meet their needs. Here are five frugal money habits Americans can learn from other countries.

Daily Grocery Shopping

Lots of Americans take one day out of the week to hit up the grocery store and buy everything they’ll need for the next seven or so days. In other places, a daily trip to the market can lead to surprising results, especially in their home-food budget.

“In places like Europe and Asia, many opt for daily visits to local markets,” said Jake Claver, financial director at Digital Ascension Group. “Buying fresh and only what’s needed for the day not only reduces waste but often results in healthier eating and surprisingly, savings over time. Americans, with their penchant for bulk buying, could re-evaluate this strategy.”

According to Kelly Palmer, founder of The Wealthy Parent LLC, “Europeans also save money by focusing on quality over quantity, especially when it comes to groceries. In European cities, you don’t find the same huge grocery stores you do in the U.S. which leads to a smaller, more curated selection of quality food. A smaller store means Europeans tend to just buy what they need and not stock up on items that will be wasted.”

Sharing Resources

In numerous Latin American cultures and countries, multi-generational collaboration is considered a financial cornerstone for families, creating an intricate and stable financial ecosystem. In Peru, for example, there is a practice of forming communal saving groups called “rondas” where community members add a weekly or monthly amount of funds to a shared pool.

Per tradition, this communal account goes to one member at a time, rotating among the participants while promoting saving habits. It also reduces reliance on financial institutions while strengthening community bonds.

“Beyond shared living arrangements, the insight lies in understanding the financial ecosystem that emerges from multigenerational support,” said John Browning, founder of Guardian Rock Wealth.

“In various parts of Africa and Asia, community sharing of resources, be it tools, books, or even skills, is commonplace,” Claver added. “This collective mindset not only strengthens community bonds but greatly reduces individual expenses.

 It’s not just about pooling resources; it’s about creating a dynamic network of financial wisdom, shared responsibilities, and mutual support. Americans can explore the depths of this cultural approach, considering how intergenerational collaboration can go beyond mere financial advantages to create a resilient family foundation.”

Repair Instead of Replace

To Read More:

https://finance.yahoo.com/news/5-frugal-money-habits-americans-171208752.html

The 1 Big Mistake You Should Never, Ever Make With Your Passport

The 1 Big Mistake You Should Never, Ever Make With Your Passport

BuzzFeed   Sun, May 5, 2024

A couple of years ago, I was invited to attend a friend’s July wedding in his wife’s hometown in northern Italy. As the date approached, I remarked to another friend who was also planning to travel from the U.S. for the celebration that I was glad I had just renewed my passport since it was due to expire in May. She responded cheerfully that she was all set because her passport wouldn’t expire until September.

She was mistaken. My friend was not all set because Italy, as part of the Schengen Area of European countries, requires visitors to have a passport that is valid for at least three months beyond the date they intend to depart.

Fortunately, she was able to expedite her passport renewal and make it to the wedding, but her situation highlighted a fairly common misconception about international travel.

Having A Current Passport Isn’t Always Enough

“A lot of us just think we need a valid passport to travel the world beyond our borders, but what many people don’t realize [is] that a current passport alone might not be enough,” said Katy Nastro, a spokesperson for the flight alert service Going.

Indeed, many countries require your passport to have a certain duration of validity remaining beyond the intended dates of your trip. The most common lengths are three and six months past the date you fly back to the U.S.

“A lot of countries, namely in Asia and the Middle East, require six months’ validity beyond your travel dates ― meaning if you take a trip to Vietnam in July, for example, your passport needs to be valid up until at least January,” Nastro explained. “If you arrive at the airport and try to get on your flight, some airlines won’t even let you board without this very important bit of time, in which case you run the risk of not being able to take your trip.”

Each country has a different timeline for passport validity, so international travelers need to familiarize themselves with these policies before booking a trip.

“Some may require three months, while others may require six months or even more,” said David Alwadish, the founder and CEO of the passport and visa service ItsEasy.com. “When some countries also require a visa and grant a multiyear paper visa, they may require at least one year or more [of] validity.”

The specific requirement depends on a variety of factors, including the country’s immigration policies, bilateral agreements and security risk considerations.

“Therefore, it’s crucial for travelers to thoroughly check the entry requirements of the specific country they plan to visit to ensure compliance with passport validity regulations,” Alwadish emphasized.

He and Nastro have both observed a lack of understanding around passport validity rules.

