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  • 10/23/15--22:00: 4 Investing Rules to Live By
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    business man hand holding a...
    Shutterstock
    By Kathy Kristof

    1. Diversify. Stocks, bonds, cash, real estate and other investments provide varying rewards: Some protect against inflation, and others provide the growth or income you might need for specific goals. Plus, their prices move at different speeds and, sometimes, in opposite directions. Owning something in each investment category allows you to take reasonable risks without producing unreasonable volatility for your portfolio. Likewise, you should diversify within each category.

    2. Rebalance. The normal (and sometimes abnormal) moves of any given investment category can derail your well-thought-out plans if you fail to rebalance regularly. Rebalancing requires nothing more complicated than reviewing your investments annually to make sure that the percentages you hold in each investment class (and sometimes in each specific investment) have not strayed wildly from your original goals. Then, you sell investments that have performed relatively well and use the proceeds to invest in relative laggards.

    3. Dollar-cost average. Another simple and effective way to buy low is to put your investments on autopilot by subscribing to a dollar-cost-averaging plan. Dollar-cost averaging simply means that you invest the same amount of money in the same investments on a regular basis. If you're contributing to a 401(k) plan, you're already practicing dollar-cost averaging. If you receive a windfall, averaging keeps you from putting all of your money into an investment at an inopportune time and forces you to bravely keep buying even if the market tumbles.

    4. Keep costs down. It's hard to gauge ahead of time what your investments will earn. But investment costs are something you know in advance and can control. For starters, you can save money on brokerage commissions by using an online discount broker, such as Fidelity, E-Trade (ETFC), Schwab (SCHW) or TD Ameritrade (AMTD). If you're okay with just earning a market's return, buy index mutual funds from firms such as Vanguard and Fidelity; many of their index funds charge just 0.1 percent or so a year. If you prefer active management, give extra credit to funds with below-average fees. The Kiplinger 25, the list of our favorite mutual funds, is a good place to start.

     

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    DIY Home Security

    By Marilyn Lewis

    How secure is your castle?

    If you are unsure, there is some good news: There are several easy, no-tech ways to improve your home's security for free, or next to nothing.

    Remember, the most effective improvements are the ones that persuade a burglar to move on to the next guy's home.

    1. Enlist local police. Local police departments typically will send a trained officer to your home to do a walk-through with you, pointing out your vulnerabilities and suggesting simple fixes.

    Also, check your police department's website for crime statistics and tips. For example, here is the Los Angeles Police Department's detailed list of home-security tips for residents.

    Finally, remember to alert police when you'll be out of town so they can keep a watch over your home.

    2. Chat up the neighbors. Join the local Neighborhood Watch program or start one. Chatting with neighbors updates you on local crime problems and enlists allies who'll watch your home while you're away. Neighbors are terrific watchdogs.

    3. Use your locks. Even if your neighborhood feels safe, make locking up a habit. Burglars often test a home by knocking on a door and, if no one answers, opening it. Keep every exterior door and window locked, including the door between the garage and house.

    4. Pretend you have a dog. Getting a dog is a great security move. But if you can't, pretend to have one. Buy a couple of "Beware of Dog" signs at a hardware store and put them up. When a stranger is at the door, make a show of putting the "dog" in the other room before you open the door.

    5. Keep your home looking theft-proof. Appearances count, especially when you are trying to keep burglars away. So keep your place looking lived in. Rotate lights on timers when you're gone. Ask the post office to hold your mail, reschedule expected deliveries, and get friends to drop by randomly to water plants or just walk around.

    Also, make cosmetic changes to your home that will deter thieves. Remember that bushy trees and shrubs provide cover for bad deeds. Keep the foliage well-trimmed. Paste a local security company's sticker on your front window.

    6. Use your head. Don't open the door -- and don't let kids open the door -- to uninvited strangers. Stay home when workers are in or around your home.

    Don't put keys in obvious places like fake rocks and under pots and doormats. Train children (especially teens) to keep key locations, alarm codes and other family security information private from their friends.

    Have you tried installing any of these or other improvements in your home? Sound off in our Forums. It's the place where you can speak your mind, explore topics in-depth, and post questions and get answers.

    Like this article? Sign up for our newsletter and we'll send you a regular digest of our newest stories, full of money saving tips and advice, free!

     

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    Senior Man Using Laptop At Home
    Getty ImagesYour other retirement funds could be affected by the loss of a Social Security COLA.
    By Maryalene LaPonsie

    For only the third time in 40 years, Social Security recipients won't be getting a bump in their monthly benefits.

    Actually, David Leland, a managing director with Merrill Lynch in Boston, says the last eight years have been rough for Social Security beneficiaries. Since 2008, the total of all cost-of-living adjustments, known as COLA, has been 14.3 percent. Those years include all three times when there was no increase in monthly payments.

    For comparison, from 1975 to 1982, the first eight years COLAs were offered, Social Security recipients received increases totaling 69.6 percent.

    Social Security COLAs are tied to the Consumer Price Index, which dropped 0.2 percent in September. In theory, that means the cost-of-living for Americans should be going down slightly as well. However, the price of gasoline weighs heavily into the index calculation, a cost that doesn't affect retirees as much as medical costs which is expected to trend upward by 6.5 percent in 2016, according to PwC's Health Research Institute.

    Leland says it's a perfect storm that has potential to seriously impact people living on a fixed income. "Think of the senior citizen on a tight budget," he says. "They're getting a 0 percent COLA, nearly 0 percent interest on savings and health care expenses are taking off."

    Regardless of whether you have a tight budget, here are three ways the loss of a Social Security COLA might affect you next year.

    1. Your Social Security benefits will remain flat for 2016. The most obvious impact of having no COLA is that Social Security benefits for 2016 will remain the same as the benefits in 2015.

    Willie Schuette, a national Social Security adviser and financial coach with the JL Smith Group in Avon, Ohio, tries to put a positive spin on the situation: "Recipients of Social Security don't have a benefit loss, even though the [Consumer Price Index] has dropped."

    Still, it isn't welcome news for those who may have been planning to use a cost-of-living increase to offset rising medical bills or other expenses. Sharon Miller, a managing director for Merrill Edge, says retirees may be tempted to pull additional money from their other retirement accounts to compensate, but they should exercise caution. "Make sure, as a very general rule, you're not drawing down more than 4 percent of your assets every year," she says.

    Taking too much out of retirement accounts could mean you don't have enough cash to last through your later years.

    2. Your Medicare premiums could go up. The loss of the Social Security COLA also means some Medicare beneficiaries could see their Part B premiums increase 52 percent next year.

    Normally, all Medicare beneficiaries see their premiums increase each year. However, a provision of the law states if there is no Social Security COLA, then premiums cannot be increased for those who have them deducted from their Social Security benefits. That means about 70 percent of Medicare beneficiaries will see their Part B premiums remain at $105 a month next year.

    However, someone has to pay for increasing Medicare costs, and that means the remaining 30 percent of beneficiaries -- those who aren't yet receiving Social Security benefits or who pay their Medicare premiums out-of-pocket -- need to cover the expense. "New recipients into Medicare [next year] are going to bear the brunt of that increase," Schuette says. Their premiums will be $159 a month in 2016.

    You could avoid the increase by applying for Social Security now before the premium increase goes into effect, but financial planners say don't be hasty. "It looks like a one-year event, not a five- or 10-year event," Leland says. "Don't confuse a short-term Medicare decision with a long-term Social Security decision."

    In other words, the Social Security COLA could return in a year, and that will level the playing field for Medicare premiums. In that case, the 70 percent who had flat premiums in 2016 will see their premiums increase in 2017, while the remaining 30 percent could see their premiums drop.

    However, by applying for Social Security now, you could lock in a lower rate of monthly benefits than you would otherwise get. "We're telling people to be very careful," Leland says. "If you change your Social Security election now, it's possible you could cost yourself tens of thousands of dollars later."

    3. Your other retirement funds could be affected. Finally, the loss of a Social Security COLA could impact your other retirement accounts as well. Some pensions may tie their cost-of-living adjustments to the one approved for Social Security.

    Miller says it's not just retirees who should be paying attention to this issue either. "This doesn't only impact people going into retirement," she says. There is speculation the lack of a COLA means the IRS will keep contribution caps on 401(k)s and IRAs the same as this year, limiting workers' ability to save more in tax-advantaged retirement plans.

    While it's possible Congress could step in and find money for a COLA, Schuette says it'd be best to not hold your breath. "[Congress] can do whatever they want," he says, "but they've never come in and added to it [in the past]."

    Unfortunately, the only thing for some retirees to do may be to stay close to home in 2016 and cut expenses wherever they can.

    Maryalene LaPonsie is freelance writer who has been reporting on personal finance, retirement, higher education and insurance for more than seven years. You can connect with her on LinkedIn, circle her on Google Plus or check out her personal website at The Mighty Widow.

