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Auto Loan, Life Events

The First 3 Things You Should Do if You Get in a Car Accident

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3 Steps to Take After You Caused a Car Accident

If you’re a driver, it is likely that over your lifetime you will be in a car accident. Hopefully, that accident only involves injuries to your car and not to you.

The next time you find yourself in a car accident and you’re the offender, follow the tips below.

1. Evaluate the accident scene

Immediately after an accident you should evaluate the accident scene. This means you should pull over right away and call the police. Put your hazard lights on and keep in mind your environment. Be very careful if cars are driving around you that you’re safely to the side. Make sure you’re okay and everyone you’re with is okay. Take note of any injuries that you or anyone else has.

After you’re safe, call the police. Whether the accident is big or small, it’s important that you call the police to the scene right away so there’s a record of the accident.

Approach the person you hit and exchange contact information with him. Get his name, address, and phone number. If you can see his identification, that’s even better, because you can confirm his identity. If there are any witnesses at the scene, you should also get their contact information, too. The more information you have, the better.  This may be done by you directly, or it may be done by the police. If it is done by the police, make sure that you get the information from the police officer, so you have record of it personally.

Take photos of the accident scene, including your vehicle, the vehicle of the person you hit, and any additional photos that could be relevant (like photos of the entire scene to show the exact space and geography of where the accident took place). If shooting a video is possible, consider recording the scene. The more documentation you have, the less opportunity there is for dispute over the scene itself.

2. Watch what you say (don’t admit fault)

While you are evaluating the accident scene and speaking with anyone other than the police, do not talk about how the accident happened or who was at fault. Do not admit that you were at fault and do not make monetary offers to the person you hit. It is tempting to apologize during a highly stressful situation, like a car accident, but it’s to your benefit that you do not say sorry or that it was your fault. Doing this could put you at risk for additional legal liability. Even if you think or know you are at fault, do not admit it.

It’s equally as important not to discuss how you’re feeling. If you say you are completely fine and later you discover you’re injured, it will be harder to prove with statements that you made saying you weren’t injured after the accident. The bottom line is that you should be very careful with what you say at the scene of the accident. Less is more.

When you are speaking with the police, be very clear about what you know happened. If you don’t remember or can’t recall exactly, then say that (don’t try to fill in the blanks).

3. Complete follow up actions after the accident

After you leave the accident scene there are follow up actions you need to take. If you are injured, seek medical attention right away. Even if you don’t start to feel pain until the following day, or some other time after the accident, make sure you get the proper attention you need.

Report the accident to your auto insurance company

Aside from the medical attention, you need to contact your auto insurance company immediately after the car accident and report the accident. As the person who caused the accident, it is your responsibility to report the accident to your insurer. But note that even if the police report puts you at fault, it is your insurance company that will determine whether you’re at fault for insurance purposes. If your insurance company does determine it was your fault, then it is likely that your insurance will be the source of your claim and the victim’s claim. However, your insurance company may fight with the victim’s insurance company or it may decide not to cover the victim’s claims if they are minimal and it’s unclear if you’re at fault. It’s not obvious what will happen because every situation is different. If the insurance company decides you’re at fault, then in most states, your insurance company will handle your medical claims and car repair claims in addition to the victim’s claims.

Keep your own paper trail

Get the name of the agent who is handling your call and who will handle your insurance claim. If you’re given a claim number, make sure to write that down and keep it on file. The more information you document, the better.

Check-in before getting repairs done

Discuss getting your car repaired with your insurance agent. Sometimes, insurers require you to get their permission before getting your car fixed. Be sure to get accurate information from the insurer and note that you can take your car where you want to be repaired – you don’t have to follow the recommendation of the insurance company as to where you take your car. When you get your car fixed, document your repairs and keep your receipts.

Decide if you need to meet with a lawyer

Your final course of action after an accident is to determine whether to pursue legal action or if you need to legally defend yourself based on the victim’s decision. You can meet with an attorney, typically for a consultation at no fee or a very small fee, so do not be deterred from an initial meeting due to fear that it will be expensive. You don’t have to commit to pursuing legal action until after you’ve met with an attorney. So, if you’re unsure about whether to move forward legally, you’re not risking much by meeting with an attorney. The attorney will also be able to advice you on whether your situation is worth pursuing legally.

A Final Note

State law governs the specific rules that will apply to you after you’re in a car accident. Check your state’s laws to determine the specific course of action you need to take. Your insurer should be able to help you with this.

Steps to take if you’re the victim of a car accident. 

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Natalie Bacon
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Natalie Bacon is a writer at MagnifyMoney. You can email Natalie at natalie@magnifymoney.com

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Life Events

3 Things You Should Do When a Car Accident Isn’t Your Fault

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Loss Adjuster Inspecting Car Involved In Accident Crouching Down

If you’re the victim in a car accident, you need to make sure you quickly complete certain actions (and refrain from a few others). While being the victim in a car accident can be stressful and painful, it is important that you take the steps most favorable to you.

Follow the 3 steps below the next time you’re a victim in a car accident.

1. Evaluate the accident scene

You should pull over right away and call the police, keeping in mind your environment and making sure to use your hazard lights. Take enough precaution not to make the accident worse, if possible. Assess whether you’re okay and whether anyone you’re with is injured.

Once you know you’re safe, call the police immediately. Regardless of the size of the accident, it’s important that you call the police. If the car tries to get away, it’s standard advice not to pursue the vehicle. Try to get the license plate information and any other identifiable information. But do not pursue the person.

