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When student loan forgiveness plans might not be worth it

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How to talk to your kid about paying for college

I have made five years of income-based student loan payments under the Public Service Loan Forgiveness plan during my residency and fellowship. But now I owe close to $450,000 even though I only borrowed $320,000. I would like to continue paying under this plan, but the interest would explode. I am starting a new job at a non-profit hospital with a $356,000 salary. What do I do? — Anonymous

Choosing the best student loan repayment plan can feel like gambling with your future.

Those with big debts, especially doctors and lawyers, may be tempted to lower their payments by enrolling in one of the government’s income-driven plans. Not only does this offer immediate relief, but some plans will forgiven any remaining debt after at least 20 years.

But there’s a catch. It’s possible you’ll pay more over the life of the loan because your payments will be spread out over a longer period of time and you’ll be paying more interest.

“Sometimes we see borrowers so focused on the fact that they could get forgiveness, they don’t realize they may still end up paying back more,” said Betsy Mayotte, the president and founder of The Institute of Student Loan Advisors.

The overall goal is to pay the least amount over time, she said.

How much you end up paying overall can depend on some unknowns, like your future income, future job, and how many children you might have one day.

It can get confusing because there’s not just one income-driven plan. If you have federal loans, there are seven different variations. Plus, some people who work in public service will get their debt wiped away after 10 years of payments.

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Have a money question for Money Moves? Ask us here to be included in a future column.

Ask yourself these three questions before deciding what student loan repayment plan to select

Are you struggling to make your payments?

If you’re in a low-paying job, you might have to lower your payments in order to be able to make them. Depending on your income, your monthly payment could be as low as $0 on some plans.

That may sound great while you’re struggling financially, but you might not be paying enough to cover the interest. That means your balance will keep getting bigger.

Income-driven plans can make sense if you have either a lot of debt, a low income, several children — or some combination.

Many are based on your discretionary income, which considers your pay, your family size, and the state you live in.

Related: Is anyone actually getting public service loan forgiveness?

Will you make a lot more money in the future?

On many plans, your monthly payment will be a percentage of your income. So even though your payments may seem low at first, you’ll owe more as your income goes up.

Mayotte suggests using the government’s online repayment estimator at least once a year, or whenever you get a raise, get married, or have a child. (If you’re married and filing jointly, your spouse’s income will be considered when your monthly payment is calculated.)

It should tell you how much your monthly payments would be, the total amount you’ll pay back over the lifetime of the loan, how long it will take, and if you’ll be eligible for any debt forgiveness.

This can help you figure out if it’s worth increasing your payments. Remember, the longer it takes you to pay off, the more interest you end up paying.

Related: Should he pay off his student debt faster or invest?

How long will it take you to pay off your debt?

If you’re hoping to receive loan forgiveness, use the estimator to crunch your own numbers first. There is a chance that you might be finished paying off your debt before you’re due any forgiveness.

You must pay for at least 20 years on an income-driven plan before you’ll receive forgiveness. If you have loans for graduate school, you’ll have to pay for 25 years.

There’s another thing to consider. The forgiven debt will be taxed if you live in a state with income tax — unless you receive forgiveness from the Public Service Loan Forgiveness Program.

Related: Millennials explain why they have nothing saved for retirement

Those who work for a non-profit or the government may be eligible for forgiveness after paying for just 10 years on an income-driven plan.

Even with her new six-figure salary, the doctor who asked the question above could stand to save as much as $299,000 by staying enrolled in an income-driven plan.

But she must work for a qualifying employer all 10 years.

Have a money question for Money Moves? Ask us here to be included in a future column.

CNNMoney (New York) First published April 19, 2018: 11:29 AM ET

Many middle-class Americans plan to work until they die

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middle class retirement
Many middle-class workers plan to work throughout their old age, according to a recent Wells Fargo survey.

A growing percentage of middle-class Americans say they have saved so little for retirement that they expect to work into their 80s or even until they either get too sick or die, according to a recent survey.

Nearly half of middle-class workers said they are not confident that they will be able to save enough to retire comfortably, according to a Wells Fargo survey of 1,000 workers between the ages of 25 and 75, with household incomes between $25,000 and $100,000.

As a result, 34% said they plan to work until they’re at least 80 — that’s up from 25% in 2011 and 30% last year. An even larger percentage, 37%, said they’ll never retire and plan to either work until they get too sick or die, the survey found.

Driving these concerns is that many of the respondents said they simply can’t afford to pay their monthly bills and save for retirement at the same time.