     

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    Women window shopping
    Getty Images


    You've been great about saving and not going on a spending spree, but every now and then, it'd be nice to loosen the budget belt a little. Ever feel that way? It's healthy. In fact, some experts say that splurging or spending freely on something you don't need can be good for you.

    Financial expert Kyle Winkfield put it this way:

    "When you splurge responsibly, it's like a successful diet with built-in cheat days. With any great budget that's successful, you build in a splurge. It's your cheat day."

    So, can you cheat with a splurge and not blow your budget completely? If you plan for the splurge with a "fun money" account and stay within your budget limits, it's doable. Everyone has the urge to splurge, especially as the holidays approach. Nevertheless, smart spending is still within your grasp. Read on to find out how to splurge on a budget.

    1. Use Credit Card Rewards

    Using the money you've already spent to buy a little something extra is genius. "If your credit card offers rewards, check your statement and add up the available rewards points," said consumer finance expert and Freedom Financial Network vice president of sales and Phoenix operations, Kevin Gallegos. "Visit the rewards website -- your splurge area -- to see what you can get by converting rewards into gifts, cash or gift cards."

    People with cash-back credit cards typically earn about $25 a month in rewards, estimated one 2010 study. And if you use your card for reimbursed business travel and expenses, you might earn a nice-sized reward for your purchases.

    Especially nice are the cards that offer discounts to your favorite stores, like Chase's Amazon.com Rewards Visa Card. It rewards you 3 percent cash back at Amazon.com. Redeem your points, and you can fund some holiday shopping and pick up a little something extra for yourself, too.

    But don't go into credit card debt by getting a credit card for the sole purpose of earning points; only get a new cash-back credit card if you don't have any credit card debt and you can pay off the monthly balance.

    2. Go Big After a Little Research

    If you've saved your splurge money for a big-ticket item like a TV or laptop, practice smart spending. "You'll be able to score the best deals on major items with good research," Gallegos said. "If you are choosing a high-dollar item, check reputable online review sources like Amazon and CNET. Then, use comparison-shopping sites such as PriceGrabber, Pronto or Shopping.com to find the best online prices. Finally, search for coupon codes online at sites, including RetailMeNot, FatWallet and DiscountCodes."

    Comparison shopping alone can save you significant dollars. PriceBlink, a browser add-on, alerts you as you online shop if there's a lower price available elsewhere on the web. Sites such as Offers.com track product pricing over time, which "can help you decide if the splurge is a good one," said Offer.com's Kerry Sherin. Add a coupon code, and you could save even more on your splurge. Coupon code offers can range from free shipping to 25 percent or more off purchases. For purchases more than $100, that 25 percent can add up to significant savings.

    To really amp up the savings, however, fill your virtual shopping cart with your intended purchase and abandon the sale. Many online retailers will email you a discount offer for the abandoned items to nudge you to make the purchase.

    3. Spend Money on Small Items

    Control the urge to splurge on items you can't afford by buying small items that feel splurge-worthy. "To gain the feeling of purchasing something special, do so on little things," said Gallegos. "Maybe it's purchasing a $5 bar of handmade soap, a small amount of an expensive spice for holiday baking, a top-quality chocolate bar or a craft beer."

    Benjamin Glaser, features editor at DealNews.com, added, "Smaller luxuries can still make a big difference in how you feel. Fine cosmetics, bed linens, good razor blades, and yes, quality toilet paper, are all affordable treats that will leave you feeling like a million bucks."

    When you're working toward achieving long-term budgeting goals, splurging can take a back seat. But buying a little something that makes you feel special can diffuse the feeling of "I never have any fun!" that could lead to a big budget blowout later. Even personal finance guru Dave Ramsey agreed. "When buying stuff that you really need, it's okay to spend a little extra to avoid financial, or even physical, pain in the long run," Ramsey wrote on his blog.

    4. Buy Experiences Instead of Material Things

    Research cited in The Wall Street Journal suggests that people are happier when they spend money on experiences rather than material goods. According to San Francisco State University associate professor Ryan Howell, "people think that experiences are only going to provide temporary happiness, but they actually provide both more happiness and more lasting value."

    An evening with friends, a vacation with family or a date night with a spouse all count as experiential splurges with a high return on happy memories. And, these experiences don't need to derail your budget.

    So, splurge on taking a day off to spend with your family, planning a special holiday dinner with loved ones or attending a concert to see your favorite band. As an added bonus, another study -- this one published in PsychologicalScience.org -- found that just the anticipation of the experience can be more exciting than buying a material item.

    5. Buy at the Right Time

    Many experts say certain months offer better deals on some products. For example, some of the best things to buy in October include air conditioning units, a new car and outdoor equipment. If your practice smart spending and buy your splurge item when it's at its lowest price, you'll probably feel better about spending the money.

    For an everyday example, let's say you're itching to splurge on a fancy homemade dinner. With some pre-planning, you can usually buy what you need to make the meal more without spending a lot and still feel like you're treating yourself. According to TheGroceryGame.com CEO, Teri Gault, holiday sales at grocery stores offer an average of 67 percent savings on steaks, whole rib roasts, shrimp, lobster and champagne. She said December is a great time to stock up on all these items so you'll have them handy year-round for your next meal splurge.

    Sticking to a budget doesn't have to mean you deprive yourself every day. Allow yourself a cheat day every now and then to stay on track. Just plan for your splurge, make it proportional to your budget, don't go on spending sprees, and you'll avoid morning-after regrets and overspending fallout.

    This story, 5 Ways to Splurge on a Budget, originally appeared on GOBankingRates.com.

     

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    Which Debt to Pay: Lowest Balance or Highest Rate?

    By Brandon Ballenger

    The average American household debt is $15,706, and $7,327 of it comes from credit cards alone, Nerdwallet found this year in an analysis of government data and other statistics. About 44 percent of those polled pay off their card balances monthly (good for them!), which leaves the other 56 percent holding some expensive debt.

    Taboo topic. While people have a hard time dealing with debt, they also have a hard time talking about it. A poll by CreditCards.com found that Americans would rather discuss their salary, weight, politics or religion with a stranger. They found the only topic of discussion rivaling debt as a taboo was "details of your love life," with only 19 percent willing to discuss.

    And if people can't talk about debt, maybe that's why research shows most of us take the wrong (or at least more expensive) approach to paying it back -- paying off the smallest accounts first. There's a more cost-effective way to do it, as we'll explain, but both approaches require one common element: motivation. If you aren't going to make consistently paying down debt a priority, you lose out regardless of strategy. So while there is a clear, mathematically correct approach to dealing with debt, it's important to do what works best for you. Here are the two common approaches:

    Prioritizing high-interest accounts. In this model, you make the minimum payment on every debt except the one with the highest interest rate, which is the one costing you the most money over time. For that debt, you throw in whatever you can regularly afford beyond the minimum until it's paid off.

    Once that debt's gone, your debt-paying budget stays the same -- you just shift the higher payment to the debt with the next-highest interest rate, and go on down the line.

    The obvious advantage to this model is you save the most money possible over the long term. The downside: Progress may appear to be slower than it actually is. Having a large number of debts may feel more stressful even though you're paying down the debts in the most effective way to eliminate them.

    Paying off low balances first. As with the first model, you pay the minimum on all but one debt and "snowball" the payments from one debt to the next as they disappear. The difference here is that you focus on the smallest debts, allowing you to knock accounts off the list faster.

    The advantage? Having fewer accounts to juggle feels good. It's a result we can easily see: Balances shifting downward is not as impressive or obvious as a big zero. Some people need that to stay motivated. Unfortunately, this means you're actually making slower progress on your overall debt because those big-interest accounts are accruing.

    New research at Texas A&M University finds that paying off low balances first (described below) may help build motivation, although the subject needs more study, the authors say.

    "[I]ndividuals increase their performance in tedious tasks when those tasks are broken down and put in ascending rather than descending order," they write.

    Is all this hard to visualize? Imagine it this way: You're trying to bail out your sinking ship, but a bunch of creditors are standing behind you with little kiddie beach pails, pouring more water in. While it may feel good to turn and shove those guys off your boat right away, there's a jerk with a huge bucket standing -- and grinning -- at the other end of the ship. You really ought to run and tackle him first.

    How to decide on the best approach. The fact is, the bucket sizes are different for everybody. We all have different situations, with a number of debts of varying sizes and interest rates, and with different income levels. Fortunately, there's a much more concrete way to figure out how to handle debt that works for everybody. Being able to plug your specific numbers in and see how much money you lose by flipping between the two methods can help decide.

