tall image
AARP Article

The Relocation Decision

A change of scene can be good for your well-being

To move or not to move, when you retire — that’s a big question. If moving seems sensible, then where? And what will it cost?

The vast majority of new retirees plan to stay in their own homes. But circumstances change. You might be widowed, your spouse might get sick or you simply might get tired of having to find someone to clean the gutters and make repairs. Over 12 years (1992-2004), 30 percent of the home-owning cohort born between 1931 and 1941 pulled up stakes at least once, according to a 2009 study for the Center for Retirement Research at Boston College.

They didn’t go far. The vast majority found a new home within 20 miles of where they lived before. These kinds of moves are a form of aging in place because you don’t leave your community and friends.

One surprising finding — to me, at least — is that moving tends to improve your psychological well-being. That seems right for people who planned a move to new housing or a new part of the country. But even those who are shocked into moving — say, by widowhood or divorce — do better than people in similar situations who stay put, the study found. There’s something about a change of scene that helps pick up your spirits.

Older people who move do it primarily for family reasons rather than reasons of health or finances, according to U.S. Census data. Downsizing occurs less often than you might think. About the same number of retirees want a larger house as want a smaller one, the Census reports. There’s a slight preference for moving from the Frost Belt to the Sun Belt, but not much.

For services and opportunities, the Frost Belt actually looks like a better choice. I learned this from the Milken Institute, an economic think tank in Santa Monica, Calif. Every other year, it puts out a study called “Best Cities for Successful Aging.” Its researchers rank the 100 largest metro areas and 252 smaller ones based on a wide variety of criteria, such as types of housing available, access to transportation, employment opportunities for older people, opportunities for active lifestyles, and educational and cultural activities. It also considers the abundance of health services, as well as the basics, such as taxes and cost of living. The top big cities in its 2014 report? Madison, Wis., and the Omaha, Neb.-Council Bluffs, Iowa area — not exactly towns for year-round golf. The top smaller metros: Iowa City, Iowa, and Sioux Falls, S.D. You can look up the report and check the relative livability of your own city, at milkeninstitute.org.

If you are weighing a move, make careful comparisons. If you stay put, your current house might need major repairs. You might have to add a first-floor bedroom or widen the halls to allow for a wheelchair. By contrast, if you move there will be fix-up costs on your old house and moving expenses. If the move takes you from a house to an apartment, your rent payments will gradually go up. But remember: Had you kept your old house or bought a new one, taxes, insurance and upkeep costs would have risen, too. Downsizing or renting should leave you more money in the bank. In any town, make housing decisions that you think you can afford for life.

(Originally published in The AARP Monthly Bulletin.)

AARP Article

Stop Saving, Start Spending?

In retirement, some die-hard savers stay thrifty for too long

Everyone praises the habit of thrift. Habitual savers spend less than they earn, providing themselves with emergency funds and a comfortable cushion for the future.

But a funny thing happens when they retire and it’s time to start spending the money they’ve saved, says Michael Finke, a professor of personal financial planning at Texas Tech University in Lubbock. They can’t do it. They’re so used to thinking of savings as sacred that they don’t touch the money, even if it crimps their retirement style of life.

Why do they hesitate? Among other reasons, they see their savings as their defense against future inflation and scary medical expenses toward the end of life. These fears might be overblown.

Studies by David Blanchett, head of retirement research for Morningstar Investment Management, found that, on average, retirees reduce their real, inflation-adjusted spending as they age through their retirement. That includes people with comfortable savings as well as people without.

For example, most IRA money isn’t touched until withdrawals become mandatory at 70 1/2, by which time the total dollar amount is generally up because of investment returns. When normal medical costs begin to rise, these retirees have effectively prepared for it by cutting their spending — and growing their savings — in advance.

There are natural ways that retirement spending declines. You’re no longer paying Social Security or Medicare taxes, or contributing to a retirement plan. Workaday expenses go away — commuting, clothing, meals out because you didn’t have time to cook. Younger retirees might pick up the slack by spending more on entertainment and travel. But on average, even those who increase their spending do so at a rate that’s lower than inflation, Blanchett says. Put another way, their real spending falls.

Finke thinks that good savers shouldn’t be afraid to live a little higher on the hog. Depending on their current expenses, relative to savings, people with moderate nest eggs might safely spend something around 8 percent more per year than they’re doing now, he says. For those with high savings, it could be as much as 50 percent more. At the very least, consider spending all of your income instead of adding part of it to savings, as thrifty retirees often do. After all, retirement is what you created that income for.