Money 101: Planning for retirement

“For the past three years, the struggle to pay bills is a growing concern and the prospect of saving for retirement looks dim, particularly for those in their prime saving years,” Laurie Nordquist, head of Wells Fargo Institutional Retirement and Trust, said in a statement.

The concerns come as many middle-class families are trying to make do with less. The country’s median annual household income is down by more than 8% since 2007. And many of the jobs lost during the recent recession have been replaced with lower wage positions.

With minimal savings built up, a third of those surveyed said Social Security will be their primary source of income during retirement. Of those making less than $50,000, nearly half said they will rely mainly on Social Security.

In August, the average Social Security recipient received around $15,000 a year in retirement benefits, according to the Social Security Administration.

Related: Don’t let the government’s drama derail your 401(k)

Another factor holding back middle-class savers is a fear of investing in the stock market, said Nordquist.

Across workers of all ages, only 24% said they were confident in the stock market as a place to invest for retirement. And slightly more than half said they don’t invest in the stocks because they are afraid to lose their savings in the ups and downs of the market.

How I talk to my spouse about retirement

This is despite the fact that financial planners say that investing in stocks is the best way to grow a nest egg that will be large enough to cover decades of retirement. Over years of savings, short-term losses are overtaken by the long-term gains that years of compounded returns offer.

“There is a striking amount of fear about the stock market among all investors,” she said. “The middle class just isn’t making the link between being invested and the potential growth of their savings.

CNNMoney (New York) First published October 23, 2013: 2:00 PM ET

The case for and against gender quotas on corporate boards

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Why does the gender wage gap still exist?

In Europe, gender quotas are old news.

In 2003, Norway became the first country in the world to institute a gender quota for boards of directors, requiring listed companies to add female members to make up at least 40% of overall board representation. Other countries followed suit, including Belgium, France and Italy.

But in the United States, companies are loathe to institute gender and diversity requirements for membership, even as representation numbers continue to lag.

Margarethe Wiersema, professor of management at the University of California-Irvine, says the reason behind the hesitancy is very simple: Americans don’t like being told what to do.

“Europe is so far ahead of us. It’s like we’re in the Dark Ages on this,” she says. “I think it has to do with the mentality.”

Stalled progress

A bill making its way through the California legislature could make the Golden State the first in the country to mandate gender quotas on corporate boards. If Governor Jerry Brown signs it into law, publicly-traded companies headquartered in California would have to place at least one woman on their board by the end of next year, or face a penalty.

“Unfortunately, they do need this pushing and prodding because apparently, it was necessary,” says Paula Loop, assurance partner and leader at PwC’s governance insights center. “You need to push and nudge these folks to get there, but there’s an overwhelmingly positive result once they’re there.”

In Norway, the country judges its law to have been a success. With female members now making up 40% of board seats, overall diversity has increased as the disparity in board members’ pay decreased.

As for the effects on financial performance and other measures of success, some experts say more time is needed to assess.

In the United States, however, the stats are clear: while a majority of companies in the S&P 500 have at least one woman on their boards, only 25% have more than two, according to a study from PwC.

“I think we’re way out of step with the rest of the world and it would be great if we could make more progress on it,” Wiersema says. “Having spoken to a lot of female CEOs, they just can’t believe how little traction there is. This is not acceptable in their eyes, that we’re at this level. Especially when you look at other countries. It’s no longer just Scandinavia, it’s Spain, it’s Italy. It’s countries the US thinks we’re better than, and we’re not.”

Progress still to come

Opponents fear pressure from quotas will promote unqualified female members to prestigious seats, or even potentially discriminate against male candidates.

But there is no precedent for that, according to Ariane Hegewisch, program director for employment and earnings at the Institute for Women’s Policy Research.

“That definitely has not happened,” she says. “There’s no indication that that has happened and that it has in any way made governance worse … [but] there is research to show that companies with no women on their boards do not perform as well.”

Appointing merely one woman to the board isn’t enough to create progress, however, according to Alison M. Konrad, author of a 2006 study “Critical Mass on Boards.” Without female representation already in place on a board, some women are hesitant to be the first, she said.

“They didn’t want to go through the stigma of being the symbol,” Konrad says. “They wanted to be adding to the board because of their ability to contribute. From their experiences, the stigmatizing dynamic does occur. It’s hard enough to just be the first woman, without being the first woman who is slapped with a label that you’re there as a symbol.”