    Check out Unbury.me, a clean and easy-to-use calculator that can test both methods with your input. You can add as many loan balances as you want and you'll get back a graph and payment breakdown, along with total interest paid and a debt-free date. You only have to plug the numbers in once, and you can switch between "Avalanche" (high-interest style) and "Snowball" (low-balance style) with one click. Try your numbers and see what makes sense to you.

    Need more debt help? Check out a step-by-step guide to debt strategy, or how to find free or low-cost non-profit credit counseling. Also, Money Talks News has partnered with Debt.com, which offers trustworthy debt management services for a fee. Money Talks News founder Stacy Johnson has written the book on debt ($6 to $11 on Amazon) that's helped hundreds of people. It's called Life or Debt.

    -Marilyn Lewis contributed to this post.

    Like this article? Sign up for our newsletter and we'll send you a regular digest of our newest stories, full of money saving tips and advice, free!

     

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    Greed
    Getty ImagesYou can be happy and frugal at the same time.
    By John Schmoll

    Many people often confuse frugality with being cheap. It's an understandable thought, as their definitions share similarities. Both traits are considered economical. Both want items at a lower price. Both want to use as few resources as possible. The end result in many of these situations is saving money.

    There is, however, a key difference. We all love to save money, but it's the approach taken that makes all the difference. It's this difference that separates someone who is frugal from someone who is considered cheap. So, before you confuse a frugal person with someone who likes to be cheap, take a look at some of the following traits.

    1. Frugal people take a macro-level view of finances. I've found that most frugal individuals often take a big picture view of their money. Yes, they're concerned with what they might spend on a certain item. That's a given for a frugal person. The amount spent isn't the determining factor of the spending decision, however. The determining factor is the value the item will bring into their lives.

    For example, if there is a certain hobby they enjoy, they will spend the money necessary to enjoy that item. They won't cut every corner; they will get value because they'll derive value out of what the item will add to their lives. On the other hand, someone who is cheap will simply look to spend as little money as possible. While understandable, cheapness misses the bigger picture for the sake of saving a few dollars.

    2. Frugal people look at quality. Similar to taking a macro level view of finances, frugal people look for quality. They also realize quality might mean spending a little more to get it. The simple reason is spending a little more, in the beginning, will mean less money spent in the long run. Not only does this desire to spend on quality mean less money spent overall, but it also means less waste -- another hallmark of frugality.

    3. Frugal people don't steal. When was the last time you were at a restaurant and saw someone grab a bunch of extra napkins or sauce packets and thought the person was frugal. We've all seen it happen. Perhaps we've even been guilty of it at times.

    This isn't frugality; it's theft. While it may help you save some money in the long run, it's not worth the hassle or embarrassment to a frugal person. You're betraying your values, which are worth more than money.

    4. Frugal people look at time. A frugal person is keenly aware of the time spent on an item or task. A cheap person, on the other hand, forgets about the aspect of time and looks simply at the money saved. For example, when was the last time you heard someone brag about buying gas for ten cents less a gallon than you did?

    That might sound great, on the surface, until they tell you it took them 20 minutes to drive across town to get the savings. A frugal person sees that 20 minutes and extra few dollars as a waste. They'd rather spend their time on something that brings greater value than chasing savings.

    5. Frugal people splurge on occasion. Splurging on an item sounds like it might be contrary to a frugal mindset. It really isn't. In fact, it's a key part of frugality. Frugality is concerned with value, not being so miserly that you never have anything you want.

    A frugal person is going to order their spending to get something they want, even if it's seemingly expensive. Whether that be a nice vacation, a certain brand name or more expensive and healthier food, a frugal person is going to adjust spending to allow for that splurge.

    The bottom line is that frugal people are not overly worried about money. Frugal people simply want to make money work for them in the best way possible. They want their money to grow. They want to receive quality for their spending. They want more time to do the things they enjoy and they use wisdom to accomplish those things.

    Frugality and cheapness are often confused. That's understandable. Before you confuse frugality with being cheap, look at the kind of life the person is living and the value they're receiving from it.

    John Schmoll is the founder of Frugal Rules, a finance blog that regularly discusses investing, budgeting and frugal living. He is a father, husband and veteran of the financial services industry who's passionate about helping people find freedom through frugality.

     

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    Inside The Microsoft Corp. Windows 10 Devices Event
    John Taggart/Bloomberg via Getty Image
    From the country's largest software developer making another big bet on hardware to the leading premium coffeehouse chain pouring out its latest quarterly results, here are some of the things that will help shape the week that lies ahead on Wall Street.

    Monday -- Beneath the Surface

    Microsoft (MSFT) has seen its once dominant market position in computing challenged in recent years. Folks are shifting to smartphones and tablets, categories in which Microsoft's Windows is a distant third to iOS and Android.

    It hopes to change things with the arrival Monday of Surface Pro 4. The high-end tablet with its slick keyboard aims to eliminate the need for owning both a laptop and an iPad. Access to run Windows 10 means that users can run Office, desktop apps and other Windows programs.

    Some of Microsoft's partners may not like seeing the software giant grow its presence in hardware, but it's the right move. Initial reviews are positive, but save up: Surface Pro 4 starts at $899.

    Tuesday -- An Apple a Day

    We're in the heart of earnings season and that finds the world's most valuable consumer tech company reporting after Tuesday's market close. Apple (AAPL) has a lot to prove. Will it offer up more concrete sales metrics for the Apple Watch line it rolled out earlier this year? How much longer can the iPhone carry the company?

    Apple remains a market darling, but investors will want to make sure that it's succeeding without sacrificing margins.

    Wednesday -- Red Is the New Green for YouTube

    The top site for video clips launches a premium platform Wednesday. YouTube Red is a new membership that lets subscribers enjoy the site without ads. It also allows subscribers to download clips for offline viewing and have access to YouTube Music.

    At $9.99 a month it will be a hard sell for folks who are used to enjoying Alphabet's (GOOG, GOOGL) YouTube for free, but it could succeed with folks wanting a premium experience with extra perks.

    Thursday -- Java Nice Day

    We can get back on track with earnings season Thursday with Starbucks (SBUX) brewing fresh financials. Shares of the top dog in premium coffee hit new all-time highs last week ahead of Thursday's report.

    Things have gone well for Starbucks. It seems as if there's always expansion space for the chain to take up, and store-level sales continue to be positive. Starbucks has turned a simple beverage into a luxury product. You don't see that very often.

    Friday -- Room Service

    Choice Hotels (CHH) wraps up a busy week of earnings reports -- and the last trading day of October -- with its own updated financials. This is the hotelier behind Comfort Inn, EconoLodge, Rodeway Inn and several other value-priced lodging establishments.

    It's a good time to be a hotel operator. The economy's holding up, and that encourages business travel. Gas prices are cheap, and that naturally makes it easier to justify a road trip. Wall Street's ready to check in. Analysts see revenue and earnings per share climbing in the high single digits.

    Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Alphabet (A and C shares), Apple, and Starbucks. The Motley Fool owns shares of Microsoft. Try any of our Foolish newsletter services free for 30 days, and click here to check out our free report for one great stock to buy for 2015 and beyond.

     

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    Earns Fedex
    Mark Lennihan/AP
    By Nick Carey

    CHICAGO -- Package delivery company FedEx (FDX) said Monday that it expects to see a record number of shipments during this year's busy holiday season, driven by rising retail sales and a jump in e-commerce.

    The Memphis-based company said it expects to handle 317 million shipments between Black Friday, traditionally the busiest U.S. shopping day of the year, and Christmas Eve, an increase of 12.4 percent over the previous year.

    "Each year we face a challenge that's greater and that's driven by e-commerce," Patrick Fitzgerald, FedEx senior vice president for integrated marketing and communications told Reuters. "We've learned that planning and preparation is key."

    The National Retail Federation has predicted retail sales in November and December -- excluding automobiles, fuel and restaurant sales -- will increase 3.7 percent to $630.5 billion after a 4.1 percent increase last year. The NRF said online retail sales could increase up to 8 percent, to as much as $105 billion.

    FedEx said that it expects to see three spikes in package volumes during peak season, on Cyber Monday and the first two Mondays in December. The company said its holiday projections are included in its full-year fiscal 2016 earnings guidance of between $10.40 and $10.90 a share.

    The rapid rise of e-commerce poses challenges for retailers and package delivery companies alike. In 2013 bad weather and a late surge in online retail packages caught FedEx and main rival United Parcel Service (UPS) off guard, leaving an estimated 2 million packages undelivered on Christmas Eve, the majority in UPS' network.

    Last year both companies touted investments in their networks and close collaboration with major retailers to manage package flows during the holidays. UPS ended up over-spending to prepare for package volume spikes that didn't materialize, hurting its fourth-quarter earnings. FedEx didn't report any problems.

    This year FedEx has invested $1.6 billion in capacity and automation projects at FedEx Ground to help with peak season.