The averages, of course, gloss over the very personal situation of every household. Some retirees have to cut spending because they retired with a mini nest egg or none at all. Some lost their jobs or had to cut spending when their spouses died. Some but not others will have their savings drained by medical expenses. You might have no choice but to live on less.

If you have a choice, however, and won’t touch your capital, you’re part of what researchers call the “retirement consumption puzzle.” Maybe you limit spending out of deep-seated fear — that you’ll live too long, run out of money, or make an irremediable financial mistake. When you lack confidence in your spending rate, your attitude shifts to preservation, just in case. A few hours with a fee-only financial adviser might give you great comfort, by showing you what you can actually afford.

Maybe, of course, you’re perfectly happy living on less and leaving more for your kids. Still, you might shake yourself up a bit. Spending a little more money can add variety to a retirement life.

(Originally published in The AARP Monthly Bulletin.)

AARP Article

The Second-Marriage Dilemma

Estate planning can be tricky for couples who have former spouses

Inheritance questions tend to be easy when you’ve been married only once. If you die first, your assets—whatever they are—usually go to your spouse. If you have children, you divide the money among them equally. Unequal inheritance sometimes makes sense. For example, you’d leave more to a child who’s disabled. But for the sake of future family harmony, equal amounts work best.

If you enter into a second marriage, however, the choices get harder—especially if you remarry later in life. How much, if anything, do you want to leave to your new spouse? If you own the house, does he or she stay in residence if you die first? In long second marriages, do you leave anything to stepchildren?

If you avoid making these kinds of decisions, state and federal laws decide where your money goes. Your second spouse typically will be able to claim one-third to one-half of the assets covered by your will, even if it says something else. Joint bank or brokerage accounts held with a child will go to that child. Your IRA will go to whomever you’ve named on the IRA’s beneficiary form, leaving your new spouse out.

If you want some other arrangement, you and your spouse must have a written prenuptial (or postnuptial) agreement that meets your state’s inheritance laws. You’ll also need to change those beneficiary forms.

Overwhelmingly, the spouse with more assets wants to make sure that the second spouse is provided for, says attorney Shirley Whitenack of Schenck, Price, Smith & King in Florham Park, N.J. That might mean leaving him or her with money that otherwise would have gone to your kids.

Where assets are roughly equal, however, or in a late-life marriage, spouses might choose to put their own kids first and leave little or nothing to their new mate.

Complications arise when you own a house. You might leave it to your kids but give your spouse the right to occupy it for life. In some states, the spouse’s right is guaranteed, even if he or she remarries, says attorney Molly Abshire of Wright Abshire in Houston. Before the house can be sold, your new spouse and kids will have to come to some kind of agreement (usually financial).

A risk that might not occur to you is the potential cost of long-term care. In many states, married people have a legal duty to support each other. If your second spouse eventually needs long-term care, his or her assets and yours might be tapped to pay the bills. In Texas, that even includes your own income and IRA, Abshire says. You’ll be spending your kids’ inheritance on your second spouse’s medical expenses.

In other states, however, your personal income and IRA might not be forfeited for a spouse’s nursing home expenses. So get good legal advice. You might decide to skip the “I do’s” and publicly become partners instead.

These decisions can be tough to make, especially if you and your new beloved find that you don’t agree. It’s even harder to tell the kids that their inheritance might change. “Often, people freeze and do nothing,” Whitenack says. Or they make their plans secretly, figuring “I’ll be dead and won’t have to worry about it.” That’s the worst outcome. Be brave. Fess up. 

(Originally published in The AARP Monthly Bulletin.)

AARP Article

The Smart Way to Help Grandkids With College

4 tips for helping offset tuition bills

Are you planning financially to help a grandchild  — or niece or nephew — go to college? A common question is whether your gift will hurt the student’s chance at financial aid. The answer: sometimes yes, sometimes no. It all depends on the type of aid the child is apt to get.

If the family earns a substantial income, aid based on financial need is off the table. Instead, the school might offer a merit scholarship. This form of aid goes to students a school particularly wants, typically supersmart kids or those with a special gift. Grandparent money has no effect on merit scholarships, says Dean Skarlis, founder of the College Advisor of New York, which counsels families on educational choice. So feel free to give any amount of aid in any form you want.