CNNMoney (New York) First published September 7, 2018: 11:42 AM ET

More people are saving $1 million in their 401(k)s. Here’s how you can too

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Planning young: a retirement roadmap

Saving $1 million for retirement may sound like an impossible task that not many people have achieved.

But about 157,000 people have saved at least $1 million in their 401(k)s with Fidelity, according to the company.

Another 148,000 had saved that much in an IRA.

Of those, 2,400 people had saved $1 million in both types of accounts.

So what’s the secret to becoming one of them? Time.

Most of these people are Baby Boomers who have saved for at least 30 years.

“I think the most important behavior is to start saving early,” said Katie Taylor, vice president of thought leadership at Fidelity.

That’s good news for Millennials. If you’re still in your 20s or 30s, you can set yourself up now to meet that goal with much less effort than an older person getting a later start.

People who’ve reached the $1 million mark also are saving a bigger percentage of their salary. Those with $1 million in their 401(k) are saving 24% of their salary each year — including both employer and employee contributions. Overall, the average 401(k) participant is saving 13%, according to Fidelity, the biggest plan provider by assets.

“The beauty of the 401(k) is that it takes the emotion out of investing,” said Chuck Cumello, president and CEO of Essex Financial.

Since money is taken out of your paycheck automatically, you’re less likely to try to time the market.

How do you stack up?

Less than 3% of Baby Boomers with a 401(k) at Fidelity have reached $1 million.

In 2016, working households aged 55 to 64 with retirement accounts had saved a median of $120,000, according to the Investment Company Institute.

It’s no surprise that those with higher salaries have saved more. Those older households who earned more than $171,000 a year had saved a median of $600,000 while those who earned less than $35,000 a year had saved a median of $18,000. (The report considered assets in all defined contribution accounts, including both 401(k) and IRAs.)

Related: Are you behind on your retirement saving?

How can you get to $1 million?

Not everyone will need $1 million for retirement, Taylor said. One rule of thumb is to save 10 times your ending salary. If you’re far away from retirement age, use an online calculator like this one to get an idea of how much you might need.

There are three common traits shared by those who have saved a lot of money in their 401(k)s, said Cumello.

1. Start saving early.

If you start at age 25, you’ll need to save $650 a month to have $1 million by age 65. But you’d need to save $1,200 a month if you wait to start saving until age 35 (assuming a 5% average return).

Calculator: When will I be a millionaire?

2. Work toward saving the maximum allowed.

First, save at least as much to get the full company match, Cumello said.

Then increase your savings rate until you hit the federal limit. This year it’s $18,500.

3. Pay attention to your investments.

Most 401(k)s have low-cost fund investment options. Cumello suggests investing in those to create a diversified portfolio. Avoid being too heavily invested in one stock.

Are you on track to save $1 million for retirement? Share your story with CNN Money.

CNNMoney (New York) First published May 29, 2018: 10:56 AM ET

Whatever happened to Trump’s crackdown on ‘the hedge fund guys?’

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Where is Trump's crackdown on 'hedge fund guys?'

Donald Trump vowed during the campaign to get rid of a tax loophole used by some millionaire and billionaire investors to slash their bills.

“The hedge fund guys won’t like me as much as they like me right now. I know them all, but they’ll pay more,” he said during a Republican debate sponsored by CNN in 2015. “I know people that are making a tremendous amount of money and paying virtually no tax, and I think it’s unfair.”

But the tax break, known as the “carried interest” provision, remains essentially intact in both the House and Senate tax bills now under consideration.

Related: Here’s what’s in the tax reform bill the Republicans just passed

Despite the popular impression that the carried interest provision is a break for hedge fund managers, it’s really private equity managers and real estate managers who benefit from it. It lets them pay a lower rate of just 20% on investment profits that are paid to fund managers, instead of the standard rate of nearly 40% for anyone in the top tax bracket.

Trump himself said that those benefiting from the break were “getting away with murder.”

“They pick a stock and all of sudden they make a lot of money. I want the hedge fund guys to pay more taxes,” he said.

But so far there is only one change in the carried interest provision in either bill. The proposed tax reforms stipulate that in order to qualify for the lower rate, the investments must be held for three years instead of the current requirement of one.

But anyone who benefits from the carried interest provision typically holds their investments for much longer than three years, said Steven Rosenthal, a senior fellow at the nonpartisan Tax Policy Center.

Related: How tax reform could affect families paying for college

“That’s a travesty,” he said. “It is a cosmetic change to make it seem like something is being done with carried interest when nothing is being done.”