    FedEx's Fitzgerald said that if retailers come in way above forecast with a sudden surge in packages, the company may "need to cap volumes" in order to protect its network.

     

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    Shutterstock
    Plenty of stocks go up and down in any given week. The gainers inspire us to keep investing. The decliners keep greed in check while reminding us about the risks of the equity markets.

    Let's go over some of last week's best and worst performers.

    Energy Recovery (ERII) -- Up 200 percent last week

    The market's biggest winner was Energy Recovery, tripling in value after striking a lucrative 15-year licensing deal with Schlumberger (SLB). Schlumberger will have exclusive rights to Energy Recovery's VorTeq hydraulic pumping system.

    The deal calls for Energy Recovery to receive $125 million as well as ongoing royalties for the rights. That's a pretty big deal for Energy Recovery, as that was roughly the stock's market cap when the week began.

    Weight Watchers (WTW) -- Up 132 percent last week

    Oprah Winfrey came to the rescue of one of this year's worst performers. Winfrey revealed that she will be taking a 10 percent stake in the diet plan specialist. She will also be taking an active role in promoting the brand, something that is ultimately more important than taking a minority stake in the company. Winfrey's influence is obvious and she can certainly help a brand that really needs it.

    Revenue has been sliding at the company. Folks pay an average of $377 a year to Weight Watchers, and that's hard to justify in a world where fitness apps and websites offer cheaper ways to encourage active lifestyles and healthy eating. If anyone can help turn things around, it's probably Winfrey.

    Higher One (ONE) -- Up 33 percent last week

    An asset sale helped push shares of Higher One higher. It agreed to sell its Campus Labs data analytics business in a $91 million deal. Higher One has fallen out of favor since its days as a market darling when it revolutionized personal finance on college campuses. Unloading a subsidiary isn't going to help its overall business, but unlocking the value always helps.

    Pandora Media (P) -- Down 38 percent last week

    The market turned down the volume on Pandora after the streaming music pioneer posted a problematic quarterly report. Usage is slipping. There may be a whopping 78.1 million active listeners relying on Pandora for music, but that's below the 79.4 million active listeners that it had on its rolls just three months earlier. The number of hours of content served also slipped sequentially to 5.14 billion from 5.3 billion.

    The launch of Apple's (AAPL) new premium streaming service at the start of the quarter clearly didn't help. Apple Music was offering three free months to get folks to use its service and it appears to have initially won over some Pandora users. The real test will come in the current quarter as Pandora tries to woo those music fans back.

    Skechers (SKX) -- Down 30 percent last week

    Another stock that got tripped up on loose laces was Skechers. It posted quarterly results that fell short of Wall Street forecasts. Revenue clocked in at $856 million. Analysts were holding out for $877 million.

    Domestic wholesale sales rose at a mere 12 percent clip over the prior year. Double-digit growth isn't a problem, but Skechers was growing a lot faster in its previous quarters.

    Apollo Education Group (APOL) -- Down 28 percent last week

    Finally, we have the parent company of the University of Phoenix flunking out. Apollo posted a 14 percent year-over-year drop in revenue, fueled by yet another decline in enrollment levels. There are 190,700 degreed enrolled students at Apollo's schools, but that's a sharp drop from the 233,500 folks that it was schooling a year earlier.

    Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Apple, Pandora Media and Skechers. Try any of our Foolish newsletter services free for 30 days. Check out our free report on one great stock to buy for 2015 and beyond.

     

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    Food and Farm Mad Cow
    Nati Harnik/AP
    PARIS -- t's official: Ham, hot dogs and other processed meats can lead to colon, stomach and other cancers -- and red meat is probably cancer-causing, too.

    While doctors in rich countries have long warned against eating too much meat, the World Health Organization's cancer agency gave the most definitive response yet Monday about its relation to cancer -- and put processed meats in the same danger category as smoking or asbestos.

    The findings don't say that a slice of salami is as dangerous as a cigarette, but they could weigh on public health policy and recommendations by medical groups amid a growing debate about how much meat is good for us. The meat industry protests the classification, arguing that cancer isn't caused by a specific food but also involves lifestyle and environmental factors.

    A group of 22 scientists from the WHO's International Agency for Research on Cancer in Lyon, France evaluated more than 800 studies from several continents about meat and cancer. The studies looked at more than a dozen types of cancer in populations with diverse diets over the past 20 years.

    Based on that evaluation, the IARC classified processed meat as "carcinogenic to humans," noting links in particular to colon cancer. It said red meat contains some important nutrients, but still labeled it "probably carcinogenic," with links to colon, prostate and pancreatic cancers.

    Ian Johnson, a nutrition researcher with the Institute of Food Research who is unconnected to the IARC findings, cautioned that the classification doesn't reflect "the actual size of the risk," but said meat consumption is one of many factors contributing to high rates of bowel cancer in the U.S., western Europe and Australia.

    "The mechanism is poorly understood, and the effect is much smaller than, for example, that of cigarette smoking on the risk of lung cancer," he said.

    The cancer agency noted research by the Global Burden of Disease Project suggesting that 34,000 cancer deaths per year worldwide are linked to diets heavy in processed meat -- compared with 1 million deaths a year linked to smoking, 600,000 a year to alcohol consumption and 200,000 a year to air pollution.

    The agency said it didn't have enough data to define how much processed meat is too dangerous, but said the risk grows with the amount consumed. Analysis of 10 of the studies suggested that a 50-gram portion of processed meat daily increases the risk of colorectal cancer over a lifetime by about 18 percent.

    Doctors have warned that a diet loaded with red meat is linked to cancers, including those of the colon and pancreas. The American Cancer Society has long urged people to reduce consumption of red meat and processed meat.

    "For an individual, the risk of developing colorectal cancer because of their consumption of processed meat remains small, but this risk increases with the amount of meat consumed," Dr. Kurt Straif of the IARC said in a statement. "In view of the large number of people who consume processed meat, the global impact on cancer incidence is of public health importance."

    The North American Meat Institute argued in a statement that "cancer is a complex disease not caused by single foods" and stressed the importance of lifestyle and environmental factors.

    The researchers defined processed meat as anything transformed to improve its flavor or to preserve it, including sausages, canned meat, beef jerky and anything smoked. They defined red meat as "all types of mammalian muscle meat, such as beef, veal, pork, lamb, mutton, horse and goat."

    The report said grilling, pan-frying or other high-temperature methods of cooking red meat produce the highest amounts of chemicals suspected to cause cancer.

     

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    New Home Sales
    Gerry Broome/AP
    By Lucia Mutikani

    WASHINGTON -- New single-family home sales fell to near a one-year low in September after two straight months of gains, but a jump in prices suggested that housing remained on solid ground.

    The Commerce Department said Monday sales dropped 11.5 percent to a seasonally adjusted annual rate of 468,000 units, the lowest level since November 2014. August's sales pace was revised down to 529,000 units from the previously reported 552,000 units.

    The September report does little to alter our view that the housing market is continuing to recover.

    The moderation in new home sales is at odds with other housing reports that have painted a bullish picture of the sector. New home sales, which account for 7.8 percent of the housing market, tend to be volatile on a month-to-month basis because they are drawn from a small sample.

    "The September report does little to alter our view that the housing market is continuing to recover. We view the new home sales data as unreliable and many other more reliable housing indicators have been sending upbeat signals lately," said Daniel Silver, an economist at JPMorgan (JPM).

    September data on existing home sales, homebuilder confidence and housing starts have been fairly strong.

    The housing index fell more than 1 percent on the data, underperforming a marginally weaker stock market. D.R. Horton (DRI), the largest U.S. homebuilder, dropped 2.7 percent. Lennar (LEN), the nation's second-largest homebuilder, fell 2.1 percent.

    Prices for U.S. government debt rose, while the dollar slipped against a basket of currencies.

    Housing Supporting Economy

    A sturdy housing market is supporting consumer spending through an increase in household wealth, which is helping to soften the blow on the economy from faltering global growth, a strong dollar and weak capital spending in the energy sector.

    Efforts by businesses to reduce an inventory bloat also have weighed on growth, leaving gross domestic product growth estimates for the third quarter running below a 2 percent annualized rate.

    The economy grew at a 3.9 percent rate in the second quarter. The government will publish its advance third-quarter GDP estimate Thursday.

    Economists had forecast new home sales slipping to only a rate of 550,000 units. Sales were up 2 percent compared to September of last year.

    New home sales tumbled 61.8 percent in the Northeast to the lowest level since April. Sales declined 6.7 percent in the West and were down 8.7 percent in the populous South. In the Midwest, sales fell 8.3 percent.

    With sales weak, the stock of new houses for sale increased 4.2 percent to 225,000 last month, the highest level since March 2010. Still, supply remains less than half of what it was at the height of the housing boom.