If the offender does pull over, get out of your car and exchange contact information. Get his name, address, and phone number. Try to get a photo of him or see his drivers license to verify his identity. If you see witnesses, get their contact information, too. The more information you have, the better. This step may be done by you directly, or it may be done by the police if the police arrive quickly. If it is done by the police, make sure that you get the information from the police officer, so you have record of it personally.

Next, it’s important for you to document the scene as much as possible. This includes taking photos of the accident scene (all vehicles involved). Consider recording the scene with your phone, if that’s possible, too. The more documentation you have, the better. You want to minimize the opportunity for the offender to escape blame.

2. Watch what you say (less is more)

While you are evaluating the accident scene and speaking with anyone other than the police, do not say you’re sorry or that you were at fault. It is tempting to apologize during a highly stressful situation, like a car accident, but if you do this and the offender is the person at fault, it will hurt your case against him. Doing this could put you at risk for additional legal liability. Be clear that you think it was the offender’s fault and not yours. Don’t apologize.

Be careful discussing how you’re feeling, too. If you say you are completely fine and later you change your story or feel hurt, it’s harder to prove.

When you are speaking with the police, be very clear about what you know happened. If you don’t remember or can’t recall exactly, then say that (don’t try to fill in the blanks). Similarly, if you aren’t sure if you’re injured, say that. It’s not uncommon for injuries to develop later after an accident but still be because of the accident. For this reason, it’s important that you don’t say you’re 100% okay and not injured, if you think you could be.

3. Complete follow up actions after the accident

After you leave the accident scene there are follow up actions you need to take. If you need immediate medical attention, make sure you seek that first. However, it’s almost as important that you call your insurance company and report the accident. Even if you’re not at fault, it’s good practice to call your insurer to let them know about the accident. If you’re not at fault, they will investigate and determine that, too, for themselves. You can provide your insurer with the appropriate information to determine this (e.g.: the police report).

Insurance companies don’t always agree with police reports

Typically, it is the offender’s responsibility to pay for the victim’s medical claims and vehicle repairs resulting from the accident. It’s possible that the offender’s insurance company could deny your claim if it determines that the offender wasn’t at fault. However, you should still pursue your financial claims through the offender’s coverage. Your insurance company may talk with the offender’s insurance company and determine who is responsible (or they could disagree and fight about it). Note that even if the police report puts the offender at fault, that doesn’t mean that the insurance company will find the same result. The insurance company will do its own investigation. Provide your insurance company with as much information as possible so that you help yourself and show the offender is the person at fault.

Keep a paper trail

Get the name of the agent who is handling your call and who will handle your insurance claim. If you’re given a claim number, make sure to write that down and keep it on file. The more information you document, the better.

Check-in before making repairs

Discuss getting your car repaired with your insurance agent. Sometimes, insurers require you to get their permission before getting your car fixed. Be sure to get accurate information from the insurer and note that you can take your car where you want to be repaired – you don’t have to follow the recommendation of the insurance company as to where you take your car. When you get your car fixed, document your repairs and keep your receipts.

Decide if you want to take legal action

Finally, consider meeting with an attorney to determine what your legal rights are. Typically, an attorney can tell you whether you case is likely to have merit and what the likely fees will be. The attorney will also be able to advice you on whether your situation is worth pursuing legally.

A Final Note

State law governs the specific rules that will apply to you after you’re in a car accident. Check your state’s laws to determine the specific course of action you need to take. Your insurer should be able to help you with this.

Steps to take if you caused the car accident.

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

Natalie Bacon
Natalie Bacon |

Natalie Bacon is a writer at MagnifyMoney. You can email Natalie at natalie@magnifymoney.com

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Life Events

4 Reasons to Have Your Own Life Insurance, Even if it’s Already an Employee Benefit

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

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Your Own Life Insurance

If you work for a company that offers life insurance through a group policy, you may be surprised to find out that there are good reasons to consider getting additional coverage.

Before discussing why you may need additional coverage it’s really important to understand why you need coverage at all. The purpose of life insurance is to protect people who depend on you financially when you die. With adequate coverage, when you die, you can be sure that the people who depend on you have enough money.

According to LIMRA, more than 70 million people know and admit they need more life insurance in the United States. Yet, they aren’t making it a priority.

The scariest part about this is that you jeopardize the financial lives of the people you love the most when you have inadequate coverage.

Consider life insurance planning as part of your overall financial plan and make it a priority. This includes know the reasons why your employer coverage may not be the only coverage you need.

Reason 1: Your Employer’s Coverage May Be Inadequate

Your group life insurance coverage may not provide a large enough death benefits for your dependents when you die.

For example, if your coverage pays out a $50,000 death benefit, and your family would need $1,000,000 to live off without you, then your employer plan would be inadequate and you would need additional coverage.

Understanding how much insurance you need is crucial to knowing how much additional coverage to purchase. There are several approaches to determining how much life insurance you need, so it’s important to talk with a professional to know what’s best for you given your specific family circumstances. Some professionals use an old school model where the rule of “10 times your income” is how much life insurance you should have. Beyond general rules that you can find online, a professional will be able to tell you how much life insurance you need, given your specific circumstances.

Your coverage may fall short in other areas in addition to the death benefit, too. For example, you may want riders on your life insurance plan that you can’t add with an employer plan.

The customization of an employer plan is limited compared to life insurance you can buy on the open market. For this reason, you may find your life insurance coverage through your employer inadequate.

Reason 2: You May be Able to Get a Better Deal Somewhere Else

Your employer provided life insurance coverage may not the best financial decision for you. You may be able to find a better deal by shopping for life insurance through an insurance broker. Not only can you price shop, but you can shop for insurance that fits your needs.