The nonpartisan Joint Committee on Taxation, which tracks the impact of legislation, estimates that the change would increase revenue by only $1.2 billion over the 10-year period from 2018 to 2027, or $120 million a year.

The JCT estimate confirms that change in the law “on carried interest is a bad joke,” tweeted University of San Diego law professor Victor Fleischer. He made the tongue in cheek suggestion of having just a few of the top private equity mangers pay the top rate of 39.6%.

By comparison, a recent Democratic proposal to close the carried interest loophole was estimated to increase tax collections by $17 billion over 10 years, netting $1.6 billion in its first year alone.

CNNMoney (New York) First published November 27, 2017: 10:13 AM ET

Carl Icahn is from the mean streets of Queens

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atlantic city
Carl Icahn could keep another Atlantic City casino from going out of business, but he might back out of the deal because union workers won’t give up their healthcare plan.

The union can’t bully Carl Icahn. He’s from Queens!

Or that’s what he said, anyway, in an open letter to the Local 54 union, which represents casino workers in Atlantic City, NJ, where four casinos have closed and 8,000 workers lost their jobs, just this year.

“I grew up on the streets of Queens,” wrote Icahn, one of the best-known activist investors. “I learned to fight bullies and that was great training because I later built my fortune fighting the establishment — mostly CEOs and boards that I felt were taking advantage of the shareholders.”

Icahn said he was going to invest $100 million in the Trump Taj Mahal, and save it from becoming the next casino to go out of business.

However, he said he would do it only if the union agreed to give up health care benefits.

So far, the union has refused.

Icahn said he would pay each worker an extra $2,000 and they would be eligible for Obamacare or Medicaid.

(Though Icahn refers to it as the Trump Taj Mahal, the casino doesn’t carry Donald Trump’s name any more.)

Related: The Donald tears his name from Trump Taj Mahal

Icahn said the union is stalling the deal.

“The Taj Mahal is quickly running out of money and will almost certainly close,” he wrote. “Reprehensibly, the union, instead of working with … the company to keep the Taj Mahal alive, is instead doing everything to destroy the possibility of saving the jobs of almost 3,000 employees.”

The Taj Mahal casino is managed by Trump Entertainment Resorts, also is not owned by The Donald. The company also owned Trump Plaza Casino, also in Atlantic City, which went out of business.

Related: Macau trumps Vegas with hefty minimum bet

Icahn said the Taj Mahal was losing $7 million a month.

“I stated that my general rule is not to throw good money after bad,” Icahn said. However, if the company could get the concessions from the union, “I would consider doing my part,” he wrote.

The union was not immediately available for comment.

CNNMoney (New York) First published October 24, 2014: 10:40 AM ET

DACA students fear Arizona tuition ruling will force them to drop out of college

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My life with DACA: Preparing for deportation

Gilbert Olmos should be excited that he’s wrapping up his freshman year at South Mountain Community College and getting one step closer to his dream of becoming a registered nurse.

But instead he’s terrified his college education — and his dream — will come to an abrupt end.

Earlier this month, Arizona’s Supreme Court ruled that students who have gained legal status under the Deferred Action for Childhood Arrivals program can no longer receive breaks on tuition from the state’s colleges and universities. This means costs could almost triple for thousands of DACA status students in Arizona.

DACA has enabled nearly 689,000 young immigrants who were brought into the country as children to come out from the shadows and openly attend school and obtain work permits and driver’s licenses without the fear of being deported.

With his DACA status, Olmos qualified for in-state tuition. But just days after the ruling, he received an email from his school saying his tuition rate might change. In-state tuition is $86 per credit hour at Maricopa Community Colleges. Out-of-state it’s $327 per credit hour. For Olmos, this means his cost per semester will jump from a little more than $1,000 a semester to the out-of-state rate of more than $5,000.

“I fell apart as soon as I heard it,” said Olmos, 19, who is pursing an associate’s degree in applied science at South Mountain in Phoenix.

Related: Despite DACA uncertainty, Dreamers still determined to go to college

He was planning to get his associate’s degree, then transfer to University of Arizona for his bachelor’s before heading to nursing school.

“I’m a hard working student. I’ve been working retail jobs to pay my tuition myself,” said Olmos, whose parents brought him to the United States from Mexico when he was a year-and-a-half old. “Realistically, with the new rates I might not be able to afford college.”

gilbert olmos
Gilbert Olmos said he won’t be able to afford college because of the hike in tuition rates for DACA status college students in Arizona.