    At September's sales pace it would take 5.8 months to clear the supply of houses on the market, the highest since July 2014. That was up from 4.9 months in August.

    The median price of a new home rose 13.5 percent from a year ago to a nine-month high of $296,900.

    "The strong price gains suggest either that the mix of houses shifted to more expensive houses or that homebuilders are pushing up prices," said John Ryding, chief economist at RDQ Economics in New York. "Weakening demand would be accompanied by slowing price gains or price declines."

     

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    Wall Street Pep Boys
    Richard Drew/APManny, Moe and Jack, mascots of Pep Boys, pose for photos on the floor of the New York Stock Exchange to celebrate the company's 90th anniversary in 2011.
    By Arunima Banerjee and Anya George Tharakan

    Japanese tire-maker Bridgestone said it would buy auto parts retailer Pep Boys-Manny, Moe & Jack (PBY) for $835 million to expand its retail presence in the United States.

    The deal will boost Bridgestone's retail network by more than a third in the United States, the company said.

    Bridgestone operates a chain of auto care and tire stores in the United States through its Bridgestone Retail Operations unit.

    "Bridgestone is looking to expand its market share in services and tires ... it's a little harder to understand what they might do with [Pep Boys'] retail operations but they'll come up with a plan for it," Jefferies analyst Bret Jordan said, adding that it was unlikely the company would get rival bids from strategic buyers.

    Bridgestone's U.S. business accounts for nearly half of its total sales, according to Thomson Reuters (TRI) data.

    The company's $15-a-share cash offer represents a premium of 23.5 percent to Pep Boys' Friday closing. Pep-Boys' shares jumped nearly 23.3 percent to $14.98 in morning trading.

    The company, founded in 1921 by four friends who pooled together $800 to open an auto parts store in Philadelphia, will add about 800 locations to BSRO's existing 2,200 centers.

    Pep Boys has been on the block since June, when it said it was considering selling itself as part of a strategic review.

    Unlike rivals AutoZone (AZO) and Advance Auto Parts (AAP), Pep Boys hasn't benefited from a resurgent U.S. auto industry due to high costs eating into its earnings and falling sales at its do-it-yourself business.

    The Wall Street Journal reported in May that private equity firm Golden Gate Capital and other suitors had expressed interest in buying the company.

    Private equity firm Gores Group walked away from a $15-a-share deal to buy Pep Boys in 2012.

    The deal is expected to close in the beginning of 2016.

     

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    FILE - In this April 2, 2015 file photo, the 2016 Nissan Maxima SR is presented at the New York International Auto Show, in New York. A Nissan recall for possible fuel leaks in crashes has been expanded to include nearly 59,000 Altima and Maxima sedans worldwide. The recall now covers certain 2013 to 2016 Altima midsize cars and some 2016 Maxima large cars. (AP Photo/Mark Lennihan, File)
    Mark Lennihan/AP2016 Nissan Maxima SR
    DETROIT -- A Nissan recall for possible fuel leaks in crashes has been expanded to include nearly 59,000 Altima and Maxima sedans worldwide.

    The recall now covers certain 2013 to 2016 Altima midsize cars and some 2016 Maxima large cars. Also included are some 2014 to 2016 Teana sedans made in Russia. All have V6 engines.

    Nissan says in documents posted by U.S. safety regulators that in a crash, fuel could leak from a seal between the gas tank and the fuel sending unit. That could cause a fire.

    The company says the problem was discovered in crash tests, and it has no reports of fires, injuries or fuel leaks.

    Dealers will install a retainer ring to help maintain a proper seal. The recall should begin within the next two months.

    The recall began in July with about 5,500 2016 Maxima sedans, but Nissan said at the time it was investigating to find out whether more models were affected.

    A company spokesman said Monday that no Infiniti luxury brand vehicles are affected by the recalls.

     

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    Financial Markets Wall Street
    Richard Drew/AP
    By Caroline Valetkevitch

    NEW YORK -- The Dow and the S&P 500 edged lower Monday as energy shares dropped with oil prices and Apple retreated a day before its quarterly results.

    Investors were cautious ahead of the Federal Reserve's two-day policy meeting, which begins Tuesday. The market is looking for clues on the outlook for when the Fed may begin raising interest rates.

    Apple (AAPL) shares fell 3.2 percent to $115.28, making it the biggest drag on all three major indexes, while a weak outlook from one of its suppliers, Dialog Semiconductor, led a fall in other semiconductors. An index of semiconductors was down 2 percent after three days of gains.

    With Apple, it's more about their forecast and China news and any upgrades they may want to announce.

    The iPhone-maker reports quarterly results after the market closes Tuesday.

    "With Apple, it's more about their forecast and China news and any upgrades they may want to announce," said Rick Meckler, president of LibertyView Capital Management in Jersey City, New Jersey.

    The S&P energy sector fell 2.5 percent, leading sector declines for the S&P 500. Crude oil prices slipped as global oversupply pushed fuel storage sites close to capacity. Exxon (XOM) fell 2.1 percent to $81.22, while Chevron (CVX) was down 2.7 percent to $88.77.

    U.S. stocks have mostly gained in October after a weak third quarter. The S&P 500 is up 7.9 percent for the month so far.

    "It's been a pretty big move up, so we're seeing a little bit of consolidation today," Meckler said.

    The Dow Jones industrial average (^DJI) fell 23.65 points, or 0.1 percent, to 17,623.05, the Standard & Poor's 500 index (^GSPC) lost 3.97 points, or 0.2 percent, to 2,071.18 and the Nasdaq composite (^IXIC) added 2.84 points, or 0.1 percent, to 5,034.70.

    Among the top Nasdaq gainers, shares of Ctrip.com (CTRP) rose 22.1 percent to $90.78 after the online travel firm said it would merge with Qunar Cayman Islands. Qunar (QUNR) jumped 7.9 percent to $42.65.

    Strong quarterly results from tech companies have helped improve expectations for overall U.S. third-quarter earnings.

    S&P 500 earnings are estimated to have declined a more modest 2.8 percent in the quarter, compared with 4.2 percent forecast at the start of the month, according to Thomson Reuters (TRI) data.

    Housing Slips

    Data showed new home sales fell 11.5 percent in September, suggesting a softening of the housing market. An index of housing shares was down 0.4 percent.

    Among other gainers, Pep Boys (PBY) jumped 23.4 percent to $14.99 after it agreed to be acquired by Bridgestone for $15 a share.

    Piedmont Natural Gas (PDM) rose 36.9 percent to $57.82 after it agreed to be bought by Duke Energy. Duke Energy (DUK) fell 2.4 percent.

    NYSE declining issues outnumbered advancers 1,916 to 1,153, for a 1.66-to-1 ratio; on the Nasdaq, 1,749 issues fell and 1,077 advanced, for a 1.62-to-1 ratio favoring decliners.

    The S&P 500 posted 36 new 52-week highs and 8 lows; the Nasdaq recorded 111 new highs and 73 lows.

    About 6.1 billion shares changed hands on U.S. exchanges, below the 7.3 billion daily average for the past 20 trading days, according to Thomson Reuters data.

    -Abhiram Nandakumar contributed reporting from Bangalore, India.

    What to watch Tuedsay:
    • The Commerce Department releases durable goods for September at 8:30 a.m. Eastern time.
    • Standard & Poor's releases S&P/Case-Shiller index of home prices for August at 9 a.m.
    • The Conference Board releases the Consumer Confidence Index for October at 10 a.m.
    Earnings Season
    These selected companies are scheduled to report quarterly financial results:
    • Alibaba Group (BABA)
    • Apple (AAPL)
    • Comcast (CMCSA)
    • Dupont (DD)
    • Ford Motor Co. (F)
    • Gilead Sciences (GILD)
    • Merck & Co. (MRK)
    • Pfizer (PFE)
    • Reynolds American (RAI)
    • Twitter (TWTR)
    • United Parcel Service (UPS)

     

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    Girl dressed as ghost
    Getty Images
    By Raechel Conover

    It's possible to create pretty much any Halloween costume by thinking outside the box (putting aside the fact that many of the ideas here start with a box). Choosing to DIY instead of buy can save money on a holiday that costs more than you might think. Each person who celebrates Halloween this year will spend an average $74.34 for decorations, costumes and candy, according to the National Retail Federation. With more than 157 million Americans expected to mark the holiday, it's a $6.9 billion retail bonanza. At the very least, the money saved making one of these costumes at home can be put into a bigger candy budget.

    Rocket kid. This Halloween costume suggested by Real Simple is made entirely from items most likely on hand. Dress in all white and use duct tape to create armbands and leg stripes. Use two Pringles cans, streamers and two party hats to create a power pack and Rocket Kid is set for takeoff.

