Sunday Refresh We're feeling the love...
When we launched The Sunday Refresh back in January, we had one goal: to provide our subscribers with the best information, the kind we've wanted to read and couldn't find. We're overwhelmed with all the positive and supportive responses we've received, including these:
"Very practical advice for all investors. Well done!" – Marion C.
"Thank you to you all for the new letter. Your first issue is an excellent start." – Robert F.
"Wonderful idea. I look forward to your columns every week." – Terry T.
We want to help you live a full life. That's why we cover a range of topics. So far, we've written about things like life insurance, 401(k)s, credit-card debt, online brokers, and breast cancer. And we have more great topics planned we're excited to share with you.
If you've enjoyed our service so far, why not share it with a friend? We've made it easy to sign up through the button below. Remember, we're an opt-in service only. We won't add your friend or relative without their permission, so feel free to forward this issue and tell your friends to click the "big green button."
Answering Your Questions
Today, we'd like to answer a few questions from our mailbag. Have a question or a topic you'd like to see? Let us know at [email protected]. We read every e-mail you send and appreciate every question and comment.
Q: I just read over your recent piece on life insurance. You did an excellent job explaining many of the angles to life insurance itself. However, one may NOT inherit the debt a loved one has accumulated. Yes, if you're married or otherwise have your name on a note, then you will inherit that. But if say your parent passes with substantial debt, you will not inherit that debt, unless something has changed that I am unaware of. You may not have anything to inherit as the estate may need to be sold off to pay that debt (all or part), but any debt that is left does not transfer generationally.
Please let me know if I am mistaken. Thanks! – Al B.
A: Thanks, Al. Glad you're enjoying The Sunday Refresh.
You're right... When someone dies, you're not personally responsible for their debt. This can get a bit tricky if you've cosigned a credit card or a loan. But most likely, the entity responsible for debt is the deceased's estate.
For things like student debt and credit-card debt, if there's enough money in the estate, creditors will often go to the estate to pay off remaining debt. For mortgages, the estate or the person inheriting the property is responsible for the mortgage.
Generally speaking, the estate is responsible... not individuals.
Q: Can a public employee roll over a 457 Deferred Compensation plan into an IRA? – Greg S.
A: The short answer is yes. Thanks to the Economic Growth and Tax Relief Reconciliation Act (EGTRRA) signed into law in 2001, government 457 plans now have more options for rollovers.
Prior to 2001, you could only keep an old 457 plan with your prior employer or roll it into another 457 plan. Now you can also roll it into a traditional IRA, a 401(k), or a 403(b) as well. Remember though that you can't roll over your account if you elected to get your payments in equal portions for a period of 10 or more years and have started collecting. You also can't roll it over if you've already started getting your required minimum distributions.
Keep in mind, it's easier to set up a direct account-to-account transfer. Having your plan pay you and then putting those funds into a new account yourself sets you up for possible taxes and penalties. You can learn more about the 2001 tax rule changes right here.
Q: I think a relevant and related topic would be canceling one card and getting a different one because it offers better perks for your lifestyle. How does this impact your credit utilization score? Thanks. – Skip P.
A: As we explained in our issue – "Three Credit Myths Your Bank Wants You to Believe" – closing a card will likely have some impact on your credit, but how much impact depends on factors like the age of the card and its credit limit.
Closing the oldest credit card shortens your credit history, making you look riskier to lenders.
Now, if you are closing a card and opening a new one with the same available balance, the impact on the credit-utilization ratio is likely negligible. The impact could be positive if you're opening a new card with a higher available balance.
Of course, you want to have cards that fit your lifestyle and with rewards that work for you. So, you just need to decide if the potential impact on your credit is worth getting a card that offers better perks.
Q: In keeping with the Stansberry motto of informing readers about things if the roles were reversed, your article on breast cancer should have gone further. The article said only about 10% of cases are hereditary. What are other contributors? – Greg P.
A: Thanks, Greg. Cancer is a multifactorial disease, meaning there isn't simply one cause behind it. That includes breast cancer, which we covered in our issue, "Are You One in Eight?"
About two thirds of all breast-cancer cases are related to hormones, typically estrogen. This is why women with irregular menstruation cycles, those who begin menstruating before age 12, and those who don't start menopause until after age 55 all face higher risk. There's also some limited evidence that hormone-replacement therapy, which some women begin during and after menopause, may slightly increase risk.
But there's a much bigger risk factor we should cover – weight gain. That's because fat tissue contains an enzyme called aromatase. Aromatase produces estrogen. Research has tied it to estrogen-based breast cancer. In fact, one study showed that women who gained 20 to 30 pounds after age 18 had a 40% higher risk of breast cancer than those who only gained five pounds. It's a bigger problem for women after menopause, which is when your risk of breast cancer climbs.
And don't think fatty breasts are the only problem. Having dense breasts, which have more connective tissue and less fat, also puts you at risk as you age. Typically, breasts grow less dense as we age, but if you still have dense tissue, it's a good idea to consider techniques like 3-D mammograms.
As for men, aside from family history, risk factors also include taking estrogen, liver disease like cirrhosis, and testicular injury or disease.
That's why we encourage everyone to perform regular self-exams. The U.S. Preventive Services Task Force recommends beginning mammograms at 50, and discussing the pros and cons of starting earlier. You and your doctor should weigh risk factors against possible false positives if you begin earlier screenings.
If you have any other questions you'd like to see us answer, keep them coming to our feedback line, right here.
Here's to a fresh start,
Laura Bente & Amanda Cuocci
April 29, 2018