Shopping for a good deal on life insurance now is important. If you wait until you switch jobs, you are giving up time that could work in your favor. For example, if you change jobs in five years, you will likely pay a higher rate for life insurance (assuming you’re in the same health, which is also a risk) than if you got the life insurance policy earlier. Locking in a price now will help you get the best deal you can, regardless of your job status.

Reason 3: Your Insurance is Dependent on Your Job

With employer group life insurance, the coverage only exists so long as you are an employee. If you quit, are laid of, or are fired, you most likely lose your life insurance coverage.

The average employee works at his job for 4.6 years according to the Bureau of Labor Statistics. This means that most people are changing jobs a lot. With each job change, benefits end – life insurance coverage included.

While you may think you can always get life insurance with your next employer, your next employer may not offer life insurance or some other turn of events may happen in your life where you don’t have access to employer life insurance coverage.

Reason 4: If Your Health Changes You Put Your Coverage at Risk

If you get sick or become disabled you put your life insurance coverage at risk. Getting an illness may cause you to have to leave your job, which means you may lose your benefits, including your life insurance coverage. In this case, as opposed to quitting or being fired, your ability to get life insurance somewhere else may be very difficult because it’s hard to get life insurance (if not impossible) in poor health. Life insurance is easiest and cheapest to get the younger and healthier you are.

For example, if you are the sole provider for your family, become disabled, have to leave your job, and die a few years later, you would leave your family without life insurance money after you passed away if you only had employer life insurance coverage because of the years where you lived disabled and unemployed. If you had additional life insurance coverage in place before you became disabled, your loved ones would receive a death benefit regardless of whether you worked in the last years of your life. This is a really important reason to consider shopping for life insurance above and beyond your employer group coverage.

Shopping Young Makes Sense

Life insurance is easiest and cheapest to obtain when you are your youngest and healthiest self. Therefore, it’s really important that you consider your health and your age when you decide how to meet your life insurance needs.

You need life insurance if you have people who would financially suffer if you died. The purpose of life insurance is to protect your loved ones financially when you’re no longer here. With adequate life insurance coverage you can have confidence that the people who depend on you will have enough money to live without your support.

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

Natalie Bacon
Natalie Bacon |

Natalie Bacon is a writer at MagnifyMoney. You can email Natalie at natalie@magnifymoney.com

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College Students and Recent Grads, Life Events

What Should I Do With My 401(k) When I Change Jobs?

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Finances

When you leave a job where you previously had an employer retirement plan, you have decide what to do with the money in your account.

Option 1: Leave Your Retirement Account with Your Employer

Reasons to leave your money in the current account

You don’t have to do anything: Leaving your money with your previous employer’s plan means that you take no action, so it’s easy and you can’t mess anything up.

Might have lower price point: Your 401(k) is institutionally priced, meaning it has access to institutional funds, which are usually cheaper (compared to an IRA).

Help from a financial expert: You have access to a money manager with your 401(k), which may help you if you’re inexperienced and want guidance with your investments.

Reasons why it may be best to rollover your 401(k)

Hassle of tracking multiple accounts: If you leave your money in your old plan and open a new plan with your new employer, it may become cumbersome to keep track of all your accounts. It would be easier to have all your accounts in one place.

Keep your goals in mind: If you are rebalancing your overall retirement portfolio for a certain asset allocation, it may become difficult to make sure all of the investments align and are allocated consistently with several accounts.

Risk forgetting an account: You may lose interest and forget about managing this account after you leave the company.

You might not have an option: You have to make sure this is an option because some plans won’t allow you to stay after you leave (it costs them money to administer your account). Typically, you have to have a minimum amount invested in order to remain in the plan.

Option 2: Rollover Your Account to an IRA

The perks of doing a rollover

You can directly transfer money in your old 401(k) to an IRA: This will give you control over your funds in your own personal, individual account. With a direct transfer, the funds move directly from the 401(k) to the IRA, without you touching the money. This is a great way to move your money from an old 401(k) and have control over the account and actively manage your retirement funds.

You may have access to a wider range of investment options: It’s possible your IRA may have more to offer as many 401(k)s have limited investment options compared to an IRA.

You continue to grow your retirement savings: on a tax-deferred basis (just like you were doing in your 401(k)).

IRAs have more flexible withdrawal options: You can access your funds more easily with an IRA compared to 401(k)s (not that you should). For example, you can withdraw up to $10,000 from your IRA for a first-time home purchase.

Reasons a rollover might not be right for you

You need to be proactive: You have to take action to get a rollover completed, which may be a turnoff. You have to know where you want to open an IRA, and you have to be willing to choose your investments. This may feel intimidating and may require more diligence than you’re interested in having.

Consequences of an indirect transfer: If you do an indirect transfer (as opposed to a direct transfer), you will receive a check for 80% of the funds in your account but be required to deposit 100% of the balance. This is because of a 20% withholding requirement for the employer. So, unless you have the additional 20% to make up in cash, you will be in big trouble if you take an indirect transfer.

If bankruptcy is a potential issue: Generally, there is greater protection against creditors for assets in an employer sponsored retirement account than in an IRA (this is not always the case, so read your state law). So, if bankruptcy is an issue, then an employer sponsored plan may be better.

Option 3: Rollover Your Account to a New Employer 401(k)

Reasons to rollover to a new 401(k)

Simplify your life: The benefit to moving your old 401(k) funds to a new employer 401(k) is that it keeps your investments organized and in one place. It will be easier for you to keep track of and manage with one retirement account.

Defer distributions: You may be able to defer taking required minimum distributions if you are still working at your job at age 70 ½. You don’t have the option to defer RMDs with an IRA or old 401(k) (you’re required to take them).

Reasons to keep your old 401(k) separate from your new 401(k)

You might not have a choice: This may not be an option because not all employers accept rollovers from an old plan.

