Nov 1, 2007 4:27 PM
Even a billionaire faces identity theft. As you may have read, Mayor Michael Bloomberg’s private bank accounts were invaded by identity thieves. There is no foolproof method for preventing all variations of this insidious crime. One measure of protection is what we mentioned in our last column when we discussed the law that requires the three leading credit rating agencies to give you a free credit report annually. With it you can quickly see if something is amiss and take steps to correct the situation.
But members have asked if there is anything else they can do to protect themselves. Some members recently affected by possible identity theft have applied for credit monitoring services. Others have asked if there is even stronger protection. Last November we reported on a new law that provides for a security freeze that you can put on your credit files.
This freeze can aid in the prevention of identity theft by thwarting someone who tries to get credit in your name. Nobody, including you, can open a new account. You would have to lift the freeze temporarily if you want to apply for a mortgage, car loan or new credit card.
To find out how to apply, go to consumersunion.org/securityfreeze.htm, and check the state in which you live.
You won’t get complete protection; thieves won’t be able to get a new credit card or loan but they can still use the cards they steal from your wallet and the account numbers they pull off improperly discarded receipts. You must still protect yourself by protecting your property and by shredding receipts and other papers that have account numbers or other identifying information.
The IRS is warning people to watch out for an e-mail that promises $80 for participating in an online customer satisfaction survey. The IRS does not pay for participation in surveys. The survey gathers personal and credit card information. Respondents then get calls for further financial information. Do not respond. Instead, forward the e-mail to phishing@IRS.gov. The IRS never sends unsolicited e-mails.
The IRS has given employers the go-ahead to allow their employees a grace period until March 15 to spend the money in their flex accounts. New York Teacher articles (most recently in the Oct. 4 issue) have explained how beneficial these accounts are for using pre-tax money to pay for medical and dental expenses not covered by insurance. This includes setting aside money for many non-prescription drugs. To find out what items are permitted, go to www.drugstore.com and click on FSA Store.
It is going to happen soon. The earliest baby boomers, those born in January 1946, will be reaching Social Security retirement age (age 62) next Jan. 1. Thousands will begin to retire and collect Social Security at a reduced rate. Members who retired between ages 55 and 62 may decide to begin collecting now. This would be a great boost to their retirement income.
Retirees who take early retirement get 75 percent of what they would have gotten had they waited to the full retirement age of 66. Should you do it or not depends on many issues. One is, do you need or want a boost in income at this time? If you need it, there is little alternative.
If you do not need the income, you may want to wait. Let us assume that your full benefit at age 66 would be $1,000 per month. If you start collecting now you would get $750 per month. By collecting early for 48 months you would receive $36,000 over that period. It would take a person who retires at age 66 until age 78 to make up $36,000.
But most 62-year-olds have a life expectancy of more than 16 years. So by waiting to collect their Social Security payments and living beyond age 78 they will wind up receiving much more under Social Security. This is a simple exercise that does not take into consideration interest that could be earned on the money or the effects of the rate of inflation.
After you decide on whether you need the additional income at this time of your life, then the decision about when to begin collecting could be based on health, your family history of longevity or life style issues.
Women, who generally have longer life expectancies than men, are often counseled to begin collecting later.
The decision is an important one so you should give it a great deal of thought before making an irrevocable choice. Consult with financial experts who are familiar with your finances before deciding.
Halloween is over but here are some truly scary facts: Recent statistics show that from 2000 through June of 2007 only 14,100 members out of 63,599 new members of the Teachers’ Retirement System returned enrollment forms; 26,018 returned date-of-birth documentation and 28,918 returned designation of beneficiary forms.
Not filing the first two forms will prevent you from smoothly retiring many years from now. Not filing a designation of beneficiary form may deprive your family and loved ones of important benefits if you should die now.
Please file your forms so that you do not suffer or cause your family to suffer unnecessary hardships. Forms are available from the UFT or TRS.
“Secure your future” is compiled and written by Mel Aaronson, Sandra March and Mona Romain, teacher-members of the NYC Teachers’ Retirement Board. For further information on items discussed, call your UFT borough office or the TRS. BRONX: 1-718-379-6200; BROOKLYN: 1-718-852-4900; MANHATTAN: 1-212-598-6800; QUEENS: 1-718-275-4400; STATEN ISLAND: 1-718-605-1400; Teachers’ Retirement System: 1-888-8NYC-TRS (692-877), www.trs.nyc.ny.us.