Kiplinger's Personal Finance - May 2018

7 GREAT GROWTH STOCKS TO BUY NOW BUY  NOW

Keep More Cash!  You  You may be wasting thousands of dollars every year. We show you how to fix your money leaks. ■

■

■

Skip insurance you don’t need Trim your yo ur investing costs

LAST CHANCE TO SAVE ON  YOUR  YOUR TAXES AXES p 49 +

Pull the plug on energy wasters

AND MUCH MORE

+

p 32

WHAT HOMES ARE WORTH WHERE YOU LIVE p 42 +

SMART NEW WAYS TO GIVE p 66 APRIL 2018

p 52

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IT’S ELECTRIC. IT’S GAS. IT’S BOTH WITH SUPER ALL-WHEEL CONTROL. Introducing the all-new 2018 Mitsubishi Outlander PHEV. The only plug-in hybrid electric vehicle crossover with Super All-Wheel Control, for superior handling and response in all road conditions.

THE WORLD’S BEST-SELLING PLUG-IN HYBRID CROSSOVER* STARTING AT $34,595.**

Visit MITSUBISHICARS.COM to see how much you can save. *JATO Dynamics global PHEV sales (September 2017). **Manufacturer’s Suggested Retail Price (MSRP) for 2018 Outlander PHEV SEL model. GT model with accessories shown MSRP is $40,665. Excludes destination/handling, tax, title, license, etc. Retailer price, terms and vehicle availability may vary. See your Mitsubishi retailer for details.

CONTENTS

KIPLINGER’S PERSONAL FINANCE FOUNDED 1947 VOL. 72 NO. 4

■ THE SOSOOS OF TEANECK, N.J., ARE PREPARING TO BUY A NEW HOME, EVEN THOUGH THE NEW TAX LAW WILL BOOST THEIR COSTS. PAGE 42

AHEAD 9 TOPIC A: What to make of the market’s turmoil . . . Beware closing-cost scams. 20 OPENING SHOT Should you invest in commodities? commodities ? by JAMES K. GLASSMAN. 24 SUCCESS STORY Farm living is the life for them, by PATRICIA MERTZ ESSWEIN. 25 MILLENNIAL MONEY  The power of living within your means, by MIRIAM CROSS. 26 LIVING IN RETIREMENT Get help with Medicare coverage, by JANET BODNAR. 28  CROWDSOURCING What was your biggest financial mistake? 30 YOUR MIND AND YOUR MONEY Tap into your emotions, by ANNE KATES SMITH.

MONEY    K    I    B    U    K    M    O    T

32 COVER STORY STOP WASTING MONEY Those little leaks that may seem like no big deal can add up to

big bucks down the drain. Here’s how to save on insurance, investing costs, tech and more.

64 PRACTICAL INVESTING What I bought when stoc ks tanked, by KATHY KRISTOF. KRISTOF.

42 HOME PRICES KEEP CLIMBING  Most areas are on the upswing, but rising interest rates and the new tax law may slow the market.

59 MORE ABOUT INVESTING Dividend 15 update (59). Kiplinger 25 update (63). Fund spotlight (65 (65). ).

COUNTDOWN OWN TO TAX TAX DAY You may 49 COUNTD still be able to save on your 2017 taxes.

LIVING

46  ASK KIM Insurance for home sharers, by KIMBERLY LANKFORD. 48  GAME PLAN How do I get in on a classaction lawsuit against Equifax?

INVESTING

66 THE NEW RULES OF PHILANTHROPY Fewer people will itemize under the new tax law, but our strategies will help you get the most out of your charitable giving. 71 TO YOUR HEALTH Keep out-of-pocket costs in check, by NELLIE S. HUANG.

GREAT GROWTH 52 TOMORROW’S GREAT STOCKS We found seven small and midsize companies with big potential.

IN EVERY ISSUE

YOU NEED TO KNOW ABOUT 60 WHAT YOU BITCOIN Don’t invest more than you can afford to lose.