If he does have to drop out, Olmos has a temporary backup plan. He’s a certified phlebotomist, trained at drawing blood from patients. Olmos took the six-month course after graduating from high school.

“I would probably have to do this full-time until I figure things out with my education,” he said.

There are currently 2,000 DACA status students enrolled in the Maricopa Community Colleges network, which includes 10 colleges in the Phoenix area.

“Right now we are telling them their tuition might be impacted, but we’re not sure yet when it will go into effect,” said Matthew Hasson, a spokesman for Maricopa Community Colleges.

He acknowledged the higher tuition rates could force students to drop out completely.

“These are wonderful people and some of our best and most hard working students,” said Hasson. “We are working tirelessly to find some way to help them because we don’t want them to leave. At the same time, we know we have to comply with the court ruling.”

My dream has been ‘jerked out of my hands’

Dreamers don’t have permanent legal status, or a path to citizenship, so they aren’t eligible for federal student aid either. Therefore, they must pay for college either on their own, through private donors or rely on scholarships.

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Ana Ascencio is worried about losing her full scholarship from TheDream.US because of the Arizona Supreme Court ruling.

That’s how Ana Ascencio, 18, paid for her freshman year at Maricopa’s GateWay Community College, where she’s a political science major. She received a full scholarship from TheDream.US, a nationwide scholarship fund that helps DACA status immigrants attend one of 75 colleges in 15 states.

But now even her scholarship is in jeopardy.

One stipulation of TheDream.US’s scholarships is that the student be eligible for in-state tuition rates at one of its partner schools.

Ascencio, who came to the US when she was four from Mexico and grew up in Arizona, was eligible for in-state tuition and the scholarship last year. But now she — like the 150 other TheDream.US scholarship recipients in Arizona — doesn’t know if she’ll be eligible for either.

“We are currently working with Maricopa County Community Colleges and Arizona State University to find an affordable path forward for our Arizona scholars to support them in completing [their] college degrees,” said Candy Marshall, president of TheDream.US.

Ascencio wants to go to law school and become an immigration attorney, but everything seems uncertain.

“This court ruling is so surreal. My heart sank and I cried so much when I heard the news,” she said. “My whole college education dream has been jerked out of my hands.”

Related: Who is covered by DACA? Teachers, caregivers and more

Vasthy Lamadrid feels the same way. She is a senior at Arizona State University and is majoring in political science and pursuing a teaching certificate. She has lined up a job that begins in the fall that counts toward her certification.

“I’m scared,” she said. “If my tuition rates jumps and I can’t pay the out-of-state rate, I can’t continue with my teaching certification program in the fall.”

vasthy lamadrid
Vasthy Lamadrid, a DACA-status student at Arizona State is pursuing her teaching certification.

Currently, the in-state tuition rate for undergraduates at the school is $10,792. Out-of-state students pay more than double that at $27,372.

Lamadrid said school administrators have said they want to help DACA students but she’s aware that the school also has to comply with the ruling. She attended a meeting late Thursday with students and faculty where DACA students were told they should expect the new tuition rates to begin this summer.

Arizona State University did not respond to multiple requests for comment.

Lamadrid said she knows many other DACA students at Arizona State who have plans for postgraduate and other advanced degrees. “This ruling will put a halt to these goals,” she said. “Some have already been accepted into those programs. Now they don’t know what to do.”

CNNMoney (New York) First published April 21, 2018: 10:18 AM ET

Pensions ask retirees to pay back tens of thousands

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carole grant pension recoupment
Carole Grant, 75, has been told she owes almost $61,000 for nearly 20 years of pension overpayments.

Some pension plans have overpaid retirees for years — now they’re demanding their money back.

For retirees, it can mean owing tens of thousands of dollars. And with little warning, their pension checks are being slashed to cover their debt.

In April 2011, New Jersey resident Carol Montague received a letter from American Water Works Co.’s pension plan saying it had overpaid her for more than five years and wanted its money back — plus interest. Montague, now 67, was told she owed roughly $45,000.

Two weeks later, Montague’s pension benefits dropped from $1,246 to around $325 a month, or half what she should have been paid all along. The plan takes out roughly $300 a month in order to pay itself back.

Once Montague’s health care premium is deducted, her monthly pension check shrinks to less than $25. She gets another $1,200 a month from Social Security, but it’s not enough. So, in addition to her part-time job as a school crossing guard, she is working as a salesperson at Macy’s.