New 401(k) may be limited: You may have more limited investment options with in your new 401(k) than in an IRA. If you want the most flexibility with investment options, then you may want to stick with an IRA.

Limited flexibility: There isn’t much flexibility with respect to withdrawal exceptions, which you have in an IRA.

Strategize before making your decision

Consider your long term investment strategy when making these decisions. If you have many years to save for retirement, you want to do what’s best for you in the long run.

 

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

Natalie Bacon
Natalie Bacon |

Natalie Bacon is a writer at MagnifyMoney. You can email Natalie at natalie@magnifymoney.com

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College Students and Recent Grads, Student Loan ReFi

6 Private Student Loans that Offer a Grace Period

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Graduating college, trying to get a job and figuring out how to navigate adulthood feels overwhelming enough; who wants to throw in making student loan payments? Unfortunately, within six months of graduating college it’s time to start paying back your lenders. It’s common for federal student loans to come with a six-month grace period, but private lenders are not required to offer this buffer time for you to get it together before paying down thousands of dollars in debt. Some, however, are kind enough to extend the courtesy of a grace period.

Which student loans have grace periods?

Most federal loans have a standard six-month grace period (PLUS loans being the exception), and Perkins loans have a standard nine-month grace period.

With private student loans, there is no standard grace period because each private loan is specifically governed by the controlling loan document between the lender and the borrower. You will need to read your specific loan documents to know whether your private loan has a grace period. Or you can call your lender directly and ask.

Private loans that do have grace periods may use the term “interim period” instead of “grace period”, but it’s the same thing (i.e. the time between when you graduate school and when you have to start repaying your loans). Some private lenders may not use a term at all – they may simply say that your loan is due a number of months after graduation.

6 Private loans with a grace period

While your specific private loan agreement will determine whether you have a grace period, there are several lenders that state on their websites that they do offer grace periods in connection with their private student loans.

1.Discover

Discover’s website says:

All Discover Student Loans provide you with a grace period – a period of time when you are not required to make payments. Depending on your loan type, payments are not due until 6 or 9 months after you graduate or your enrollment status drops below half time.

With Discover, if you have an undergraduate private loan, your grace period is six months long. For professional degree private student loans (e.g. law, medical, MBA, etc.) your grace period is nine months long.

If you drop below half-time enrollment, you would also have a grace period of six to nine months (depending on the loan) during which you would not be required to your student loan payments.

2. Citibank

The Citibank website states:

Many Citi loans provide a grace period – a period of time when you are not required to make student loan payments. It starts when you graduate, leave school, or drop your attendance below half time.

Citibank’s website reads almost identically to Discover – it provides a six month grace period of undergraduate private student loans and a nine month grace period for professional degree private student loans. The grace period also begins if your enrollment drops below half-time status.

3. Wells Fargo

Wells Fargo’s website isn’t as clear about grace periods. The Wells Fargo website says:

With most Wells Fargo private student education loans, you start making payments six months after you graduate or leave school, although for some loans like the Wells Fargo Student Loan for Parents and the Wells Fargo Private Consolidation? loan, payments begin once the loan funds have been received.

This is a situation where you want to be very careful reading your loan documents to determine if your private student loan from Wells Fargo does include the six-month grace period. From this statement, it seems like the standard private loan would get a six-month grace period, but it’s not completely clear. For this reason, but sure to ask your lender and read your loan documents.

4. Citizens Bank

The Citizens Bank website states the following:

With our Citizens Bank Student Loan… No principal or interest is due while you are still enrolled at least half-time. Payment begins 6 months after graduation.

Citizens Bank (like Wells Fargo) does not call this period between graduation and repayment a “grace period”, but the website does say that payment begins after a six-month period. Again, this applies to the Citizens Bank Student Loan, so you want to be careful to read your loan documents to see which private loan you have from Citizens Bank and when, in fact, your repayment period begins. Based on this sentence, when you drop below half time and graduate from college, you will have six months before your student loan payments are due.

5. Sallie Mae

The Sallie Mae website says that for the Sallie Mae Undergraduate Smart Option Student Loan® “(p)rincipal and interest payments begin six months after you leave school for all repayment options.” With this particular loan from Sallie Mae, you should have a six month grace period before your loans enter repayment.

6. PNC

The PNC Solution Loan, for undergraduates, graduates, and professionals, has a six month grace period, according it the PNC website. Payments, if deferred during school, will not begin to be due until six months after you graduate.

Will my loan accrue interest during the grace period?

Some loans accrue interest during grace periods, while others do not. Subsidized federal loans will not accrue interest during the grace period. Unsubsidized federal loans and private student loans will accrue interest during the grace period.

How can I minimize the impact of interest?

If you want to avoid your interest from capitalizing, you can make interest payments during your grace period.

The private loans from the lenders listed above, generally, will accrue interest during the grace period. Again, this is a generalization. Your loan documents will govern your specific loan, so be sure to read your agreement and talk with your lender being signing on the dotted line.

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

Natalie Bacon
Natalie Bacon |

Natalie Bacon is a writer at MagnifyMoney. You can email Natalie at natalie@magnifymoney.com

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Life Events, Strategies to Save

3 Things to Know about Vesting for Retirement Funds

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

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When you first signed up for a 401(k) or 403(b), you may have read something about when you’re “fully vested.” At the time, it’s likely you could’ve overlooked this term because you were overwhelmed with all the other financial jargon and having to pick out investments. But it’s important you understand vesting and how it impacts your retirement account.

Vesting is a term used in the financial industry to describe to what extent employees own the retirement funds contributed to by employers.

