Cheat Sheet Q&A:

Topic:  How Social Security benefits are calculated:

Today’s entry:  Recently you talked about the timing of Social Security benefits and how waiting until 70 isn't always the best thing to do.  I have another question.  How are Social Security payments determined?

Bottom Line:  This is an important question and perhaps even more important than the timing of the collection of your Social Security payments.  The determination of Social Security payments is a two pronged process.  It’s a formula based on the age that you collect factoring:

·        Your top 35 income earning years (adjusted for inflation)

So if you’re earning a good deal of money near the end of your career it can significantly and permanently increase your Social Security income.  It’s one of the many benefits of not making an error on this side of retiring a little too early.  It’s also important to note that if you don’t have 35 years of income the SSA will average in zeros for the balance of the years to 35.  So at a minimum if you plan on Social Security as a potentially important piece of your retirement picture you need to ensure you have 35 years worth of income reported. 

If you have a topic or question you’d like me to address email me:

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Surprise - elite free education available - an update on free college courses:

Bottom Line:  The past two years a trend of free online courses from significant and often highly prestigious schools has been breaking out…  And that’s certainly a good thing.  Not only can anyone who wants to become further educated and self-improve benefit but it can also be a way for someone who has been out of work to have a free way to gain education and skills; it can also be a great explanation to a potential employer about why you’ve been out of work.  For example:  I’ve been looking for work for a year vs. I’ve studied economics at Yale and accounting from the Wharton School of business…  Sound implausible?  It isn’t here are some of the colleges offering free online courses this summer into fall:

·        Wesleyan

·        Duke

·        Stanford

·        Yale

·        Penn’s Wharton School of Business

·        Johns Hopkins

Not bad right?  Here is a direct link to more information about these and other offerings via Business Insider:

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Not your imagination - Hyper inflation has hit a few American food staples:

Bottom Line:  Here’s the definition of hyperinflation:  “Extremely rapid or out of control inflation”. There is no precise numerical definition to hyperinflation but I think you’ll agree that the three food staples I’m about to highlight do qualify.  Here are the three hardest hit foods:

·        Oranges:  Year over year increase of 28%!

·        Beef:  Year over year increase of 16.5%!

·        Cheese:  Year over year increase of 11%

The Federal Government and related lemmings can speak all they want about “Core” inflation (inflation not factoring in food or energy) being low but I’ve still yet to meet a person that doesn’t require the use of energy or food.  Assuming you’re a human we’re experiencing hyper inflation in staples foods that disproportionately hurt those of lesser means.  This is the primary reason I’ve been opposed to QE (despite benefiting from the stock market gains).  These commodities are US dollar denominated and every day that the Federal Reserve has continued to produce more money supply out of thin air via QE, it hurts the relative buying power against all commodities.  With world-wide demand for these commodities remaining high and the US dollar still being diluted (thankfully QE should come to an end in October), hyper inflation is very real every time you walk into a grocery store. 

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What the Citi settlement over mortgages may mean to you:

Bottom Line:  If you paid attention to the news yesterday you likely heard about yet another big bank settlement with the Government.  It’s unlikely that you heard about how it may be relevant to you.  Here’s what you should know and how, if you had a mortgage originated by Citi during or prior to the financial crisis, you may benefit.  The big picture of the Citi settlement…  It’s $7 billion that will be broken out like this: 

·        $4 billion to the Justice Department

·        $500 million to states

·        $2.5 billion to consumer relief

It’s the $2.5 billion to customers of Citi originated mortgages I want to hone in on.  The money will be allocated across these three methods:

·        Construction of affordable rental apartments

·        Principal reduction for mortgages originated by Citi during the affected period

·        Forbearance of loans

Those could be rather significant outcomes for you.  I’ll keep you posted as we gain more specifics but loan forgiveness is as good as it gets.

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Want fine art?  Have an EBay account?  You're good to go:

Bottom Line:  Sotheby’s fine art auctions are legendary.  For most you’ve never thought of being in the New York auction house as the bidding on fine pieces is taking place.  Whether you’re just interested in being a voyeur or if you do want to be a bidder – right from your home computer – you can. 

Sotheby’s tried their own version of an online marketplace unsuccessfully in previous years.  Wisely they’ve teamed up with EBay to enable any EBay account holder worldwide to live stream the Sotheby’s auctions in their famed New York auction house and participate in the bidding if you’re inclined.

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