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Where can I get a list of agencies that can help me pay my medical bills?

It will take multiple steps to help you eliminate your medical debt. But here are six strategies you can use to knock down those hospital bills and improve your credit rating.

Examine Everything

Start by going over all your medical bills with a fine-tooth comb. Question charges that seem inflated (like that $20 bottle of aspirin). Also, ask for explanations from your healthcare providers regarding invoices for services you don’t recognize or understand. Simply forcing them to account for everything may result is certain charges being waived or reduced.

Find Out About State Freebies

Lots of states offer their residents free mandatory coverage or health insurance with small co-pays and low deductibles. If any of your treatment should have been covered by a state program, see if state resources can fill the gap and pay what you’ve been charged.

Ask Directly for Discounts

Ask the hospitals, clinics and healthcare professionals that serviced you whether or not you qualify for any discounts, charity, or write-downs of your total bill outstanding. Don’t be ashamed to let the hospital(s) know about your entire financial predicament. They may be more lenient if they know that you’re not working, are not insured, have lots of other debts, are a single mom, etc.

Request a Payment Plan

If you can talk to a kindly, flexible billing representative/hospital administrator, or even better, the doctor(s) who treated you, ask if you can get on a payment plan. Try to stretch out the plan for as long as reasonable in order to give yourself time to pay off all that you owe. If they agree to discount $2,000 of your original $5,000 in bills, then you’ll have $3,000 remaining to pay off over time. If you can commit to pay that off in two years, that means you’ll have to pay $125 a month ($3,000 divided by 24 months).

Negotiate to Improve Your Credit Rating

Also, while you are negotiating, request upfront that the hospital agree to delete all negative references to your credit files. They may only do it once you’ve completed your repayment plan. But that’s better than letting the late payment or collection information sit on your credit reports for seven years. Get any agreements in writing.

Get a Medical Advocate

Don’t give up on negotiating down that medical debt, or to improve your credit standing. Sometimes you have to go to multiple people or write numerous letters. But it will be worth it in the end if you can rid yourself of thousands of dollars of medical bills. If your own efforts don’t get you anywhere, get help from a third party, such as Access Project (http://www.accessproject.org) or Medical Bill Advocates (http://www.billadvocates.com). For those with hefty hospital bills, The Access Project’s Medical Debt Resolution Program can guide you through the maze of negotiating with insurance companies, medical providers and public programs to resolve your medical debt.

How to Handle Overdue Hospital Bills (ybpguide.com)
Can I get a medical collection removed from my credit report? (askamoneyexpert.com)

Is it a Good Idea to Pay Extra on My Mortgage for an Early Payoff?

Author: The Money Coach

Q: Is it a Good Idea to Pay Extra on My Mortgage for an Early Payoff? How Much Do You Advise to Put Every Month to Pay a $300,000 Mortgage Down in 10 Years?

A: If you can afford to do it, yes, it is a good idea to pay extra toward your mortgage and pay your house off early. The one caveat I would say, however, is to make sure that you’ve taken care of what I call “the financial basics” first. This means paying off excessive credit card debt, having at least a three month cash cushion set aside for emergencies, creating a will, and protecting yourself with both life and disability insurance. Once those things are taken care of, by all means, start throwing extra money at your monthly house note to own your home free and clear as soon as possible.

Paying Down a $300,000 Mortgage

You asked about paying “down” a $300,000 mortgage, and I assume you meant just that – paying a big chunk of it down, and not paying it completely off. If you acquired your home anywhere from 1 to 10 years ago, and got your standard 30-year mortgage, paying it off in just 10 more years would mean you’d likely have to nearly double your current payments. On the other hand, if you’ve owned the home for some time, and want to accelerate your payments so that you can, indeed, have it paid off entirely in 10 years, then that may be financially doable without such a huge increase in payments. One big variable in all this is also the interest rate on your home loan. Since I don’t know how any others facts outside of the payoff amount – $300,000 – and your desired time frame (10 years), I’ll briefly describe two payment options, and then point you in the right direction for further information, where you can run multiple scenarios based on your exact circumstances.

Mortgage Payments are Always Front-Loaded

According to Bankrate.com, to pay off in 10 years a $300,000, 6% home loan means your monthly payments would need to total $3,331. By comparison, a 30-year mortgage, also for $300,000 at 6%, would have payments of $1,799. But remember, mortgage payments are very front-loaded, so that you pay more in interest charges in the early years, as opposed to paying down the principal on the loan. In fact, after 10 years of paying on a 30-year mortgage, you’re likely to have knocked off just 13% to 17% of your principal balance. It typically takes about 17 to 19 years of paying a mortgage before your payments start being mostly applied to principal instead of interest.