If your employer does not contribute, then you do not need to worry about vesting because your account only contains your contributions, which are always vested. If there is no employer match at your company, then you can just contribute to other retirement vehicles.

What is retirement vesting?

In retirement, “vesting” refers to when you own your retirement funds outright. You are always 100% vested in your own contributions. However, employers can choose different vesting schedules that encourage employee retention and don’t vest right away.

For example, if you contribute $5,000 to a retirement plan this year, you will be 100% vested, meaning you own the funds and if you leave the company, you still own the $5,000. If you contribute $5,000 to a retirement plan and your employer contributes a 5% match annually that vests on a schedule (not immediately), then you will only own the funds outright that are fully vested. This means that if you leave the company, you only get to take the amount of funds with you that are fully vested. You will forfeit any remaining contributions that are not fully vested when you leave the company.

Types of Vesting

There are three common ways your employer contributions will be vested: immediate, graded or cliff.

Immediate Vesting

Employer funds are matched either immediately or over time. When they are matched and vest immediately, you are 100% vested and vesting really isn’t an issue. This is considered immediate vesting. Remember that any funds you contribute are always 100% vested. It is only employer contributions that can vest on a schedule.

When vesting occurs on a schedule, you don’t own the funds until they vest, which means that if you leave the company, you leave your funds behind.

Graded Vesting

Graded vesting means that you own your employer matched contributions in a percentage over time. For example, you may be 0% invested in year one, 20% invested in year two, and so on until year six when you are 100% invested. This means that if you leave the company in year three, you only get to keep the match that is vested, which would be 40% of employer contributions. This type of vesting is meant to encourage employee retention by rewarding you if you stay with the company.

Cliff Vesting

Cliff vesting means that you own 100% of your retirement funds at some point in the future (compared to graded vesting that occurs partially over time). With cliff vesting, you may be awarded an employer match right away and not be vested until being there for three years. You may earn the funds in year one, but not be entitled to them until year three.

Determining how your retirement plan vests

You can find out how your retirement plan vests in a few different ways. For starters, you can contact your human resources department or office manger and they should be able to tell you.

You can also call the company that has custody of your account and ask. For example, if your retirement account is held by Fidelity, you can call Fidelity and ask a representative how your accounts vests. This information should also be available in your account dashboard.

A final way to get this information is in the Summary Plan Description that you should receive from your employer for your retirement plan.

With many different ways to find this information out, it should not be difficult and should be widely known in the company how vesting occurs in the retirement plan.

What happens when you leave your company?

If you leave your company before the employer contributions in your retirement account are fully vested and return to the company later, you may be able to count your prior years of service for vesting purposes. The rules are detailed, so always read your retirement account documents with respect to vesting.

When you leave your company, the retirement funds will typically be allowed to stay in that fund with your former employer (but not always). This is something you should find out about your specific plan. Alternatively, you can roll over your employer sponsored retirement plan into a personal IRA (investment retirement account/arrangement) or into your new employer’s plan. Both of these options, when done correctly, should avoid taxes and penalties.

With respect to vesting, when you leave your company, you will not be able to take any funds with you that have been granted but are not vested. If you leave after three years and your employer match does not fully vest for six years, then you can only take with you the amount that is fully vested (e.g. 40% of your employer match after three years). Employer contributions that vest on a schedule encourage employee retention and for this reason it rewards people who stay and punishes people who leave.

Don’t miss out on an employer match

The most important points to remember with respect to vesting are: 1) your retirement contributions are always 100% vested; 2) employer contributions may vest immediately, on a graded schedule, or on a cliff schedule; 3) if you leave your firm before your employer match is fully vested, you will leave money on the table; and 4) vesting is different at each company so make sure you find out how your specific plan works.

If you haven’t set up a 401(k) at all, but you know that you get an employer match, then be sure to set up an appointment with HR to start saving for your future self even if you are struggling with student loans.

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

Natalie Bacon
Natalie Bacon |

Natalie Bacon is a writer at MagnifyMoney. You can email Natalie at natalie@magnifymoney.com

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Banking Apps, Reviews

Does Mint.com Fit All Your Budgeting App Needs?

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

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All Your Budgeting App

There are so many online financial tools in 2016 that it’s hard to keep track of all of them. One of the most widely known tools is Mint.com. Started in 2006, Mint.com now has over 16 million users.

What is Mint.com?

Mint Budgeting
Mint.com is a website that provides you with an online software for 1) budgeting, 2) setting financial goals and 3) credit score reporting.

Budgeting: Through Mint.com’s budgeting software, you can connect their bank accounts, loans, credit cards, and other financial accounts, and Mint.com will track all transactions from the accounts (i.e. spending). Not only does Mint.com track spending and saving, but you can also see all transactions in charts and graphs, which makes visualizing budgets easier.

Goal Setting: You can set financial goals, and Mint.com will show the progress over time.

Credit Score Monitoring: Mint.com shows you your credit right on the dashboard of your account. While this is a credit score based off the Equifax credit-scoring model, it is still a credit score nonetheless and likely a close estimate to your FICO score.

How does Mint.com work?

After you signup for an account with Mint.com, you can connect your financial accounts very easily by entering in your financial account information (usernames and passwords). Your accounts will sync with Mint.com and your data will be updated automatically each time you log in to Mint.com. For these reasons, Mint.com is very user friendly and easy to use.

What security features does Mint.com offer?

To use Mint.com, you must provide their names and login information for all of the accounts that they will link to Mint.com. According to its website, Mint.com keeps login information “stored securely in a separate database using multi-layered hardware and software encryption to protect users” (read more about Mint.com’s security here).

Mint.com requires a two-step authentication before allowing you to access your account. This means that when you try to log in, they will first be asked to verify their identity through email or text messages.