So far, Montague has repaid almost $9,000 — calculations show that she won’t repay her debt in full until 2024.

Share your story: Are you worried about your pension?

American Water said Montague signed a document verifying the correct pension amount and that they are legally allowed to collect any overpayment, with interest, to protect the viability of the pension fund. Montague acknowledges she made a mistake, but didn’t think she needed to confirm that her benefits matched the amount in the letter she had signed almost a year before she retired.

“I put it away in a steel box. I never looked at it again. It was stupid on my part,” she said. “But it took (almost) six years for them to find out they overpaid me?”

With the help of the Mid-Atlantic Pension Counseling Project, a government-sponsored program, she has appealed to the pension plan to waive the interest, as well as ease some of the overpayment burden. But the plan has refused.

As pensions face increased financial scrutiny — and shrinking funds — pension counseling programs are seeing even more cases like Montague’s.

This year, nearly 600 retired metal workers and their spouses are facing these so-called recoupment demands from the Sheet Metal Workers Local Union No. 73 Pension Fund, based outside of Chicago.

Related: Will your congressman retire richer than you?

In a letter sent to the pension recipients in May, the fund said a 2010 audit found that certain pensions were calculated incorrectly from 1974 to 2004, resulting in more than $5 million in overpayments, according to an IRS filing. The fund is now demanding that the retirees pay back decades worth of mistakes, including interest based on the plan’s rates of return.

In July, the pension fund reduced hundreds of checks to the proper payment amount and then again, to make up for the overpayments, often by as much as 25%.

Since the pension fund is forecasting that many of the retirees will die before their debts are repaid, it is asking many of them to make large upfront payments.

It’s unclear why the pension fund, which did not respond to requests for comment, waited several years to make the adjustments.

Carole Grant, 75, was told by the sheet metal worker’s plan that she owed almost $61,000 (roughly half of which was interest) for nearly 20 years of overpayments on the spousal benefits she received from her deceased husband’s pension. Her monthly benefit of $394 should have actually been $249, the pension fund said.

Related: Are you saving enough for retirement?

As a result, she’s been asked to make an upfront payment of $54,000 and her check has been reduced to $187 a month. While she has other sources of income, she doesn’t think she should have to turn over her retirement savings.

“I don’t feel that I should be penalized for the mistakes that they made,” she said.

Save money without a steady income

Karen Ferguson, director of the Pension Rights Center, a Washington D.C.-based advocacy group, said that, in most cases, retirees have no idea they are being overpaid since “the way a benefit is figured in a typical pension plan is impossible for an ordinary person to fathom.”

She called the sheet metal workers case the “most egregious” she’s seen, underscoring the need for federal regulations, such as imposing a statute of limitations and limiting how dramatically a pension check can be reduced. She also said many retirees don’t realize that plans rarely take legal actions to recover the lump sums.

Money 101: Planning for retirement

While some of the retired sheet metal workers have been able to get their debts forgiven or reduced by filing “hardship waivers,” many have had appeals denied, said Tim Kelly, an attorney representing some of the retirees.

One of his clients, 63-year-old Ed Cochran, has received a disability pension since 1995 and was told he owes the fund nearly $100,000, $42,464 of which is interest. His monthly checks had included an excess $262 a month.

Cochran paid years’ worth of income taxes and child support based on the amounts he received. And he’s heard of many retirees in worse financial shape than him.

“There are so many other older retirees who didn’t plan for rainy days,” Cochran said. “This is all they have.”

Have you received a recoupment demand? Visit the Pension Rights Center website for advice or for pension counseling referrals.

CNNMoney (New York) First published October 24, 2013: 6:59 AM ET

Moonves’ negotiated exit shows the power of #TimesUp

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Watch: Norah O'Donnell reacts to Moonves exit

Months have passed since celebrities first wore Time’s Up pins on the red carpet, but the advocacy organization hasn’t stopped fighting for women facing harassment.

On Sunday, Ronan Farrow published another bombshell investigation in The New Yorker. In his latest story, six new women accused CBS chief executive Leslie Moonves of sexual misconduct.

Moonves, one of America’s highest-paid CEOs, stepped down hours later — but still with hope of an eventual payout from his former employer.

“As of a couple of days ago, they were still talking about potentially letting him leave with a very generous exit package, up to the neighborhood of $100 million,” Farrow said on CNN. “Many of the women found that very, very frustrating. They felt this was a board that has let a powerful man who makes a lot of money for this company, in the words of one person, ‘get away with it.'”