It’s another story, however, if the family qualifies for aid based on financial need. In that case, your gift will indeed reduce the amount the student receives. But so what? The money you give will almost certainly exceed any potential loss in need-based aid. What’s more, that “aid” might have come in the form of student loans. Your contribution will help your grandchild graduate with a smaller burden of debt.

Here’s how to help the student while still getting the most out of need-based aid.

1. Give the money to the parent rather than the student and let the parent pay the bills. Students are expected to contribute 20 percent of their assets toward college; the contribution expected from parental assets is limited to 5.6 percent. By routing your gift through the parent instead of through the child, the child will qualify for more aid.

2. If the parents have a 529 plan for college savings, see if you can contribute to that one rather than setting up a 529 of your own. Money paid to the school from a grandparent’s plan won’t affect need-based aid in the student’s first year but counts as student income in future years. As a result, aid could drop sharply. Payments from parents aren’t considered student income. (Quick note: 529 investment plans grow tax-free when the money is used for higher education. They’re offered through brokers and — at lower cost — directly from the states.)

3. Grandparent gifts become a nonissue in January of the student’s junior year. By then, the student will already have filed an aid application for his or her senior year. Any future grandparent contributions won’t show up in the record, so they’ll take nothing from a financial-need award, says Joe Hurley, founder of savingforcollege.com, an expert site for information on 529s. You might let the student and family pay for the first 21/2 years of school and then start making your own contributions after that.

4. A student with financial need might also receive a merit scholarship, says Karen McCarthy, senior policy analyst for the National Association of Student Financial Aid Administrators. A grandparent gift may affect the size of the need-based award but, in most cases, should have no bearing on the merit award.

Before you start writing checks for college (or promise to), be sure that your own retirement is assured. Helping grandchildren to an education is a splendid act — as long as you won’t have to ask for the money back in your older age!

(Originally published in The AARP Monthly Bulletin.)

AARP Article

Got Money Questions?

Jane Bryant Quinn on personal finance.

Q: My husband and I are wondering when would be the best time to collect our Social Security benefits.

A: I get lots of questions like this. The answer differs for every couple, depending on their ages and the size of their potential benefits. Sometimes one of you should take retirement a year or two early so that the other can claim spousal benefits on that account. Sometimes it’s better to wait. These services can provide the answers you need. SocialSecuritySolutions.com charges $20 for a report showing the best time to claim benefits based on the life expectancy you set; it costs $50 if you want to be able to play with various retirement assumptions and $125 for one-on-one advice. SocialSecurityChoices.com charges $39.99 for a claiming strategy based on three projected lifetimes. The services’ recommendations differ a little bit because of the math involved, but both are sound. AARP’s free Social Security Calculator can also help you determine your best age to claim benefits..

Q: Our disabled son’s inheritance will go into a special-needs trust. Can I use a codicil form from the Internet to change the trustee?

A: Please don’t! If the codicil’s wording — or the way you fill in the names or sign the document — doesn’t conform exactly to your state’s law, a court might not accept it. Your son’s welfare is too important to leave to boilerplate.

Q: How are individual retirement accounts divided among heirs? Can I leave my stocks to one child, my bonds to another and my CDs to a third?

A: Yes, you can divide your children’s inheritance in this way, says IRA expert James Lange of the Lange Financial Group in Pittsburgh. But do you really want to? The person who inherits the stocks might wind up much richer than the person who gets the CDs (or much poorer, if the market collapses). You might leave anger or envy behind. And what if you want to sell some stocks and reinvest in CDs? You’d be favoring one child over another. Instead, leave the total value of the IRA in percentages — say, divided into thirds. The trustee will split the assets according to the percentages you decree.

(Originally published in The AARP Monthly Bulletin.)

AARP Article

Get More Out of Your Savings Bonds

Avoid these four mistakes that can cost you money

Are you sitting on a pile of U.S. savings bonds? If not, should you be? For safety-first investors, savings bonds still hold an edge over bank certificates of deposit. Savers put more than $631 million into these bonds last year. Those of you sitting on a pile might find, to your surprise, that some of them currently yield 4 or 5 percent.

Savings bonds come in two flavors — EE bonds, at fixed interest rates, and I bonds, at floating rates that change with inflation every six months. You have to hold them for at least one year. If you sell before five years are up, you pay a penalty equal to three months’ interest. Bonds generally stop paying interest after 30 years.