Who is Mint.com best for?

Mint.com is best for you if you are just starting to budget, you want to have software do most of the work for you (versus paper budgets), and you want access to your information on mobile friendly devices.

Mint.com is great if you are a beginner who needs to get organized and if you are learning how to manage money and want to create a budget to track spending and meet financial goals. The web-design and features make Mint.com simple to use on any device, which means financial information is easily accessible on mobile devices.

What does Mint.com cost?

You can signup for Mint.com for free and continue to use Mint.com completely free of any charges.

Mint.com makes money not through users paying for the service, but through offering users financial products for which Mint.com gets a referral fee. So, you can use Mint.com completely free and clear, but you will find advertisements and offerings of financial products throughout the software. Be aware that products pushed to you on Mint are based on the fact the company gets a referral fee, so it doesn’t necessarily mean the product is the best fit for you.

What are the pros and cons of using Mint.com?

If you are deciding whether to use Mint.com, consider the following pros and cons.

Pros

  • Simple to use.
  • Goal-setting tools provided to help you meet your goals.
  • Provides a complete budgeting software system that links all accounts.
  • It’s completely free.
  • You have access to a free credit score.
  • You can visualize their saving and spending through graphs and charts.

Cons

  • Mint.com has a lot of advertisements and aims to get you to buy financial products, which may or may not be the best fit for you.
  • For advanced investors or budgeting experts, Mint.com may be too basic. There is no trading or actual investing through Mint.com.
  • Like any online tool, there is always a security risk of a hack and your data being compromised.

How does Mint Stack up Against the Competition?

Mint.com is not the only web-based program that offers budgeting. LevelMoney, EveryDollar, and Personal Capital are three alternatives to Mint.com.

Level Money
Level Money is a simple program that makes budgeting very easy (by categorizing your spending as income, bills, save, and spendable). Level Money gives you a dollar amount that you can spend per day (this is helpful if you’re a big spender). Unlike Mint.com, which gives you a complete overview of your finances at any given time, Level Money aims to help you control your money and spend less. It’s like a moral compass for your money.

EveryDollar
EveryDollar is a budgeting software system developed by Dave Ramsey’s team that allows users to track saving and spending under the zero sum budget strategy. Budgeting in EveryDollar is super fast and easy (even easier than Mint.com), but it costs. If you want the ability to link all your accounts to the app like you can with Mint, then you’ll need to pay $99 annually. There is less clicking and refreshing – everything you need to complete your budget is done on one page. However, EveryDollar doesn’t have the graphs and charts that Mint.com does with respect to reporting on your historical spending. For that reason, if you would like a more in depth tool, Mint.com may be better.

Personal Capital
Personal Capital is similar to Mint.com with the additional feature of actual investing and no advertisements. You can actually invest your money with Personal Capital, unlike with Mint.com (read more about Personal Capital here). Otherwise, the features of Mint.com and Personal Capital are very similar – both use charts and graphs to show your financial snapshot and historical spending. One feature about Personal Capital that is nice is that it doesn’t have any advertisements because it makes money through people paying them for their services (i.e. investing with them). However, both services are free to use, so you can’t go wrong with either.

Should You Use Mint.com?

You should decide whether to use Mint.com by identifying whether it will help you.

Ask yourself the following questions to help you decide weather to use Mint.com.

  1. Are you just getting started budgeting?
  2. Do you need an online tool to help you track your saving and spending?
  3. Do you need encouragement and tracking software to achieve financial goals?
  4. Do you wish you had access to a free credit score?

If the answer is yes to these questions, then Mint.com may be a valuable tool for you to use. The bonus is that Mint.com is completely free and you can deactivate it at any time.

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

Natalie Bacon
Natalie Bacon |

Natalie Bacon is a writer at MagnifyMoney. You can email Natalie at natalie@magnifymoney.com

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Credit Cards, Identity Theft Protection

When Banks Can Refuse to Refund Fraudulent Debit Card Charges

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

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ATM

Typically, debit cards that are used as “credit” are offered the same protections as credit cards. This means that if you use your debit card in a store and choose “credit” instead of entering your PIN number, you should receive the same protections as if you used an actual credit card. However, we do encourage you to double check the fine print your bank provides on this matter before assuming your debit card will receive those protections.

But here’s a scenario where your debit card is riskier than your credit card. If you withdrawal money at an ATM (or any store doing cash back) using your PIN number, you have additional risk. If someone steals your pin number with a skimming device at an ATM, then he has direct access to your money. This isn’t like credit card fraud with obnoxious charges you need to dispute. This is your hard-earned cash being taken directly out of your checking account. And if you aren’t careful, you might not be able to recoup your losses.

So, what can you expect if you are a victim of debit card fraud?

Timeline for Being Able to Get Your Money Back

If you are a victim of debit card fraud, you are responsible for the following:

  • $0 if you report the loss or fraud immediately and the card has not been used,
  • Up to $50 if you notify your bank within 48 hours of your lost or stolen card,
  • Up to $500 if you notify the bank with 48 hours and 60 days of your lost or stolen card, and
  • All of the fraudulent charges if you don’t notify the bank until after 60 days.

It’s important you don’t delay in reporting the fraud to your bank if you want to be able to get all of your money back. If you were the victim of theft because the crook skimmed your info and used your PIN, then you may be on the hook for the $50 because you couldn’t report to the bank before the card was used. You didn’t know it had happened until the strange transaction showed up!

It may seem unfair to be responsible for charges that you did not actually charge yourself, but to avoid that scenario and protect yourself, consider taking the following precautionary actions.