Amidst rumors that Moonves would receive a multi-million dollar “golden parachute” package, Time’s Up, released a statement asking for “real change.”

In lieu of a rumored $100 million payout, Moonves and CBS will now donate $20 million to organizations that support the #MeToo movement and other groups fighting for workplace equity for women. That money will be subtracted from any severance money Moonves ultimately receives, and CBS has promised any payment to Moonves “will depend upon the results” of the ongoing internal investigations at CBS.

Time’s Up responded with a tweet: “A $20 million donation is a first step in acknowledging that you have a problem, @CBS. But it is far from a solution. You have $180 million set aside to pay Moonves. Use that money instead to help women. Cleansing the company of this toxic culture demands real systemic change.”

Progress made

Since January 1, Time’s Up has been hard at work creating some of that change.

In October 2017, stunning allegations against Hollywood heavyweight Harvey Weinstein spurred a nationwide reckoning on sexual harassment. In the following months, Time’s Up launched as a coalition advocating for victims of sexual harassment across all industries.

During awards season, celebrities walked the red carpet with Time’s Up pins and, most memorably, dressed in all in black for the Golden Globes.

Since then, the Time’s Up Legal Defense Fund has raised more than $22 million to help women fight cases of sexual harassment. The fund, housed and administered by the National Women’s Law Center, has so far received more than 3,000 requests from women seeking help with harassment in their own workplaces.

These women are reporting a variety of problems to the Legal Defense Fund: some are battling an unresponsive HR, others are struggling to reporting retaliation.

“We’ve seen a great outpouring of people looking for help,” says Sharyn Tejani, director of the Time’s Up Legal Defense Fund. “It’s people who have been harassed or assaulted at work years ago and are finally coming forward, it’s people who have had something happen to them at work and are not sure at all what to do … So it’s across the map, what we’re seeing.”

From there, Tejani says more than 700 attorneys have worked with Time’s Up to provide free initial consultations for victims. In some cases, Time’s Up works with attorneys to fund these cases as they make their way to court.

Progress still to come

But even when high-profile cases fade from the headlines, the #MeToo movement doesn’t have an end date, according to its leaders. In March at SXSW, Time’s Up founding member Nina Shaw said, “I think there are a bunch of guys waiting for this to be over. It’s never going to be over.”

In the months since, the Legal Defense Fund has continued to fight for the rights of low-wage workers. This summer it announced outreach grants for organizations supporting vulnerable communities. The grants educate workers about rights regarding sexual harassment and the reporting process.

“The important thing here is it started with these women in Hollywood, and then the connections were made that turned it into something broader, much larger and more expansive than that,” Tejani says. “While it may have started in one place, the focus is really on low-wage workers.”

CNNMoney (New York) First published September 10, 2018: 5:33 PM ET

4 tips for investing a big windfall in today’s market

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How to save $1,000 this year

I’m 53 years old and will soon come into a multi-million dollar sum that I need to manage properly for my retirement and for my children’s future. I’m not willing to just hand the reins over to anyone, but I also realize I’m not an experienced investor. I’d like to invest this money so it will continue to grow for all of us, but I don’t know where to begin. Any suggestions?—Lori

Figuring out how to invest a windfall to ensure long-term financial security can be a challenge at any time even for an experienced investor. But this isn’t just any time: interest rates have been rising, stocks have experienced some scary volatility lately and this bull market is looking a little long in the tooth as it enters its ninth year.

And, of course, you’re not a seasoned investor. So suffice it to say I think you’ve got your work cut out for you.

That said, if you go about this task in a thoughtful, methodical and disciplined manner — and are willing to seek help should you run into trouble — I think you should be able to invest this money in a way that can secure your retirement and perhaps your children’s future as well.

Here are four things I suggest you do to improve your chances of success:

1. Get a realistic handle on how much risk you’re willing to take.

If there’s one thing that differentiates a savvy investor from one who’s just winging it, it’s the ability to balance reward vs. risk. Clearly, you want to earn returns high enough to help you attain your financial goals. But you don’t want to take on so much risk that you expose yourself to losses you’re unable to manage.

It would be nice if you could anticipate market selloffs and bail out of stocks just before prices nosedive. But no one’s crystal ball is that good, at least not consistently. Instead, your goal should be to create a portfolio of stocks, bonds and cash that will allow you to participate in the gains when the market is doing well but also ride out market downturns during which stock prices can sometimes drop by half or more.

