America Asks the Dolans
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Dear Ken and Daria:
Q: Should I close out my credit cards after they are paid off or leave them open? Which option is best for my credit report?
A:
We suggest that you don't close out credit cards with which you have a long, positive (timely payments) record, even though you may no longer regularly use them. Credit rating services love positive, sustained relationships, and it's good for your credit "history."
DO close out accounts with our credit card cancellation letter that you have not used much in the past or do not regularly use. Too many open lines of credit on many credit cards can hurt both your credit score and, consequently, your ability to borrow at competitive rates.
Q: Will money withdrawn from my retirement accounts be considered earnings that reduce my benefits?
A: No. Social Security counts only the income you earn from a job or your net profit if you're self-employed. Non-work income such as pensions, annuities, investment income, interest, capital gains, and other government benefits will not affect your Social Security benefits.
Q: I’m self-employed in an industry that is slipping big-time. Now I’m getting a divorce. Will the small profit I expect to earn this year be counted as a personal asset in determining the settlement?
A: Title to an asset in most states doesn't mean it belongs only to you in a divorce. A marriage is an economic partnership, and your wife will be allowed to participate in her share of the assets you acquired jointly. The only reason your business assets wouldn't be counted as an asset would be if you had started the business before you got married and both of you signed a prenuptial agreement stating that the business assets, income, and appreciation were yours alone.
Q: If my spouse and I are presently receiving benefits based on my work record, what happens to my wife’s SSA benefits if I pre-decease her?
A: The benefit you're getting now may very well be the amount she gets if and when you pre-decease her. For example, if you're getting an $800 monthly benefit now, your wife should be getting half of your benefit ($400). When you die, her $400 "spouse's" check will stop, BUT then she'll start getting an $800 per month widow's check.
Want to read our answers to more of your questions? Check out our Q&A archives at the top of this page—click here.
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Another day, another bank fee increase. The latest comes from the usual suspect: ATMs. Here's the scoop on how to avoid these costly charges.02:06