What You Can Do To Protect Yourself

To protect yourself against debit card fraud, you should do the following:

  • Only use an ATM inside a bank (this will lesson the likelihood that a scanner is on an ATM)
  • Cover your hand when you type your pin into an ATM (to protect yourself against any devices attached to the ATM from getting your PIN)
  • Set up text alerts for each transaction over $0.01 on your card. This way you’ll be immediately alerted if a bogus charge is made
  • Monitor your bank on a regular basis (so you can give notice of fraud immediately)
  • Report stolen funds immediately (so you’re not responsible for the charges)
  • Check-in annually with your bank as to the policies regarding debit card theft (know whether your debit card is specifically protected and to what extent)

While you can notify the bank by phone, it is best to get everything in writing. For purposes of the time requirement, notice is considered given when you put the letter in the mail. It’s even better if you send the mail certified. You can, of course, send notice by mail and call. Whatever you do, keep a record of your communications you have with the bank. This will put you in the best position if you have to escalate your problem.

Remember that if you take the actions listed above, you will be more protected than you otherwise would. Even if you didn’t do anything wrong, like in the example above, you can still find yourself stuck with fraud charges that your bank won’t reverse. These specific steps will help you protect yourself, even when you’re not at fault. This is particularly important if you use your debit card frequently.

Don’t want to use a credit card? Learn how to survive with just debit cards here. 

Debit vs. Credit: How to Decide

Using a debit card forces you to keep your spending in check because you cannot spend more than you have in the bank. However, it may be riskier than using a credit card for the reasons described above. If you’re not sure which is best for you, ask yourself what do you value more – your spending being limited or the additional protections from fraud. If you can control your spending, then you may be better off with a credit card. If you are a spender, however, then take the additional steps listed above to make sure you fully understand your specific liability in the event of debit card fraud. If you feel your bank is behaving unethically and should be refunding you, then reach out to the Consumer Financial Protection Bureau to file a complaint.

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

Natalie Bacon
Natalie Bacon |

Natalie Bacon is a writer at MagnifyMoney. You can email Natalie at natalie@magnifymoney.com

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Pay Down My Debt, Student Loan ReFi

The Presidential Candidates’ Plans to Tackle Student Loans

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mortar board cash

The candidates for the 2016 Presidential Election have very different stances on student loan debt. For the democrats, it’s a choice between Hillary Clinton and Bernie Sanders, while the republicans are choosing between Donald Trump, Marco Rubio and Ted Cruz.

Here’s a look at how the candidates match up.

DEMOCRATS

Hillary Clinton

Hillary Clinton is committed to changing the way student loans work. Her emphasis on education is evident from her plan listed on her website. Specifically, Clinton says on her campaign website that she plans to:

  • Ensure no student has to borrow to pay for tuition, books, or fees to attend a four-year public college in their state,
  • Enable Americans with existing student loan debt to refinance at current rates, and
  • Hold colleges and universities accountable for controlling costs and making tuition affordable.

Additionally, Clinton says that she wants to consolidate the four income based repayment programs into one plan, set at paying no more than 10% of income for everyone. Finally, Clinton plans to drastically cut interest rates on undergraduate loans, specifically. Read more about these plans here.

What it Will Cost: Clinton’s education reform will cost $350 billion.

How it Will be Paid For: Clinton intends to pay for her college education plan by cutting tax deductions for the wealthiest people.

What the Critics Say: Republicans don’t want to cut tax deductions and pay for this. It’s unfair to have wealthy people fund education for everyone. Marco Rubio called Clinton’s plan “Obamacare for College” (read more here).

Bernie Sanders

Bernie Sanders addresses student loans and college funding head-on. He lists the following six steps campaign website that he plans to implement if he becomes President:

  1. Make tuition free at public colleges and universities.
  2. Stop the Federal Government from making a profit on student loans.
  3. Substantially cut student loan interest rates.
  4. Allow Americans to refinance student loans at today’s low interest rates.
  5. Allow students to use need-based financial aid and work study programs to make college debt free.
  6. Fully pay for college by imposing a tax on Wall Street speculators.

What it Will Cost: Sanders’ campaign estimates that his plan would cost approximately $70 billion per year.

How it Will be Paid For: Sanders plans to pay for his college education plan by taxing Wall Street speculators (on the Federal side). States would also be responsible for contributing.

What Critics Say: Critics argue that this plan costs too much money and puts too much pressure on the Federal government. This plan is compared to Medcaid in that it would require great help from both the states and the Federal government in a way that is not sustainable long term (especially because some people can afford to pay for college). Furthermore, critics argue that free public college puts greater pressure on private colleges that will be unlikely to compete with free tuition. Ultimately, the price of free college would fall on the taxpayers.

REPUBLICANS

Donald Trump

Donald Trump does not take an official position on student loan debt or education financing. There is one interview that Trump gave with The Hill where he said “That’s probably one of the only things the government shouldn’t make money off — I think it’s terrible that one of the only profit centers we have is student loans.”

With so much grandiosity and banter, it is difficult to say what Trump would do with respect to student loans at this point.

Marco Rubio

Marco Rubio says that he plans to do the following with respect to college education:

  • Simplify existing incentives to help students pursue higher education,
  • Equip students and families with information necessary to make informed college decisions,
  • Reduce the burden of student loan debt by establishing automatic income-based repayment,
  • Reform outdated accreditation system to accommodate non-traditional education,
  • Invest in student success, and
  • Modernize higher education system to fit 21st century economy.

On his campaign website, Rubio says that “[d]emocrats’ approach to fixing higher education is the same one that has been tried in Washington for decades: raise taxes and pour more money into the current outdated system rather than take the initiative to modernize it.” Instead, Rubio believes his plan will fix the education system. Rubio also believes that student should be able to get investors to pay for their college educations by promising a portion of their income after graduation, called “Student Investment Plans” (read more here).

