Stay up to date with personal finance data in 2013

I no longer just say information is power. It’s only powerful if it’s the right and most up-to-date information. As we start off the new year, I thought I would give you a roundup of some personal finance information you should keep your eye on. I also want to point out personal finance highlights from 2012.

Credit reports. This month the Federal Trade Commission is expected to release a national study on the accuracy of credit reports. Errors in credit reports can cause consumers to be denied credit or other benefits. The credit reporting industry has maintained that only a small percentage of credit reports contain serious-enough errors to cause harm to consumers. This report will provide an independent look at just how accurate credit reports are.

Social Security. Look for a number of changes in this benefit program. For some, the news is good. But for others, not so much. There’s good news for the nearly 62 million Americans receiving monthly Social Security and Supplemental Security Income benefits. They will see an increase of 1.7 percent this year, according to the Social Security Administration. It’s a modest increase compared to the 3.6 percent cost-of-living increase received last year. There was no cost-of-living adjustment the previous two years. High-earning individuals won’t be rejoicing in 2013. That’s because the maximum amount of earnings subject to the Social Security tax will increase from $110,100 to $113,700. Of the estimated 163 million workers who will pay Social Security taxes in 2013, nearly 10 million will pay higher taxes as a result of the increase in the taxable maximum. One final thing. By March, everyone getting Social Security benefit payments by paper check will need to sign up for electronic payments. If you don’t choose an electronic payment option before the deadline, you’ll receive your money on a debit card.

Medical and dental expenses. If you itemize for tax purposes, you can deduct expenses you paid for unreimbursed medical and dental care for yourself, your spouse and your dependents. But you can only deduct expenses for the year that exceed a certain percentage of your adjusted gross income. For tax year 2012, it was 7.5 percent. For tax years beginning after 2012, the percentage benchmark jumps to 10 percent.

The Mortgage Debt Relief Act. If you borrow money and the lender then cancels or forgives the debt, you generally have to include the canceled amount as income for tax purposes. At the height of the housing crisis, when foreclosures across the country began a troubling increase, Congress passed a law designed to provide some tax relief to folks who had lost their homes. The Mortgage Debt Relief Act allowed people to exclude from income the discharge of debt on their principal place of residence. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualified for the relief. But the law only allowed debt forgiven in calendar years 2007 through 2012 to be excluded. Unless Congress acts, the tax break will no longer be allowed.

Improved transparency. Starting in 2012 but continuing this year will be improved information for consumers. Last year, the Department of Education and the Consumer Financial Protection Bureau pushed colleges to provide better information on what students and their families will pay. The watchdog agency also opened a student loan complaint system and one to handle individual complaints about credit bureaus. For information on any of these issues, go to www.consumerfinance.gov.

And most notably, people participating in workplace retirement plans are now going to receive better information about the fees they pay. New disclosure rules implemented last year by the Labor Department should help workers and the companies that provide retirement plans understand the fees charged to, or deducted from, individual accounts. If you have a 401(k) or similar plan, you should have begun receiving detailed information tied directly to the fees you have paid.

So in 2013, you should get a full year’s worth of detailed fee information. When you get the information, don’t ignore it. Review it. Fees typically run 0.5 to 2 percent a year. AARP has posted a video on YouTube to help you understand why fees matter. Search for “Understanding 401(k) Fees.” As you review the fee information, compare it with the various investment offerings in your retirement plan. To assess your company’s plan, go to www.brightscope.com, where you can find and research the quality of your 401(k) or 403(b) plan.

Personal finance can be complicated. So resolve in 2013 to stay informed.

(c) 2013, Washington Post Writers Group

More in Herald Business Journal

Tulalips break ground on new Quil Ceda Creek Casino Hotel

A 150-room hotel was added to what is now a $140 million complex expected to open in spring 2019.

For modern women, 98-year-old rejection letters still sting

In a stark new video, female Boeing engineers break the silence about past inopportunity.

Angel of the Winds pays $3.4M for Everett arena naming rights

The casino replaces Xfinity as the lead sponsor for the publicly owned downtown Everett events center.

Teddy, an English bulldog, models Zentek Clothing’s heat regulating dog jacket. (Ian Terry / The Herald)
Everett clothing company keeps your dog cool and stylish

Zentek uses space-age fabrics to moderate the temperature of pets and now humans.

Providence Hospital in Everett at sunset Monday night. Officials Providence St. Joseph Health Ascension Health reportedly are discussing a merger that would create a chain of hospitals, including Providence Regional Medical Center Everett, plus clinics and medical care centers in 26 states spanning both coasts. (Kevin Clark / The Daily Herald)
Merger would make Providence part of health care behemoth

Providence St. Joseph Health and Ascension Health are said to be talking. Swedish would also be affected.

Bombardier promotes its C Series airliner as American made

It says more than half its all-new jet is made in US factories with final assembly near Montreal.

Everett engineers learn lessons from Mexico City catastrophe

Structural scientists went to help after the September earthquake there and studied the damage.

Airports want to nearly double passengers’ user fees

Delta says airports will rake in $3.6 billion in passenger facility charge taxes this year.

UPS delays mount as online shopping hobbles courier’s network

FedEx completed 97.1 percent of its ground deliveries on time in the same period.

Most Read