6  LETTERS A run for your money.

58 INCOME INVESTING The silver lining of rising rates, by JEFFREY R. KOSNETT.

4 FROM THE EDITOR My investing misstep.

 TAKEAWA AWAY Y Is it taxable? Take our quiz. 72 TAKE

ON THE COVER: COVER: Photo-Illustration by C.J. Burton

04/2018

KIPLINGER’S PERSONAL FINANCE

1

 A retirement product is not a retirement plan.

What’s your game plan?  To get help with yours, visit

mutualofamerica.com or

call 1-866-954-4321.

Mutual of America and Mutual of America Your Retirement Company are registered service marks of Mutual of America Life Insurance Company, a registered Broker/Dealer. 320 Park Avenue, New York, NY 10022-6839.

FROM THE EDITOR

Mark Solheim

My Investing Misstep

B

ack in June 2000, this magazine ran an article titled “True Confessions,” which related the tale of one editor’s foray into the dark excesses of the dot-com-era stock market. The author, who chose to remain anonymous, confessed not only to investing in a number of wildly inflated tech stocks but also to buying them—  gasp —on margin. “In retrospect,” he wrote, “I admit that I succumbed to greed and hubris, betraying the principles of responsible investing by playing the ma rket with borrowed money.” If you haven’t already guessed, the author was me. Five years earlier, I had opened a Schwab account with $10,000, invested in Microsoft and a few other solid prospects, and watched the account grow to $100,000. That’s when the greed and day-trader mentality took over. I bought into the philosophy that corporate earnings didn’t really matter in the internet era, that momentum would propel popular stocks ever higher. I started investing in companies whose products and services I didn’t understand, and doing so with other people’s money. Then the market crashed, and I got not one but two margin calls. Volatility and valuation.

The same impulsive mindset that pushed stocks to the breaking point in 2000 has parallels today in the crypto4

KIPLINGER’S PERSONAL FINANCE

04/2018

currency markets. A lot of novice investors have been buying bitcoin, watching its value swing wildly up and down. Like stocks 20 years ago and home prices 10 years ago, cryptocurrencies have crept into watercooler conversations. When our UPS guy reported that he has bought in, we took it as a sure sign that bitcoin has entered bubble territory. In her cry ptocurrency FAQ on page 60, Nellie Huang points out t hat bitcoin has no revenue, no earnings and no underlying asset value, so prices are driven by demand alone. When an ordinary stock’s price rises, it’s usually based on expectations of earnings or revenue growth. At worst, she writes, bitcoin’s rise fits the

downdraft were threats of higher inflation and a rise in interest rates. But we don’t think the bull is ready to expire; it’s still supported by strong corporate profits and healthy economies around the globe. Some excess valuation has been wrung out of stocks, but as yields on Treasuries tick up, many stocks will be v ulnerable to selling, and you can expect more anxiety-producing trading days in the months ahead. If you’re buying, Anne recommends investing overseas and in sectors that won’t get socked by higher rates. And if you get queasy when stocks tumble, it’s a sign that you might want to pare back your holdings. My hard-won lesson.  Finally, please take

a look at “Crowdsourcing,” on page 28. The question we asked readers this time around was “What was your biggest financial mistake—and how did you recover from it?” As you now know, my biggest stumble was playing

 MY SCHWAB ACCOUNT BALLOONED TO $100,000. THAT’S WHEN THE GREED AND DAY-TRADER MENTALITY TOOK OVER. “classic definition of Wall Street’s ‘greater fool theory,’ and at best, it describes speculation, not investment.” It also reminds me of late ’90s blind investing because few investors understand its blockchaintechnology underpinnings. The stock market is easier to call. As investing editor Anne Smith explains in “Topic A,” on page 9, the triggers for the February

stocks like roulette nearly 20 years ago. I stayed out of the market for a few years while I licked my wounds, but my lesson in investing (and humility) has served me well. In 2008 and 2009, I took advantage of bargain prices to get back into the market. Now I am fully invested in a mix of stocks and bonds that I won’t have to tweak much until I am a couple of years from retirement—no matter which direction the market goes. ■