    Life-size legos. This Pinterest-inspired costume has only three components: a big box, Solo cups and paint. Start by painting the box blue or red to match the color of the cups, cut armholes and a head hole in the box, and remove the bottom to allow for legs and feet. Glue the Solo cups in place -- two lines of three on the front and back, just like a Lego. For an extra touch add a hat: Paint a smaller box, cut out a hole for the head and glue two more Solo cups on top.

    Hula girl. This easy and cheap Halloween costume from Real Simple uses a brown paper bag cut into strips for the skirt and different color cupcake liners strung together for a colorful lei and headband.

    Animal. Pretty much any animal can be the muse for a homemade Halloween costume. Don a monochromatic sweatsuit and use felt or fabric scraps to fashion a hat or headband to be the ears. Create a tail and other fur detail with scraps of fabric and yarn.

    Jellyfish. Dress in white or a light color. Glue white or light pink streamers around the bottom of a clear umbrella and cut eyes from construction paper to attach to the side. Carry the umbrella and -- poof! -- a jellyfish.

    Game show contestant. Wear a college sweatshirt and cut off the side of a cardboard box. On the front panel, paint a scoreboard from "The Price Is Right" or another game show. Use twine to hang the panel in front of you like a podium, add a name tag and it's done. This easy Halloween costume also can be the building block for a group Halloween costume -- "Family Feud" contestants, for example.

    Stick figure. Assemble an all-black outfit, including a hoodie -- old clothes only. Take a can of neon spray paint and spray a stick figure onto the back of the clothing, with a circle on the hood to serve as the head. Repeat on the front and outline the hood opening for the head.

    Bad yearbook picture. This Pinterest-inspired Halloween costume for women requires loading on the blush, bright blue eye shadow, ruby red lipstick, etc. Pick out a gaudy shirt and style big hair and bangs. Cut armholes near the bottom on two sides of a cardboard box and cut off the bottom. Cut out one of the remaining sides, leaving a 3-inch strip of cardboard around the edges and paint this strip to make a picture frame. Paint the inside back of the box a bright blue for the backdrop.

    Grapes. This is a classic, dead simple and low-cost getup that can still go for as much as $75 in stores. Instead, start by dressing all in purple. Blow up purple balloons and attach them to the clothing to become a walking cluster of grapes. Top off the costume with a green hat.

    Rock, paper, scissors. This group costume takes a bit of effort but is clever and uncomplicated. Cut a cardboard box into the shape of a rock, one side for the front and one for the back. Cut armholes into the sides and spray paint the box gray. Cut armholes in another box and paint the front and back white. Decorate the white surfaces with thin, horizontal lines and three small black circles at the left edges to replicate a piece of loose-leaf paper. Finally, take two large pieces of strong cardboard or poster board and cut them into the shape of scissors, paint them and string ribbon between the two cutouts to wear over the shoulders like a sandwich board.

    Soap and loofah. For the first part of this couples' costume, cut out holes for the arms and head from a rectangular cardboard box and remove the bottom. Paint the box white and spray paint the word "soap" on the front and back, attaching bubble wrap to the corners to look like suds. For the loofah, buy a bunch of tulle and sew it thick and bunchy onto an old dress or pants/shirt combo, preferably the same color as the tulle. Attach a loop of white rope to complete the look.

     

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    nest full of golden eggs with...
    ShutterstockNext year IRA income limits will increase for spouses without retirement accounts.
    By Emily Brandon

    You won't be able to save more in a 401(k) or individual retirement account in 2016. However, you can earn slightly more and still be eligible to contribute to a Roth IRA and claim the saver's credit. Here are the ways your retirement accounts will change in 2016.

    401(k) contribution limits unchanged. The contribution limit for 401(k)s, 403(b)s, most 457 plans and the federal government's Thrift Savings Plan will remain $18,000 in 2016. The catch-up contribution limit for workers age 50 and older will also stay the same at $6,000. "The pension plan limitations will not change for 2016 because the increase in the cost-of-living index did not meet the statutory thresholds that trigger their adjustment," according to a statement from the IRS. Most savers don't come anywhere near the 401(k) contribution limits. Only about 10 percent of 401(k) participants contribute the maximum possible amount each year, according to Vanguard 401(k) plan data.

    IRA contribution limits stagnant. The IRA contribution limit will continue to be $5,500 in 2016. Workers age 50 and older can make catch-up contributions of an additional $1,000. Many retirement savers max out their IRA each year. Some 43 percent of IRA investors contributed the maximum possible amount in 2013, according to an Employee Benefit Research Institute analysis of IRAs.

    Bigger Roth IRA income cutoffs. Workers can earn $1,000 more in 2016 and still be eligible to contribute to a Roth IRA. Eligibility to make Roth IRA contributions phases out for taxpayers whose adjusted gross income is between $117,000 and $132,000 for individuals and heads of household and $184,000 to $194,000 for married couples. "This will make a few more folks eligible for the Roth," says Kevin Brosious, a certified financial planner and president of Wealth Management Inc. in Allentown, Pennsylvania. However, there are a couple of ways you can contribute to a Roth IRA even if your income is above the cutoff amounts. "A backdoor Roth is where you contribute into a nondeductible IRA and then convert it to a Roth IRA," Brosious says. "Also, the IRS now allows after-tax contributions made to a 401(k) to be converted into a Roth IRA."

    Traditional IRA income cutoffs remain the same. Savers who have a workplace retirement account can additionally claim a tax deduction for IRA contributions, unless their income exceeds certain annual limits. The IRA tax deduction is phased out for singles and heads of household whose modified adjusted gross income is between $61,000 and $71,000, the same as in 2015. The income phaseout range is $98,000 to $118,000 for married couples when the spouse who contributes to the IRA also has access to a workplace retirement plan. There are no income limits for the IRA tax deduction for people who don't have a retirement account at work.

    IRA income limits increase for spouses without retirement accounts. Savers who don't have a workplace retirement account but are married to someone who does can claim the full tax deduction on their IRA contribution until the couple's income exceeds $184,000, which is $1,000 more than in 2015. The IRA tax deduction for spouses without retirement accounts is gradually phased out for couples earning between $184,000 and $194,000 in 2016.

    Higher income limit for the saver's credit. Workers with slightly higher incomes will qualify for the saver's credit in 2016. Single retirement savers are eligible for the credit until their adjusted gross income exceeds $30,750, which is $250 higher than in 2015. The income limit for married couples will climb by $500 to $61,500. And heads of household qualify for the credit if their income is $46,125 or less, up from $45,750 in 2015.

    This tax credit for people who save for retirement isn't well known, with only 30 percent of workers saying they are aware of the saver's credit, according to a survey of 4,550 workers by Harris Poll for the Transamerica Center for Retirement Studies. For people who qualify, the saver's credit is worth between 10 and 50 percent of the amount contributed to a retirement account up to $2,000 for individuals and $4,000 for couples, with the biggest credits going to people with the lowest incomes. "Now, even more low- and moderate-income American workers can benefit from this valuable tax incentive to save for retirement," says Catherine Collinson, president of the Transamerica Center for Retirement Studies. "The saver's credit literally pays workers to save for retirement. It's a free matching contribution from the IRS."

    Emily Brandon is the senior editor for Retirement at U.S. News. You can contact her on Twitter @aiming2retire, circle her on Google Plus or email her at ebrandon@usnews.com.

     

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    Credit card
    Getty Images
    By Christopher Elliott

    A recent poll bears out something I already believed to be true and am happy to see: Consumers are finally losing their enthusiasm for airline and other affinity credit cards.

    Bankrate (RATE), an aggregator of financial rate information, reports that its Money Pulse survey found that cardholders "express little enthusiasm for accumulating extra rewards." In fact, half the respondents said they wouldn't care if their card stopped offering loyalty rewards altogether.

    Affinity cards, for the uninitiated, are credit cards offered by a bank and co-branded with another company, such as an airline or hotel, that often allow cardholders to collect miles or points for every dollar spent. Critics say the cards prod consumers to spend ever more money so they can collect points toward perks such as free air travel, reduced hotel rates or preferential treatment at travel destinations. Who wants out? People like Dick Martin, a retired information systems supervisor from Moses Lake, Washington. Frustrated by blackout dates, high mileage requirements for award tickets and an annual fee, he recently cut ties with his plastic.

    "There were too many blackout dates," Martin says. "The points required for any flight were quite high, and I also paid $70 per year for the privilege of having the card."

    Milton Kidd, a retired professor from Washington, D.C., says he felt strung along by his airline-branded affinity card. He paid a $79 annual fee and obediently collected miles for years. But when he finally had a chance to book a seat from Portland, Maine, to Tallahassee, Florida, his airline told him he needed to buy more miles. He had to redeem all of the miles he'd earned and pay the airline an additional $326. "The entire thing was a rip-off," he says.

    Kidd is allowing his remaining miles to expire and has cut up his card.