Almost all savings bonds today are sold electronically, through treasurydirect.gov. You can invest up to $10,000 a year for each type of bond (double that if your spouse buys, too). An additional $5,000 is available in the form of old-fashioned paper I bonds, if you ask that your tax refund be paid that way.

I bonds are the most popular. At this writing, a new bond yields 1.48 percent — and before you turn up your nose, consider the competition. A five-year CD might pay 2 percent, but it offers no inflation protection. You’re taxed on the interest every year unless you buy through a tax-deferred individual retirement account. You also pay taxes at all levels — federal, state and local. The income from savings bonds is tax deferred and then taxed only by the feds.

A quick word about EE Bonds. New bonds are paying (if you can call it “paying”) just 0.1 percent. If you hold them for 20 years, you’ll earn at least 3.5 percent, thanks to a guaranteed catch-up payment. Still, not appealing.

If you’ve owned savings bonds for years and are ready to cash them in, be sure to find out exactly what each bond is worth. Without that information, you might make one of four big mistakes, says Jackie Brahney, marketing director of savingsbonds.com, a service that helps you manage your bond portfolio.

Mistake 1: You cash in the oldest bonds first. They might be your highest earners.

Mistake 2: You look only at the bonds’ face amount when deciding how many to redeem. That might bring you more taxable income than you want. Bonds that add up to $3,000 on their face might be worth $6,000 or more, once the interest is counted.

Mistake 3: You cash in so many bonds at once that the cumulative, taxable interest puts you into a higher bracket.

Mistake 4: You redeem a bond in the day or week before a six-month interest payment is due to be paid.

Free calculators at treasurydirect.gov and savingsbonds.com will tell you what each of your bonds is worth. For as little at $5.95 a year, Brahney’s service will value the bonds and brief you, monthly, on what they currently earn and how much interest they’ve accumulated. Knowing your bonds can save on taxes and raise your earnings, too.

(Originally published in The AARP Monthly Bulletin.)

AARP Article

Are You Ready to Retire Early?

Use this checklist to assess your plans

Are you thinking about retiring early? Back when boomers were young they considered it almost a generational perk. Life’s second half should be merry years of play and rest.

Once you slide into your 50s, however, the question of early retirement grows complex. You might still need your paycheck. If so, case closed. And you might love your work and hope to pursue it for many more years.

If you’re ready to quit, however, there’s a lot to consider before casting loose. On the plus side, you’ll be able to take your life in any direction you want. On the downside, early retirement carries financial and emotional risks. Before telling your boss to take that job and shove it, run down this checklist to see if your plan is sound:

Do you really have enough money to finance a long retirement?

Don’t underestimate your longevity. At, say, 55, men have an average of 28 more years to live, and women 31 years. Roughly half of you will live longer than that. During your early years of play, you’ll be living primarily on your savings and investments, plus any special sources of income such as rents, royalties or perhaps a small pension. You’ll have to wait until 62 to qualify for Social Security retirement benefits. But by claiming that early, your benefit will be docked by as much as 30 percent, compared with what you would receive if you waited until your full Social Security retirement age (67 for today’s 55-year-olds). You might come to regret that.

Have you made a retirement budget you can live with?

To make it easy, sketch the budget for only your first retirement year. Start by listing the income that you can realistically expect after your paycheck stops. For budget purposes — and to feel fairly sure that your money will last for the next 30 years — assume that you’ll take only 4 percent out of your savings and investments. The total, from savings and other sources, represents your spending limit.

Now add up your expenses.If they’re higher than your spending limit, you’ll have to cut back — maybe sharply. That might not be hard if your largest budget item is your house and you’re happy to downsize. If not, you’re probably not ready, financially, to make the leap.

In fact, you’re not even ready if your budget just barely breaks even. Inevitably, you’ll run into costs that you didn’t expect. If you cover them by digging too deeply into savings, you might run seriously short of money a couple of decades from now. You might be better off staying at work for a few more years, cutting spending and concentrating on saving more.

When budgeting future withdrawals from your savings and investments, follow the classic 4 Percent Rule: Take 4 percent of your financial assets in Year 1. Take the same dollar amount plus an inflation increase in Year 2. In Year 3, take last year’s dollar amount plus another increase to cover inflation, and continue on that track. When you eventually sign up for Social Security (later, not sooner, I hope), that income will be inflation indexed, too.