“It’s common for people to be unaware of the three- or six-month passport validity rule, particularly among those who don’t travel frequently or haven’t encountered it before,” Alwadish said. “The rule may not be consistently enforced across all countries, causing misconceptions among travelers. The complexity of immigration policies, which can change, adds to the challenge of staying informed. Lastly, passport validity requirements may not be well-publicized, leading to lower awareness among travelers.”

What’s The Reason For These Requirements?

 “These requirements ensure that visitors have a valid passport for the duration of their intended stay, as well as for a buffer period in case of unexpected delays or extensions,” Alwadish explained.

You might’ve planned a two-week sojourn in the South of France, for instance, but maybe after a few days you realize that you actually want to stay for two months. Or perhaps something happens that’s out of your control.

“This is mainly out of precaution,” Nastro said. “Let’s say you fall seriously ill or have an accident and then need to stay in that country longer than intended. If your passport expires during this unplanned time, it can cause a mountain of issues upon trying to exit the country.”

The period of passport validity for international tourists provides an extra cushion in case you sustain an injury that precludes you from flying for a while, or you delay your return for other personal reasons. The point is to account for the fact that plans might change.

“Countries set a minimum of three or six months of passport validity for foreign visitors to facilitate efficient immigration procedures, bolster security measures and improve emergency management,” Alwadish said. “This ensures that visitors have a valid travel document throughout their stay and can respond effectively to unforeseen circumstances. Furthermore, these requirements promote fairness and reciprocity in visa policies, fostering balanced relationships between countries.”

To Read More:

https://www.yahoo.com/lifestyle/1-big-mistake-never-ever-111603933.html

Why You Should Think Twice About Buying a Home With Someone Before You’re Married

I’m an Attorney: Why You Should Think Twice About Buying a Home With Someone Before You’re Married

Andrew Lisa   Fri, May 3, 2024

According to Quicken Loans, since 2013, there’s been a sharp uptick in the trend of couples buying houses before getting married. While getting an early jump on building equity can be a proactive step toward financial freedom, the strategy has several downsides that can’t be ignored.

 “Buying a home with someone before marriage presents unique challenges from a legal and financial perspective,” said Marty Burbank, an elder law and estate planning attorney and the founder of OC Elder Law in Orange County, California.

Here’s a look at the potential downsides.

Unmarried Couples Lack Important Legal Protections

If you’re planning on getting married, you’re probably not planning on breaking up — but you might. And if you don’t wind up walking down the aisle, a shared property can become a legal minefield.

“The laws that require an equitable division of assets during a divorce are practically nonexistent for unmarried couples who break up,” according to Quicken Loans.

That can make for an ugly and financially disastrous parting of ways.

“I’ve seen many clients struggle with the absence of legal protections typically afforded to married couples,” Burbank said. “This makes essential legal instruments like cohabitation agreements or property agreements vital to clearly define ownership rights and responsibilities. Without these, each party might face significant legal battles or losses if the relationship dissolves.”

Mismatched Credit and Debt Can Make Borrowing a Challenge

Unmarried buyers can secure a mortgage through either a single or joint application. The latter gives more buying power to couples with two incomes — but only if they have comparable credit histories.

“When it comes to obtaining a loan, mixed credit profiles can lead to complications,” Burbank said. “In my experience, one partner’s poor credit score can adversely affect the couple’s loan terms, increasing interest rates or resulting in loan rejection.”

According to Quicken Loans, lenders approve joint borrowers based on the lower of the pair’s credit scores. That means it could make sense for the better-qualified partner to apply as an individual to secure a better rate — but that diminishes purchasing power and puts all the responsibility on one party while taking property rights away from the other.

“It’s crucial for couples to evaluate their financial standings individually and consider consulting with a financial advisor to understand the best path forward, whether that means improving credit scores before applying, or possibly having one partner apply individually,” Burbank said.

Dividing Equity After a Sale Can Be Challenging

Depending on whether one or both parties secure the loan, unmarried couples can structure ownership rights through sole ownership, joint tenancy or tenancy in common — all of which can spell trouble for one or both people when it comes time to cash out.

“Regarding equity division, my experience has taught me that without marriage, complexities in asset division can escalate quickly when a relationship ends or when deciding to sell the property,” Burbank said. “Drafting a clear, legally enforceable document that outlines each person’s contributions and how proceeds will be divided upon sale can prevent many legal conflicts. This should be done with the assistance of a legal professional to ensure that all parties’ interests are protected.”

Taxes Can Get Complicated and Costly

To Read More:

https://www.yahoo.com/finance/news/m-attorney-why-think-twice-200009159.html