MARK SOLHEIM, EDITOR MSOLHEIM @KIPLINGER .COM TWITTER:

@MARKSOLHEIM

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LETTERS

great ideas. If invested wisely, an initial donation of $10,000 can increase in value and enable the donor to make gifts for years to come. Our donor-advised fund enables us to be more charitable than would otherwise be possible. Through it, we can support causes like the ones in your article. DAVID AND ROSEMARY REST WESTMINSTER, MD.

EDITOR’S NOTE:  We spotlight donor-advised funds in our article about charitable giving strategies. See “The New Rules of Philanthropy,” on page 66.

A vote for college coverage.

A Run for Your Money  Your story on great ideas for ways to spend your cash includes suggestions—all terrific—on giving back (“Great Ideas for $1,000, $10,000 or $100,000,” Feb.). Especia lly heartening is the idea to run for public office. By identifying the dollars needed for a candidacy for municipal office or a seat in a state legislature, you’ve provided us with a lesson in campaign financing—and some of us with a draft budget for stepping forward to serve. ANGELA S. LIPTACK RIDGEFIELD, CONN.

Q

READER POLL

How will you give to charity in 2018 if your gift isn’t tax deductible? Continue to give, regardless of tax deductions

66% Give less

20% “Bunch up” donations to get some tax break

11% Via a donor-advised fund

3%

We were disappointed that you did not include donoradvised funds as one of your 6

KIPLINGER’S PERSONAL FINANCE

04/2018

To learn how you can maximize your charitable giving under the new tax law, turn to page 66.

Mark Solheim’s column suggests your (presumably older) readership doesn’t appreciate your college articles (“From the Editor,” Feb.). I am 69 and retired, yet I value this kind of coverage very much. Many of us have college-age children, and I have found this coverage very valuable in helping to select a college for my daughter, as well as in finding an appropriate 529 plan. DON LEONARD BROOMALL, PA.

Fraud restitution. A big thank

you for Thomas Blanton’s article “Relief for Fraud  Victims” (“Ahead,” Feb.). My mother was scammed in 2008, thinking her grandson needed money. When she discovered the scam, she filed a police report, but nothing came of it (she passed away in 2016). Imagine my surprise to read that there could be restitution. I visited the Federal Trade Commission website

mentioned in the article, then called the FTC to have a representative walk me through the process. I know my mother would be very happy to think that her grandson might get the money after all! A.R. SEATTLE

Keep ’em coming. I just felt

compelled to tell Janet Bodnar how much I enjoy her articles (“Living in Retirement,” Feb.). Great insight always, and her delivery may be even better. I know she’s semi-retired, but I can sincerely ask: Please don’t quit your day job. CARL ROHRER FREDERICK, COLO.

An honest investor. I respect

Kathy Kristof’s advice because of her honesty. It is so refreshing to find a stock columnist who admits to having a few losses (“Practical Investing,” March). Many writers and talking heads boast about their gains but seem to never have a single loss. If they are such financial geniuses, why do they still need to work for a living by handing out advice? RICHARD COHEN BAYSIDE, N.Y.

LETTERS TO THE EDITOR

Letters to the editor may be edited for clarity and space, and initials will be used on request only if you include your name. Mail to Letters Editor, Kiplinger’s Personal Finance, 1100 13th St., N.W., Washington, DC 20005, fax to 202-778-8976 or e-mail to [email protected]. Please include your name, address and daytime telephone number.