Your first step toward doing that is to carve out of your windfall enough cash for an emergency fund, basically enough so that a job layoff or large unexpected expense doesn’t force you to sell off investments and disrupt your long-term investing strategy. Whatever amount you decide is right to fund this emergency reserve, the money should go into investments that will hold their value even if the market gets hammered. I’m talking FDIC insured savings accounts, money-market accounts and short-term CDs. Yes, these cash equivalents pay very little. But security, not return, is your focus here (although you can still shoot for competitive returns by visiting sites like Bankrate, GoBankingRates and DepositAccounts).

Related: How should I invest my nest egg for maximum retirement Income?

As for investing the rest of your windfall, the key is deciding on a mix of stocks and bonds that will give you reasonable returns for the level of risk you’re willing to take. Achieving the right trade-off is a judgment call, but you can arrive at a blend of stocks and bonds that makes sense for you by going to this risk tolerance-asset allocation tool. The tool will suggest a mix of stocks and bonds and show you how various mixes have performed in the past.

That’s not to say you have to go with the tool’s exact recommendation. You can fine-tune it if you like. But except for occasional rebalancing, you should largely stick with whatever blend of stocks and bonds you go with. Don’t get into the habit of trying to shift your money around based on what you think (or what some market prognosticator predicts) the market is about to do.

2. Diversify, but don’t overdo it.

Once you know how you want to divvy up your windfall between stocks and bonds, you can focus on specific investments. Here, I recommend you keep it simple. The idea is to diversify so that you’re not overly dependent on the fortunes of just a few companies or sectors of the market, but at the same time not spread your money so widely that you have a hard time keeping track of and monitoring your investments.

There are a number of ways to get no muss-no fuss diversification. One is to create a portfolio of a few broad index funds. For example, combining a total U.S stock market and a total U.S. bond market index fund will give you exposure to virtually the entire U.S. stock and taxable bond markets. Throw in a total international stock and total international bond index fund and you’ll have a portfolio that’s broadly diversified both domestically and internationally. If you want to make things even simpler, you can invest in a lifecycle fund or target-date retirement fund, both of which do the allocation work for you by providing a pre-set mix of stocks and bonds based on your risk tolerance and/or age.

Related: 4 steps you should take when buying an annuity

You may be tempted to add even more investments to your portfolio. Indeed, some advisers contend that to navigate today’s markets you also need to own all manner of “alternative investments,” which could mean anything from commodity funds to private equity to cryptocurrency. My advice: tread very carefully. The more you start loading up your portfolio with niche investments, the harder it can be to manage, and you could end up di-worse-ifying rather than diversifying. Once you have a broadly diversified portfolio and cash reserve along the lines outlined above, I’d say the less you tinker with it, the better.

3. Hold the line on fees and expenses.

I can’t guarantee that sticking to low-fee investments will boost the returns you’ll earn. But Morningstar research on the predictive power of fees has shown that funds with low annual expenses generally outperform those with high costs. And by giving up less to fees and allowing more of your money to rack up gains and compound over the long term, the more money you may have for your retirement and, possibly, to pass on to your children.

Fortunately, it’s pretty simple to home in on low-fee investments these days. For example, you should have no trouble finding broad index funds that charge in the neighborhood of 0.25% or less a year vs. the 1% or more that many funds charge. And if you feel the need to look beyond index funds, you can single out actively managed funds with low expenses by revving up Morningstar’s Fund Screener.

4. Don’t be afraid to ask for help — but make sure you’re getting the right kind.

I get that you don’t want to turn over your windfall to an adviser. Still, given the amount of money involved here, it would be a shame if mistakes stemming from your inexperience were to jeopardize this shot at financial security for you and your family.

I’m not just talking about getting help with investments, although that’s probably the type of assistance that first comes to mind. You also need to think about a host of other planning issues, such as laying the groundwork for your eventual retirement, figuring out how much you can safely withdraw from your investment portfolio after you call it a career and arranging the best way to leave to your children any assets that may remain after you’re gone.

Getting help doesn’t mean you necessarily have to completely “turn over the reins,” as you say. Instead of paying someone to oversee your finances on an ongoing basis, you could instead go to an adviser for guidance on specific issues and pay by the hour. But whatever route you go, you’ll want to make sure that the amount you’re paying is reasonable — and that the person you’re dealing with is competent and trustworthy.

CNNMoney (New York) First published May 30, 2018: 10:21 AM ET

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