Are you out of debt?

Giving up a paycheck when you’re carrying credit card debt is nothing short of madness.

Do you have health insurance?

Some corporations provide early retirees with health insurance until they reach 65 and qualify for Medicare. If you’re not that lucky, survey the private marketplace carefully to see what’s available at a price you can afford. Going bare can wreck your finances overnight.

Do you have a sustainable investment plan?

At today’s interest rates, you’d need a two-ton truck full of money to live off the interest paid by high-quality bonds or certificates of deposit. Low-quality bonds yield more but carry market risk. If you switch your savings into dividend-paying stocks, you’re facing market risk plus a lack of diversification. That’s because you’ll have too much money in financials, consumer staples and utility company stocks and not enough in the growth stocks that typically don’t pay dividends.

Financial planners might advise early retirees to hold 60 to 70 percent of their money in an index mutual fund that follows the total stock market (both large and small stocks), for 20- and 30-year growth. The balance would go into intermediate-term Treasury bond funds. They’re a good cushion because their prices usually rise when the stock market falls. Research shows that following this strategy in conjunction with the 4 Percent Rule gives you very high odds of making your money last for 30 years. Put an extra 5 percent into stocks if you need the money to last for 40 years.

If you’re married, how well do you and your spouse get along?

Retirement at any age throws you continually into each other’s company. Doing the 50 states in an RV will become a misery if you’re arguing all the time.

How flexible are you?

If your early retirement doesn’t work out because you’re bored or you’re spending money faster than you expected, be prepared to go back to work — part time, at least. That means keeping up your skills or finding new ways of deploying the natural talents you have. If you’re choosing a new place to live, you might consider its employment opportunities, just in case.

Who succeeds at early retirement?

People who have enough money (with “enough” depending on how high on the hog you want to live), plenty of personal interests and an adventurous disposition. Have a happy second half of your life!

(Originally published in The AARP Monthly Bulletin.)

AARP Article

Maximize Your Social Security Benefits

Jane Bryant Quinn answers to your most common Social Security questions

Are you wringing all the money you can out of Social Security?

Based on my reader mail, I worry that some of you are losing out. Here are quick answers to the questions I get the most.

What can you apply for?

Retirement benefits, based on your own lifetime earnings. Spousal benefits, based on a living spouse’s lifetime earnings. Survivor’s benefits, payable after a spouse’s death.

You can effectively collect only one of these benefits at a time. Social Security automatically gives you the largest check you’re entitled to. Children might get benefits, too.

What’s the best age to claim?

This varies a lot. In general, your check is always reduced for life if you file for any benefit before what Social Security calls your “normal retirement age.” That’s 66 for people born from 1943 to 1954 and rises gradually for every birth year through 1959.

For those born in 1960 or later, normal retirement age is 67. There’s a fat bonus for collecting your benefits late: Social Security pays you an extra 8 percent for every year past “normal” that you delay your claim, up to age 70.

Can you claim a benefit as a spouse and later switch to benefits based on your own earnings record?

Yes, provided you wait to file for spousal benefits until you reach “normal” (or “full”) retirement age. You might collect a spousal benefit check from, say, age 66 to 70, then put in for your personal retirement benefit, which will have grown.

This strategy does not work, however, if you file before you reach your normal retirement age. Early filers receive a benefit amount equal to the spousal benefit or their own retirement benefit, whichever is higher. Never both.

Does it ever pay to collect benefits early?

For many married couples, yes. A wife, for example, might retire early on a reduced benefit. When her husband reaches normal retirement age, he can file for spousal benefits on her account. When he reaches 70, he can switch to his own, larger retirement account. How well this strategy works will depend on your ages and which of you is the higher earner.

What if you’re divorced?

You can claim spousal and survivor’s benefits on your ex’s earnings record if you were married for at least 10 years and are not currently married. (Exception: You can keep the survivor’s benefits if you remarry after you pass 60.) Your ex has to be eligible for Social Security, even if he or she has not yet retired.

What if your spouse dies?

If you’ve been collecting a spousal benefit, you can step up to the larger survivor’s benefit. To get the maximum amount, consider putting off your claim until you reach normal retirement age.

You might make a different choice, however, if you have a substantial Social Security earnings record of your own. You might take the survivor’s benefit early, then switch to your own, larger benefit at a later age. Play with the numbers until you get it right.