Use Online Mortgage Calculator

Use this mortgage calculator on Bankrate.com: http://www.bankrate.com/calculators/mortgages/mortgage-calculator.aspx.

It will allow you to play around with different payoff scenarios for your mortgage. By doing so, you’ll see how many tens of thousands of dollars you can save by applying extra payments to your mortgage, and paying it off sooner rather than later.

At 63 years old I am ready for retirement. What should I do?

Author: The Money Coach

Q: I am Almost 63 Years of Age and Thinking of Retirement. What Should I Do at the Present Time to Make this a Reality in 2 or 3 Years? I am a Registered Nurse Working Full Time in a Hospital.

A: Retiring in two to three short years from now means you’ve got to ensure that your financial affairs are in good shape, and that you will have enough money on hand to last you another two or three decades. Many financial planners create plans for their clients on the assumption that the client will live until 90 or 100 years old. So you have to consider whether, if you retired at age 65 or 66, you would have enough money to last for potentially another 30 years.

Max Out that Retirement Plan at Work

Start by looking at what you’ve saved in your retirement plan at work. If you haven’t been aggressively saving in a 401(k) or 403(b) plan, by all means start doing so. Perhaps your employer offers a match to boost your retirement plan. Under federal law, most employees can put up to $16,500 into a qualified retirement plan in 2010. However, since you are over 50 years of age, you can also put into another $5,500 in “catch up” payments if you’ve been a late starter, in terms of saving. You can also sock money away into an IRA, or Individual Retirement Account. The 2010 limit for regular IRAs and Roth IRAs is $5,000, plus another $1,000 in allowable contributions for those 50 and above. Assess also any pension income or retirement benefits that will be provided directly by your employer. Then find out how much money you will be entitled to from Social Security. You can find out your expected Social Security payments by visiting the Social Security Administration’s website (http://www.ssa.gov).

Two Steps To Assessing Your Retirement Readiness

In summary, to make sure you are on track to retire when you want, you should follow these two steps:

Step 1: Calculate Your Retirement Needs
Think about what how much money you’ll need in retirement, on a monthly and annual basis. Take into account your projected monthly expenses, any debts you’ll have, along with the possibility of healthcare or medical costs, travel, as well as inflation. A good tool to use is the “Ballpark Estimate” retirement calculator from the American Savings Education Council at: http://www.icief.org/retirement/illustrations/ill_ballpark.html

Step 2: Estimate Future Benefits
After consulting your Human Resources Department or taking a look at any employer-provided pension income you may be expecting, go get an estimate of your Social Security benefits at http://www.ssa.gov./estimator.

If you don’t like what you see in the results, all is not lost. You have the option of working a bit longer, perhaps investing slightly more aggressively if you are comfortable doing so, or even using products like annuities that can offer you a steady income stream or make up for any financial shortfalls you may face.

Making the Most of Your Social Security Benefits (askamoneyexpert.com)

How Can I Lower My Income Taxes?

Author: The Money Coach

Q: How Can I Lower My Income Taxes? My Wife and I Make About $140,000 Combined a Year. We have Two Young Children. We Live in Massachusetts. We Owed Money Last Year and This Year We Owe About $4,600.

A: I know it hurts to get a big tax bill, and it’s not fun to find out that you owe the government nearly five thousand bucks. But there are some ways you can start to lower your taxes in the future. Here are six strategies I’d recommend:

Adjust Your Withholdings At Work
Since you said that you owed money last year also, and that your wife was recently laid off for two months, it very well could be the case that your W-4 withholdings need to be tweaked at work – possibly at both of your places of employment. In essence, you need to adjust your withholdings so that more taxes are taken out over the course of the year. Even though this is still paying taxes, it’s spread out. So you’re less likely to feel the sting of it. Also, by prepaying the proper amount of taxes due over the year, you’ll avoid those nasty IRS penalties for under-payments. Publication 919 from the IRS has more details about properly adjusting your withholdings to that you don’t wind up paying too much tax. The IRS also has a Withholding Calculator available online. Click the following link for more info. http://www.irs.gov/individuals/article/0,,id=96196,00.html.