    Only a limited number of customers actually benefit from these payment systems in a meaningful way over the long term, experts warn. You're probably not one of them.

    But ending the relationship isn't easy. Travelers are sometimes bound to their cards by irrational fears, Web sites that extol the virtues of point-collecting and, of course, by the debt they've accrued by overspending.

    Even when travelers know the cards overpromise rewards and have the potential to damage their personal finances, they still don't want to give them up, says Thomas Nitzsche, a spokesman for ClearPoint Credit Counseling Solutions, a nonprofit agency offering consumer credit counseling. They don't want to lose the ability to earn more miles or the elusive "free" ticket. Nearly half of ClearPoint's clients at least initially refuse to part with their mileage-earning credit cards, he says. The biggest reasons: unfounded fears that their existing rewards will be deleted or their credit rating will be affected.

    "It's something close to addiction," Nitzsche says. "In some cases, clients just leave with our advice and then come back months later when the cards are completely maxed out or defaulted and closed by the creditor."

    Did he just say "addiction"? Yes, and it's not hyperbole. Michele Paiva, a psychotherapist and neuromarketer in Downingtown, Pennsylvania, says compulsively collecting miles is akin to drug dependence. (Neuromarketing is the study of consumers' cognitive responses to marketing stimuli, such as lower prices or promotions.) "An affinity card creates a false sense of relationship, of being special," she explains.

    My experience with reporting about these cards as a consumer advocate supports both Nitzsche's and Paiva's assertions. After my first column on the topic appeared, I was surprised by a barrage of e-mails from angry cardholders who criticized my story with playground insults.

    Many of them appeared to be coming from the readers of several small travel blogs, whose publishers were understandably angry. After all, they were pocketing generous commissions from credit card companies for each new customer they referred, and my stories were bad for business. Even more disturbing was that some of these bloggers had been cited as travel experts by colleagues in the media.

    The mainstream view on affinity cards varies. Some industry-watchers say cardholders can win the game by learning the system and paying off their cards every month. "Those who always pay their balances in full and on time will usually come out ahead," says Jason Steele, a credit card expert at CompareCards.com, who says he is not compensated by credit cards for his advice.

    "But that's only about half of all cardholders."

    Credit card companies employ hundreds of lawyers and MBAs to ensure that the revenue is much greater than the rewards you receive.

    Others say an affinity card is worth it only if you're a frequent business traveler on an expense account -- and even then, it can be risky.

    "Credit card companies employ hundreds of lawyers and MBAs to ensure that the revenue is much greater than the rewards you receive," says K. Alexander Ashe, the chief executive of Spendology, a company that develops budgeting apps. Even in the hands of an experienced user, it's easy to inadvertently carry a balance, such as when there's a delay in getting a reimbursement from your employer. "Many credit cards accrue interest on a daily basis," Ashe warns.

    Matthew Coan, publisher of the financial website Casavvy.com, says travelers such as Martin and Kidd can't be blamed for signing up in the first place. "People get excited when they get the offer for a branded card and feel like they need to take advantage of it," he says. The catch -- that the rewards cards carry a higher interest rate and fees than comparable payment systems -- tends to get buried in the fine print.

    "If you decide to carry a balance on your branded card, then the interest that you pay will greatly outweigh any rewards that you will be earning," Coan says.

    Of course, talk like that is probably considered blasphemy in the Church of Miles, but facts are facts. Unless you pay all your bills on time and have time to master the complex rules of this game, you're better off without these cards.

    Christopher Elliott's latest book is "How To Be The World's Smartest Traveler" (National Geographic). You can get real-time answers to any consumer question on his new forum, elliott.org/forum, or by emailing him atchris@elliott.org.

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    Healthcare application
    Alamy
    By Marisa Torrieri

    Which health insurance will you choose?

    On the surface, it's a simple question -- but it's one that can be fraught with much anxiety.

    For those who have health coverage through work, the process can be as simple as reviewing your company's health plan comparison sheets, calling your benefits hotline, clicking a few buttons -- and voilà, you've made your elections.

    But for all those self-employed people out there -- contractors, freelancers and all-around one-man bands -- choosing a health plan isn't quite so easy a process.

    It can feel more like you're working on a senior thesis, with all the fact-finding and research you have to do. But instead of gaining more clarity, you can often end up more confused than when you started.

    Metal plans? HMOs? Coinsurance? Oh, my!

    To show just how difficult it can be, we asked two self-employed people facing vastly different health care choices -- one wants bare-bones solo coverage, the other has to cover a family of four -- to share the difficulties they're encountering in choosing a health plan for 2016.

    Then we asked Sarah O'Leary, founder and CEO of ExHale Healthcare Advocates -- a Dallas-based company that helps consumers and businesses navigate their health care options -- to offer advice on what factors should come into play with their decision-making.

    Her guidance could help those of you out there who can't just run down the hall to pick your resident HR rep's brain.

    Courtesy: Rick Rockwell
    The Healthy Single Guy

    Who: Rick Rockwell, 39, health and fitness consultant, Sacramento, California.

    My health care scenario: "As someone who works in the fitness industry, staying healthy is important to me. Currently, my main job is to manage a website that reviews health supplements, but I've also been a personal trainer, wellness coordinator and health instructor for more than 10 years.

    That means I exercise four to five days a week. I don't drink or smoke. I take vitamins and protein supplements. And I try to eat well. I've only been to the doctor once in the last three or four years -- I don't even go for annual checkups.

    So it's frustrating that, because of the Affordable Care Act, I'm forced to buy insurance that I'll rarely use.

    Fortunately, for 2015 I qualified for tax credits on a basic plan I got through my state exchange, which helped push my premium below $100. But I have to shop for a new policy for 2016 because I'm now in a higher income bracket and no longer qualify for the same tax breaks.

    I'm dreading picking a new plan -- I think the process is a pain, and I don't want to shell out a lot every month for something I won't use.

    So my goal is to pay as little as possible. The bare minimum coverage is all I really need -- just something to have in case of an emergency."

    What the health care pro says: For starters, O'Leary says Rick should consider recalibrating how he thinks about health insurance. "[Just as] we're required to carry auto insurance, we're now required to carry health insurance -- or risk the penalties if we choose not to," she says.

    Plus, there are risks to his chosen profession. "As a personal trainer, he could have a weight fall on him and be in a situation where he needs his insurance," she adds.

    Unfortunately, Rick doesn't qualify for the most bare-bones catastrophic health plans designed to provide coverage only in the event of a serious accident or illness.

    So Rick's most-affordable option would likely be a bronze health plan, which tends to have low premiums but pays for only 60 percent of medical costs.

    "You only qualify for a catastrophic plan if you're under 30 or you are over 30 and can certify that you can't afford coverage or are experiencing financial hardship," O'Leary explains.

    So Rick's most-affordable option would likely be a bronze health plan, a category of ACA coverage that tends to have low premiums but pays for only 60 percent of medical costs, on average.

    Premiums can vary greatly by region or state, but O'Leary says Rick could find comparable bronze plans on the California health exchange and on the open market -- adding that there could be one administrative advantage to shopping off the exchange.

    "When people are sure they aren't going to receive subsidies, they'll sometimes choose to go on the open market because you don't have to fill out the same [type of] application that's necessary for HealthCare.gov or the state exchanges -- it's just a little bit easier," she explains. "But you have to make sure it's a legit, quality plan that meets minimum ACA requirements or risk getting penalized through your taxes."

    If Rick doesn't travel much outside of his immediate area, he could save further by choosing an HMO bronze plan, O'Leary suggests. HMOs typically offer low premiums because they cover only in-network doctors, but they often have restricted service areas.

    If he goes the HMO route, Rick could potentially reap some tax benefits by opening a health savings account. That's a type of account to which he can contribute pre-tax dollars to cover medical costs -- as long as he has a high-deductible health plan.

    O'Leary suggests one other avenue Rick could explore: "If he belongs to a professional association or union, [he should find out] if they offer a health plan, which might be another way for him to save money [on his health care costs]."

    Courtesy: Yoon Kang-O'Higgins
    The Working Mom

    Who: Yoon Kang-O'Higgins, 40, museum educator, Seattle.

    My health care scenario: "In January, my health benefits changed because I decided to scale back at work, going from being a full-time employee to a part-time contractor.

    Because the art-education consultancy where I work is based in New York and I'm a remote employee in Seattle, I wasn't eligible for the same insurance options as the other staff [when I was full-time]. So my employer and I picked a plan through a Seattle-based provider, which they paid for.

    That plan covered my entire family, which includes my husband, Mark, 45, and our two sons, Oisin, 11, and Ronan, 10. Mark is an artist and art instructor at two colleges, but he's a freelancer, so he doesn't receive health benefits through work.

    When I switched to contractor status, my employer stopped paying for my insurance, so I took over the monthly premiums, which run $1,042 per month for a silver plan, with a $2,500 family deductible.