Helpful resources

(Originally published in The AARP Monthly Bulletin.)

AARP Article

Should You Exit the Stock Market?

Ask yourself these four questions before moving your money

Should the portfolios of older investors include stocks, and if so, what percentage? The issue comes up every time stock prices wobble or fall. If you’re in your 70s or 80s, how safe does your money have to be?

In part, the answer depends on your circumstances and temperament. But there’s one rock-bottom rule: You need to feel sure that, whatever happens to stock prices, you’ll be able to pay your basic bills. Assuming that you have savings to invest, there are several things you might consider.

If it does, forget about it and use some savings to buy immediate-pay annuities. You’ll get a guaranteed income for life and will never have to think about stock prices again. To see how much an annuity would pay, go to immediateannuities.com. The monthly amount will almost certainly exceed what you’d get from high-quality bond funds. Money that is not in the annuity could go into bank savings or CDs so you’d have extra cash on hand.

Do you have enough money from other reliable sources to cover your lifetime needs?

If you’ve got enough money from your pension, Social Security and other investments, owning stocks is optional. “You’ve won the game, so you don’t have to play anymore,” says Larry Swedroe, director of research for the BAM Alliance of wealth managers and author of many personal-investment books. You might want to keep a high percentage of your savings in stocks for the benefit of the next generation, or a low percentage in case your circumstances change. Either way, the investment needs to pass the “stomach-acid” test, Swedroe says. You have to feel safe enough to not feel sick in years that prices plunge.

Do you have savings but need to grow them to provide for your later age?

Well, if so, that’s what stock investments are for, says Judith Ward, a senior financial planner for the mutual fund group T. Rowe Price. At 75, you could live another 15 or 20-plus years, which historically gives the market time to rise in price. The firm recommends at least 20 percent in stocks, with the rest in bonds. Over the past 15 years, that mix of investments lost money in only one year (the loss was just 3 percent), measured by standard stock and bond indexes. For more growth, you might go to 40 percent stocks.

How do you stay “safe” when you have money in stocks?

“Put aside some money for now and other money for later,” says financial planner Judith Lau of Lau Associates in Greenville, Del. “Now” means cash — enough to pay your bills for two years. For example, say that Social Security pays you $1,300 a month and you’re spending $2,300. The difference is $1,000 a month or $12,000 a year. You buy two years of safety with $24,000 in the bank.

“Money for later” comes in two parts. The first part holds reasonably safe investments, such as short-term bond funds, that could pay your bills for three years. You’re now safe for five years, no matter what happens to stocks. The second part comprises stocks and stock funds for longer-term growth. Every year, you sell some of your stock funds to replenish your two-year cash reserve.

That’s the theory, anyway. Stress-test your choice by asking if you’d be OK if stocks fell 50 percent before rising again. That’s the stomach-acid part.

(Originally published in The AARP Monthly Bulletin.)

AARP Article

What to Do About Dementia; Debt and Divorce

Jane Bryant Quinn answers your financial questions

Q: My wife has early-onset dementia. When I call to ask about her retirement account or credit cards, the reps need her permission to speak with me, which she can’t give. What should I do?

A:This is a powerful reminder of the need for a properly executed power of attorney. Had your wife given you her POA as soon as she got the diagnosis, you’d have the right to manage her affairs. It might not be too late, says Rebekah Brooker, an attorney with Scheef & Stone in Dallas. People with dementia often have good days as well as bad ones. On a good day, your wife could legally sign a power of attorney. If your wife doesn’t have good days, your only option is the complexity of a legal guardianship.

Q: When I divorced 12 years ago, my ex agreed to pay the credit card debt but never did. I am being dunned for money I don’t owe. How do I get this off my credit report?

A:Such a short question with so many issues! First, you, too, owed this debt because you’re a joint account holder. A divorce agreement doesn’t change that. You can’t be sued for it because the statute of limitations has presumably run out. But the collection firm that owns your bad debt is still allowed to bill you, which is totally unfair. Unpaid debts should drop off your credit report after 7 1/2 years from the first missed payment. But the debt owner might not have told the credit bureau when to start the clock. Use the bureau’s website to dispute the bills, says Chi Chi Wu, staff attorney for the National Consumer Law Center — not on the ground that your ex should pay (that won’t work) but because they’re stale. The bureau will check with the debt’s owner, which should solve the problem.

(Originally published in The AARP Monthly Bulletin.)