Max Out Your 401(k)
If you have a 401(k), a 403(b) or any other type of employer-sponsored retirement plan, try to contribute the maximum allowable. Not only might you get a matching contribution from your employer, but you will also reduce your taxable income because money put into a 401(l) plan is contributed on a pre-tax basis. In 2010, the maximum contribution for a 401(k) plan is $16,500. People who are 50 and older can put in an additional $5,500.
The 2010 maximum contribution amount is $5,000 for IRAs, and an additional $1,000 contribution to an IRA is allowable for those 50 and older. So max out that 401(k) plan. Ditto for your wife at her job.

Take Advantage of Health Savings Accounts and Flexible Savings Accounts
If your company has a Health Savings Account, and you haven’t already done so, do sign up for it. Since you have two young children, you can contribute up to $6,150 to an HSA on a pre-tax basis. If you’re going to have to pay for certain health-related costs anyway, why not get a tax break for doing so? Do the same thing with a flexible spending account, which currently has a maximum contribution of $5,000. So get prepared for your next open enrollment season at your job, when you’ll be able to make 2011 selections for your FSA.

Itemize and Boost Deductions
One other way to lower your taxes is to ramp up your deductions. If you don’t take the standard deduction, you obviously need to itemize your deductions. This calls for some good record-keeping. Even though many taxpayers could benefit financially from itemizing their deductions, the IRS reports that lots of people don’t do it – simply because of the extra work involved.

To boost your deductions, here are some ideas about what you can claim:

•   charitable contributions
•   mortgage interest
•   interest on student loan payments
•   business use of a home
•   state, local and foreign income taxes
•   real estate taxes
•   personal property taxes
•   state and local sales taxes
•   qualified motor vehicle taxes
•   any estimated taxes you paid to state or local governments during the year
•   any prior year’s state or local income tax you paid during the year
•   miscellaneous deductions (in excess of 2% of your adjusted gross income)

In your case, your 2010 miscellaneous deductions could be significant. Since your wife was recently out of work, she can claim job-search expenses (like resume preparation, headhunter services, postage for mailings, unreimbursed travel and hotel bills for interviews, etc.). Under the category of “miscellaneous deductions,” you can also take deductions for things like tax and investment advice, as well as unreimbursed employee expenses.

Fund a 529 Plan for Each of the Kids
Since you mentioned having a 5-year-old and an 8-year-old, it’s possible that you’ve already thought about saving money for their future. One great way to do it is by opening a 529 Plan. That’s a state-sponsored college savings plan. Money invested in a 529 plan grows tax free and when you later take the money out to pay for college, the appreciation or gains that have been racked up in a 529 plan are also tax free. Best of all, many states offer a tax deduction for 529 Plan contributions. In 2009, you could put up to $13,000 in a 529 plan without triggering any federal gift taxes. In Massachusetts, where you live, unfortunately there is no direct state tax deduction or credit for contributions. However, according to SavingforCollege.com, which offers great information about 529 plans, Massachusetts does exempt qualified distribution from 529 plans, in conformity with federal law. The state also allows for tax-free treatment of 529 rollovers (i.e. earnings rolled into or out of a 529 plan). Again, if you’re already saving for your kids’ college education, or had planned to do so, you can get some serious bang for your buck with these tax-advantaged 529 plans.

Professional Help Wouldn’t Hurt
In addition to the strategies I’ve just recommended, as a practical matter, it would certainly not hurt you to also do some front-end planning with an accountant or financial advisor. This means you should get going now on tax-reduction activities, ahead of the April 15th tax filing deadline, and continue to make some smart money-moves all year long. A qualified CPA or other tax/financial expert should be able to review your overall financial picture, and give you even more specific advice about how to lower your tax bill.

If you use all these options, chances are by the time next year rolls around, you won’t find yourself having to write yet another big check to Uncle Sam.

Ask The Money Coach

Posts Tagged ‘Insurance’

Where can I get a list of agencies that can help me pay my medical bills?

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Is it a Good Idea to Pay Extra on My Mortgage for an Early Payoff?

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At 63 years old I am ready for retirement. What should I do?

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How Can I Lower My Income Taxes?

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Ask The Money Coach

Posts Tagged ‘Insurance’

Where can I get a list of agencies that can help me pay my medical bills?

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Is it a Good Idea to Pay Extra on My Mortgage for an Early Payoff?

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At 63 years old I am ready for retirement. What should I do?

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