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See Fidelity.com for more details.  § Barron’s, March 20, 2017 and March 19, 2016 Online Broker Surveys. 2017: Fidelity was evaluated against 15 others and earned the top overall score of 35.6 out of a possible 40. The firm was also named best online broker for Long-Term Investing (shared with 2 others), Best for Novices (shared with 1 other), and Best for Investor Education (shared with 2 others). Fidelity was also ranked 1st in the following categories: Trading Experience & Technology (shared with 2 others), Mobile (shared with 1 other), Research Amenities, and Portfolio Analysis and Reports (shared with 2 others). 2016: Fidelity was evaluated against 15 others and earned the top overall score of 34.9 out of a possible 40.0. 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Portland Lighthouse

EDITORIAL

Knight A. Kiplinger Mark K. Solheim EXECUTIVE EDITOR Anne Kates Smith MANAGING EDITOR Frederic Fane Wolfer SENIOR EDITORS Eileen Ambrose , Sandra Block, Jeffrey R. Kosnett EDITOR AT LARGE Janet Bodnar SENIOR ASSOCIATE EDITORS Daren Fonda, Nellie S. Huang, Marc A. Wojno (research) ASSOCIATE EDITOR Patricia Mertz Esswein STAFF WRITERS Miriam Cross, Ryan Ermey, Kaitlin Pitsker CONTRIBUTING EDITORS Lisa Gerstner, James K. Glassman, Kathy Kristof, Kimberly Lankford OFFICE MANAGER Glen Mayers EDITOR IN CHIEF EDITOR

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1100 13th St., N.W., Suite 750, Washing ton, DC 20005 (202-887-6400) W.M. Kiplinger (1891–1967), Founder Austin H. Kiplinger (1918–2015), Former Chairman and Editor CHAIRMAN, PRESIDENT AND PUBLISHER Knight A. Kiplinger EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER Corbin M. Wilkes SENIOR VICE PRESIDENT AND CHIEF O PERATING OFFICER Denise M. Elliott SENIOR VICE PRESIDENT AND CHIEF CONTENT O FFICER Kevin McCormally VICE PRESIDENT, CONTENT Sarah Stevens

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KIPLINGER’S PERSONAL FINANCE (ISSN 1528-9729) is published mont hly by THE KIPLINGER WASHINGTON EDITORS INC. Editorial & Execu tive Offi ces: 1100 13th St., N.W., Suite 750, Washington, DC 20005 (202-887-6400). Subscription Center/Customer Service: Visit us online at kiplinger.com/customer-service, call 800-544-0155, or e-mail [email protected]. POSTMASTER: Send change of address to: Kiplinger’s Personal Finance, P.O. Box 62300, Tampa, FL 33662. GST# 123395253. Volume 72, Issue 4. Copyright © 2018 by the Kiplinger Washington Editors Inc. Periodical posta ge paid at Washington, DC, and at additional mailing offi ces. Subscri ption prices: In U.S. and possessions $23.95 for one year, $39.95 for two years, $54.95 for three years. Additional international postage: $17.00 per year. Single-copy price: $4.99.

AHEAD

TOPIC A

WHAT TO MAKE OF THE MARKET’S DOWNTURN The bull market lives, but it will stumble again. Here’s what to do now. BY ANNE KATES SMITH

FOLLOWING A STOCK MARKET

correction that seemed to come and go in the blink of an eye, investors are hoping that the worst is behind them—but many aren’t convinced. Their anxiety is well founded. To be clear, with no recession on the horizon, we don’t think the bull market is over. But more scary downdrafts are likely, and some tweaking of your portfolio may be in order. Just shy of its ninth birthILLUSTRATION BY JOE ANDERSON

day, the bull market took a breather in late January and early February, sinking a little more than 10% in less than two weeks. That was the first official correction (defined as a drop of 10% to 19% from a peak) in two years. The downturn may have been exacerbated by a flash-crash-style meltdown in exchange-traded funds that had bet against volatility. But there was nothing mysterious about the funda-