What Critics Say: Critics of Rubio say that the accreditation system is already too loose in the United States, and Rubio’s plan would lead to predatory for-profit colleges. Additionally, his plan to have investors pay for college at the expense of students’ incomes doesn’t solve the education-funding problem and at best is unfair because it will only help people who want to go into professions that are high earning careers (no help for teachers, for example).

Ted Cruz

Ted Cruz does not take an official position on student loans or college funding. Last year, he voted against a student loan refinancing bill, which we can take as a big hint that he would be less pro-borrower as his democratic counterparts. Cruz has commented on paying off his $100k student loan debt bill, but he has made that an attempt to relate to the middle class more than an attempt to tackle student loan debt.

Plans are Bound to Change

Hillary Clinton, Bernie Sanders, Donald Trump, Marco Rubio and Ted Cruz each have different opinions and plans for reforming student loan debt and education funding if he or she is elected president. While some of the candidates have specific plans laid out, others barely touch on the issue. As the election approaches, time will tell whether these candidates further develop their plans for education reform and the crippling student loan debt in the United States.

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

Natalie Bacon
Natalie Bacon |

Natalie Bacon is a writer at MagnifyMoney. You can email Natalie at natalie@magnifymoney.com

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Consumer Watchdog, Life Events

Tax Refund Advance: Why You Should Avoid It

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

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Tax return checkA tax refund advance is just what it sounds like – an advance on your tax refund. Sometimes it is called a Refund Anticipation Loan (RAL) or Refund Anticipation Checks (RAC).

With a tax refund advance, a lender loans you money (“advances”) that you will repay in exchange for a fee. The amount of the loan is based on what you believe your tax refund to be.

Tax refund advances provide people who are short on cash with money until they receive their refund. A tax refund advance is a short-term loan. However, you should think of tax refund advances as payday loans for tax returns. Not great.

Why You Should Avoid Tax Refund Advances

If someone wants a tax refund advance it is because he needs cash fast – faster than the IRS can get it to him.

The problem with tax advance refunds is that usually the fees are outrageously high and the interest charged on the loan is triple what it would normally be for a loan. And just like any other loan, the full amount must be repaid – even if the refund is lower than expected.

While the actual fees and interest rates vary widely from lender to lender, you can expect to pay too much (e.g.: 10% interest rate and $100 fee for a $1,000 refund, at best).

Ultimately the cost of getting a tax refund advance is too high. Not only that, but lenders prey on people with low incomes who are likely to really need the money and may not be aware as to why these loans are not in their best interest.

The people who need the money the most, end up paying steep rates for it (in fees and interest). One company, listed below, even has their service offered at IRS.com (notice the .com and the real IRS is not a company and the website is actually at .gov). It’s sleazy.

Examples of Companies That Offer Tax Refund Advances

There are a growing number of companies that offer tax refund advances or similar options such as a line of credit based on your return. Examples of companies that offer this service include:

  1. US Tax Center at IRS.com
  2. Income Tax Advances
  3. H&R Block
  4. TaxAdvance.com

You can see from the list above that some companies exist exclusively for the purpose of issuing tax advances (like TaxAndvance.com), while other companies include it is a feature with other services (H&R Block’s line of credit with Emerald Advance).

Regardless of where you get the tax refund advance from, you are getting the same product – a high fee loan in exchange for your tax refund early.

Other Options to Meet Your Financial Needs

Instead of signing up for a tax refund anticipation advance, tax payers should consider taking steps that make it less likely they would need this service.

For example, e-filing is one way to ensure you get your tax refund as fast as possible. With e-filing, you can request a direct deposit of your refund into a checking or savings accounts, which typically takes between 10 and 21 days (for state and federal refunds, respectively). E-filing is a much faster way to file than when tax payers had to file their taxes using standard mail, which use to take weeks or months to get your return. E-filing helps eliminate the long waiting period that once was.

Another way to avoid needing a tax advance refund is to start a $1,000 emergency fund. Starting a small emergency fund (of about $1,000) will give you extra buffer and financial margin. This small emergency fund can help you avoid needing an advance during tax season.

If you need money in a pinch before your tax refund arrives, then consider using a personal loan or possibly even a credit card if you could afford the minimum payment until your refund is delivered and then pay off the entire bill. Carrying debt on a credit card gets extremely expensive, so you should always aim to pay it off on time and in full.

If you are having a tax professional prepare your taxes, you may be able to pay him by having his fees taken out of your refund. Not all preparers do this, but it is a common way to pay for tax preparation services. Check with your tax preparer to see if this is an option for you if you are having trouble coming up with the cash to pay for the service.

Finally, consider adjusting your withholdings with your employer. If you are getting a tax refund it means that you over-withheld (i.e. your employer withheld too much from your paycheck). If you increase your exemptions, your employer won’t withhold as much. This may get you closer to not receiving a refund at all. This would be ideal because then you aren’t paying more than you owe. You would have more money each paycheck, too. Of course, it is best to consult a tax professional before making any changes, but this may be a good option for you.

The bottom line is that you should find a way to avoid taking out a tax refund advance because you are likely to pay too much for such a short-term loan and the risk is avoidable through saving ahead of time, filing electronically, paying for tax preparation fees out of your refund, and adjusting your withholdings. Don’t let these lenders get the best of you – avoid the tax refund advance loan just like you would avoid a payday lender.

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

Natalie Bacon
Natalie Bacon |

Natalie Bacon is a writer at MagnifyMoney. You can email Natalie at natalie@magnifymoney.com

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