    Now that it's open-enrollment season, I've started research on the health exchange, but it's hard to comparison shop because I heard my current plan will be changing -- although I don't know how yet.

    Another option has also emerged: The private foundation where I work a few days a week has offered me access to their health plan, but I'd still need to pay a portion of the premium because I'm part-time.

    The foundation's insurance provider estimated I'd have to pay about $1,000 a month, but with a high deductible -- something like $10,000. I'm not sure it's worth it.

    Other than an annual X-ray Ronan gets to monitor an elbow condition, which costs us a few hundred dollars out of pocket, no one in my family has a chronic health need. So I feel like choosing a plan for us shouldn't be so difficult.

    It would make our lives easier to stick with what we have, but if it doesn't make sense economically, we'll switch. I'm just feeling decision paralysis because of all the details I have to sift through."

    What the health care pro says: O'Leary cautions Yoon not to fall into the common trap of making decisions based solely on premiums -- potentially saving $100 a month isn't enough reason to make a switch.

    Rather, she suggests that Yoon put in the elbow grease to create a spreadsheet so she can compare factors like premiums, deductibles, co-pays, coinsurance, prescription drug costs, total out-of-pocket costs and out-of-network coverage for any plan she's considering.

    People are feeling the pinch of costs, so they don't want to spend a lot on premiums. But we encourage them not to let that cloud their judgment.

    "People are feeling the pinch [of costs], so they don't want to spend a lot on premiums," O'Leary says. "But we encourage them not to let that cloud their judgment. [Many factors] fit into the equation of what makes a quality plan for you."

    Even if Yoon sticks with her current plan, changes are afoot -- so it's important that she confirm that her family's preferred doctors will continue to be covered.

    "Don't just take the website's word for it. Call up your doctors and make sure they're in-network," O'Leary suggests. "And when you get your insurance card in January, double-check and triple-check that info, because you have a small window to appeal if you feel they've changed the network since you signed up."

    Ultimately, O'Leary says that if Yoon has been happy with her coverage, her plan remains affordable, and she doesn't anticipate big surgeries or procedures, she shouldn't feel pressured to switch.

    O'Leary does, however, offer up a strategy that could potentially help lower the cost of Ronan's annual elbow X-ray.

    If Yoon's plan doesn't cover it at 100 percent, she can shop around to see how much that same X-ray would cost at different imaging centers, or use a site like Healthcare Bluebook to do a price search in her area. She can then use that information to negotiate the price up front at a chosen facility.

    "[People don't realize] the amount of negotiation that can be done for non-emergency tests and procedures," O'Leary says. "The money you could save by being a smart shopper can be significant."

     

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    Getty Images
    By Ellen Chang

    Consumers can easily boost their credit scores by avoiding some of the fallacies surrounding the extremely convoluted manner in which credit scores are tabulated.

    Each of the three credit bureaus uses its own formula and guards its methods closely, but consumers shouldn't find themselves in a conundrum when they are examining their strategies on paying off credit cards and other bills.

    Consumers reap many rewards when they raise their current credit score, because higher scores mean shelling out less money in interest, which can yield thousands of dollars in savings. A high credit score also means consumers receive a lower interest rate for credit cards, auto loans and mortgages, and the benefit extends to lower rates for auto and home insurance premiums.

    For a quick gauge of where you stand, here's a quick rundown: a score of anything below 620 ranks as poor, 620-699 is fair, 700-749 is good and anything over 750 is excellent.

    Check out your credit reports from Equifax, Experian and TransUnion at least once a year and examine them for errors. Consumers can access credit reports annually for free at www.annualcreditreport.com.

    Paying Your Bills Is 35 percent of a Credit Score ...

    "If there are any inaccuracies, from an address to an incorrect outstanding balance on a credit card, correct them right away by following the directions on each agency's website," said Kevin Gallegos, vice president of the Phoenix operations for Freedom Financial Network, a consumer debt resolution company. "Under the terms of the Fair Credit Reporting Act, the credit bureaus must investigate any disputed items and remove them from the credit report if they cannot be verified."

    Even though you might be pinching pennies and waiting for each paycheck anxiously, make sure your top priority is to pay every single bill on time, every time. Lenders look for borrowers who pay their bills on time. A consumer's payment history accounts for 35 percent of your credit score, "making it the largest piece of the pie," said Bruce McClary, spokesman for the National Foundation for Credit Counseling, a Washington, D.C.-based non-profit organization.

    "Making timely creditor payments should top the list of healthy habits that help build a better credit score," he said.

    Keep your credit card balances low and minimize the percentage utilization to under 35 percent, said Gallegos. For an individual with a credit card with a limit of $10,000, a balance of $3,500 is already a 35 percent utilization ratio.

    "Anything over 35 percent is considered high and can impact credit scores," he said. "Over 50 percent will have a definite negative impact on a credit score and a maxed-out card will very negatively impact the score."

    Pay off the balance of secondary credit cards that you rarely use, because those balances "just muddy up" your credit report, said Howard Dvorkin, a certified financial planner and chairman of Debt.com, a Plantation, Florida-based financial advice website. Keep your report clean, so limit it to one or two cards.

    "Building up a credit score is time consuming, so take baby steps," he said. "Pay your bills on time. Don't mess with this step or you'll fall flat on your face. Your mantra should be: pay on time, pay on time."

    Store Credit Cards Aren't a Good Option ...

    Avoid signing up for credit cards offered by retailers. The discounts they offer are tantalizing, but the interest rates they offer are very high, even up to 27 percent. Even worse, some retail credit cards come with an interest rate that is the same for every customer, treating those with exceptional credit scores exactly the same as those who are below average, McClary said.

    Sears offers three cards -- both the Sears and Sears MasterCard cards offer a whopping APR of 25.24 percent, and the store's "Home Improvement" account offers 14.40 or 18.40 percent based on creditworthiness.

    "It doesn't appear that lower rates are available for those with excellent credit," he said.

    Offers from your local furniture store to consumers to finance a purchase can often come from a subprime lender, even if your credit score is good. These retailers are simply using subprime lenders or companies that finance loans for consumers with lower credit scores.

    Reading the fine print will help you avoid having a subprime lender on your credit report. While doing business with a known subprime lender may not have any impact on your score, it may end up being another item you need to explain when a company like a mortgage lender takes a look at your credit history, McClary said.

    If you regret opening a store credit card or find that you rarely shop there, don't automatically close it. Opening and closing accounts too frequently should be avoided.

    "Keeping a credit card for a long period of time helps build a lengthy credit record which ultimately benefits the score," he said.

    Credit Cards Build Your Profile ...

    Not using credit cards at all is not the solution either, said Gallegos. The credit bureaus can only "rely on past payment history to help determine how borrowers will do in the future," he said. If you refrain from borrowing and only use your debit card, then potential lenders have no information to base their expectations.

    Build your credit report by taking out one credit card such as one with a low limit and pay off the balance each month, said Josh Tschirigi, a financial adviser at Somerset Wealth Strategies in Portland, Oregon.

    "Once you get comfortable with this card, it's a good idea to take out additional cards, because one factor in calculating a credit score is how many credit card accounts you have and how long you have had them," he said. "The more you have and the longer you have them, the better your credit score is if you avoid debt delinquencies."

    Medical debt is now being treated differently and the changes in credit scoring means the debt will not be weighed "as heavily as credit card or other kinds of debt," Gallegos said.

    "Building a strong credit score comes from people being aware of their overall financial picture and they must learn and understand loans, debt, credit cards, income, cash flow and savings," said Shawn Gilfedder, CEO of McGraw-Hill Federal Credit Union in East Windsor, New Jersey. "With a better understanding of their personal finances and by setting goals, they will then be able to change habits."

     

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    Auto Sales
    Charles Krupa/AP
    DETROIT -- Fiat Chrysler (FCAU) is recalling nearly 94,000 SUVs because the air conditioning lines are too close to the exhaust manifold and could catch fire.

    The company looked into the problem after U.S. regulators got two complaints about smoke and fire in certain 2015 Jeep Cherokees.

    Fiat Chrysler says it doesn't know of any related injuries or crashes. Most of the SUVs are in North America.

    Dealers will replace the lines if needed. Customers who lose air conditioning or see a dashboard warning light should contact dealers.

    The company also announced that it's recalling more than 88,000 Ram pickups mainly in North America because the rear axle shafts could break and cause a wheel to separate. Most of the 2015 and 2016 Rams are still at dealers.

    The problem was discovered in a company investigation that found the axle shafts weren't properly heat treated. They can wear and overheat, causing the trucks' anti-lock brake warning light to come on. Fiat Chrysler says it knows of one crash but no injuries caused by the problem.

    Dealers will inspect and replace the axle shafts if needed.

     

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