mental triggers: threats of higher inflation and a rise in interest rates. “The secret sauce of this bull market has been the economy’s ability to grow without aggravating inflation or sparking higher interest rates,” says Jim Paulsen, chief investment strategist at the Leuthold Group, a market research firm in Minneapolis. “That’s changed.” Inflationary pressures are coming from wages that are starting to rise in a tight labor market. More pressure might arise from the fiscal stimulus of tax cuts and increased spending on infrastructure a nd defense.  Yields on 10-year Treasuries jumped from 2.5% in the beginning of 2018 to 2.9% recently, and Kiplinger forecasts that they could trade

at 3.3% at year-end. “Now that rates have picked up and the threat of inflation is on the rise, it makes investors less secure in owning stocks at elevated prices,” says Sam Stovall, chief investment strategist at research firm CFRA. The bull market still has strong underpinnings. Confidence among corporate executives and consumers alike is sky-high, global economies are on a synchronized growth track, and corporate profits— buoyed by lower tax rates— are forecast to increase a remarkable 18% this year. “Once I’m convinced that a recession is coming, it’s over. Short of t hat, a correction is a buying opportunity,” says Paulsen. Another jolt is almost 04/2018

KIPLINGER’S PERSONAL FINANCE

9

AHEAD

certainly on the way. Going back to 1950, Stovall found 25 calendar years in which stock prices fell by 5% to 20% (more than 20% would be a full-fledged bear market). In five of those years, the market turned down three times, and in three of the years—1980, 1988 and 1997—the market logged four pullbacks of 5% or more. Last year, Standard & Poor’s 500-stock index logged one-day price swings of 1% or more on only eight occasions; the law of averages says to expect 50 such days this year. What to do. Use the volatil-

ity to position your portfolio wisely. Stocks overall will represent good value if the S&P 500 sinks below 2500, says Paulsen. He recommends thinning out interestrate-sensitive sectors— utilities, real estate investment trusts and telecommunication firms. Focus on stocks that prosper when the economy is growing and inflation is ticking higher, including energy, industrials, raw materials and tech. Consider investing 5% of your portfolio in a commodity fund, says Paulsen. Make sure you have some money invested overseas, where markets are cheaper and economies are growing but far from overheating. Lastly, think of the recent market mayhem as a dress rehearsal for the next bear market. If your stomach churned and you couldn’t sleep at night, it’s a sign that you need to reevaluate your stock holdings in relation to your risk tolerance and your stage in life. 10 KIPLINGER’S PERSONAL FINANCE

04/2018

INTERVIEW

HOW TO COMPLAIN AND GET RESULTS Keep your cool, create a paper trail and take it all the way to the top if you need to. Christopher Elliott is the  founder of www.elliot.org, which helps consumers resolve disputes with businesses, free of charge. What’s the most effective strategy to get a satisfying resolution? Follow what I

call the three Ps. First is politeness. Take a deep breath, maybe wait 24 hours, and then contact the company. Avoid using emotiona lly charged language. If you say, “I’m a loyal customer, and it would make me really happy if you could address this one issue,” it’ll be much more effective than saying, “You destroyed my life, and my lawyer is preparing to file a lawsuit.” Second is pat ience. You’ll usually get a response that will ideally solve the problem within about a week. But if it’s an issue that requires a lot of research— say, involving an insurance claim—it could take six to eight weeks or longer. Third is persistence. Sometimes call centers are designed to make you go away. If you hit a brick wall, try to talk to someone higher up the food chain. What’s the best way to contact a company? Create a paper

trail, which provides written evidence that you’ve tried to fix the problem. PHOTOGRAPH BY DEREK ISRAELSEN

If you can submit a complaint on a form through the company’s website, start there. Put your message into one paragraph, if possible. Include a short timeline of events, such as the date you bought the product or service and when the problem occurred. You’ll more likely succeed with an issue that the company can fix right away, such as a hotel offering a voucher for a spa treatment during your stay because of construction noise near your room. Go over the rules sur rounding the purchase. Some hotel rooms and airline tickets are nonrefundable no matter what your personal circumstances are. And if the initial appeal doesn’t work? Write

to someone a little higher up. The typical hierarchy might include a customer service manager, then a vice president of customer service, then an executive vice presi-

dent and then the CEO. Names and e-mail addresses of executives at many major companies are on my website. If all else fails, you have two nuclear options: disputing the purchase on your credit card, if you used one, or going to court. Judges often side with consumers, but even if you win a judgment, companies sometimes make it difficult for you to collect the money. How can a customer avoid encountering a problem in the first place? If you know

about the product you’re buying, there’s less of a chance that you’ll be disappointed later. Read the ter ms of your purchase, such as the license agreement for a software product or the warranty on electronics or appliances. Check out product reviews. LISA GERSTNER

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1.60

%

 Live Oak Bank Savings Annual Percentage Yield (APY) is valid as of 1/ 31/2018. No minimum opening balance or deposit required to open. Rates may change at any time without prior notice, before or after the account is opened. No minimum balance to open, but customers must have a balance of $0.01 to earn interest. You may make up to 6 withdrawals from your Live Oak Bank Savings account per statement cycle, including preauthorized, automatic and telephone transfers. 1.

 National statement savings average rate courtesy of Bankrate.com’s Passbook & Statement Savings Study, as of 10/11/2017; survey is compiled semi-annually in April and October. 2.

©2018 Live Oak Banking Company. All rights reserved. Member FDIC

on necessities such as housing, food and transportation. But relocating to a high-cost area may make this gu ideline unworkable. The table below shows what you would pay for commonly used products and services in four cities that made the list of 20 finalists for Amaz on’s second headquarters—which is expected to add 50,000 jobs. We added Orlando because that area is attractive to retirees.  You can find a COLI calculator at www.pay scale.com/cost-of-livingcalculator. RIVAN STINSON

STICKER SHOCK

CHECK ALL LIVING COSTS BEFORE MOVING Home prices are just one factor you should consider when choosing a city.

IF YOU’RE A RETIREE LOOKING

for a change of scenery, or you’ve been offered a job in another city, you may want to consider more than  just the cost of housing. Prices for groceries, utilities, health care and other necessities can also var y significantly. For example, the average

cost of a doctor’s appointment in Rockford, Ill., is $139, compared with $75 in Bloomington, Ind., according to the Council for Community and Economic Research’s cost of living index, or COLI. The general rule of thumb is that you should spend no more than 50% of your budget      S      E      L      E      G      N      A      S      O      L

A SAMPLING OF COSTS IN FIVE CITIES      K      E   A      T    S

$

$

9.24

$

106.80

$

79.99

$

     S      A      L      L      A      D

12.44

$

11.82

$

10.44

91.22

$

96.14

$

96.42

     T     I   S      T      N      E      D $

410.11

    G      Y    I      N      R      D      N      E   A      L     C

$

449.88

9.88

$

13.15

$

$

$

443.70

387.28

$

10.34

$

8.62

$

8.63

10.60

$

13.20

$

428.97

$

8.73

$

     R      E      E      B $

COMPOSITE INDEX

 147.8

FOR 2017. COMPOSITE INDEX NATIONAL AVERAGE: 100.

12

     A      I      H      P      L      E      D      A      L      I      H      P

     D      N      I

12.10

$

     N     O     I      T      P    S     I      R     G     C      U    S      R      E      D      R      P

     S      I      L      O      P      A      N      A      I

     O      D      N      A      L      R      O

KIPLINGER’S PERSONAL FINANCE

04/2018

 95.3

 92.4

12.97

 117.0

$

10.03

 101.9

SOURCE: THE COUNCIL FOR COMMUNITY AND ECONOMIC RESEARCH

PAY TO PLAY

POPULAR PARKS GET PRICIER The National Park Service plans to more than double the peak-season entrance fees at 17 of its most popular parks, including Grand Canyon, Sequoia and Yosemite, as early as May 1. The proposal, which is expected to be approved by the NPS, will hike fees from about $25 or $30 per carload to $70 during the park’s busiest five months. Only 118 of the country’s 417 national park sites charge an entrance fee, so most will still be free to enter. If you frequent national parks that charge admission, consider buying an annual pass ($80 at federal recreation sites, $85 at Store.usgs.gov/pass). Park visitors who are 62 or older can purchase a lifetime pass for $80 in person or $90 online or by mail. Current members of the military and their dependents can receive a free annual pass by showing a military ID at a federal recreation site that issues passes. If you visit parks with admission fees only occasionally, look for fee-free days. The National Park Service waives entrance fees several times a year at parks that charge for admission, but be prepared for crowds. To learn more, visit NPS.gov/planyourvisit. KAITLIN PITSKER

     M      O      C  .      O      T      O      H      P      K      C      O      T      S      I

AHEAD

PHISHING EXPEDITIONS

BEWARE CLOSING COST SCAMS

CALENDAR 04/2018

Home buyers are being tricked into wiring their money to crooks.

 YOU’VE FOUND YOUR DRE AM HOUSE AND

made a winning offer on it. Now all that’s left is a transfer of funds to get you in the door. That’s when the closing-cost scammers strike. Posing as real estate or settlement agents, these con artists swindled home buyers out of nearly $1 billion last year, up from $19 million in 2016, the FBI says. The scheme works like this: Thieves hack into a real estate professional’s e-mail account to track upcoming transactions. When a deal’s closing date nears, they send the home buyer an e-mail that appears to come from the real estate agent or title company that’s handling the closing. The e-mail directs the home buyer to wire funds for the closing costs and the down payment to a fraudulent account. To protect yourself from this scam, don’t trust e-mails containing moneywiring instructions. Don’t click on links or call phone numbers provided in such e-mails, and don’t share your financial information with the sender. Talk to your real estate or settlement agent about the closing process and wire-transfer protocols. Once you’ve made the transfer, confirm that the funds were received. If you’re victimized, catching problems quickly increases your chances of getting the money back. THOMAS H. BLANTON 14

KIPLINGER’S PERSONAL FINANCE

04/2018

SUNDAY, APRIL 1 The Centers for Medicare and Medicaid Services will begin mailing new Medicare cards that are less vulnerable to ID theft. The new cards will contain randomly assigned numbers in place of Social Security numbers. The rollout will take up to 12 months, with old cards remaining active until December 31, 2019. Medicare beneficiaries should destroy their old card once the new one arrives.

▲

SUNDAY, APRIL 8

It’s National Library Week. Celebrate by checking out a book, either in person or through the Libby app (available for Apple and Android devices). Or take advantage of other services many local libraries offer, including coding classes, musical instrument rentals, and access to 3-D printers.

TUESDAY, APRIL 17 Today is the deadline to file your 2017 federal tax return or request an extension until October 15.

For last- minute ideas on how to lower your tax bill, see “Countdown to Tax Day,” on page 49.

MONDAY, APRIL 30 Prepare for speedier store checkouts. All credit card networks in the U.S.— including American Express, Visa, MasterCard and Discover—will no longer require merchants to get a signature from their customers for transactions. THOMAS H. BLANTON

*

DEAL OF THE MONTH

April is a good time to book cruise deals. The hurricane season starts in June, which means the months before then are often cheaper (without being as high risk for bad weather). Typically, that means great deals on any unsold cruise inventory. For example, you and another person could set sail for a week to Mexico for about $600, according to DealNews.com.

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n retirement, the less uncertainty, the better. Unfortunately, some events are impossible to predict, like changes to tax legislation or the direction of the stock market. But that doesn’t mean you can’t prepare. There are some areas of retirement planning where taking action now can reduce the risk of running out of money later.

Plan for tax changes Some taxpayers in high tax states like New York, California and New Jersey might be facing higher taxes because the tax law limits the amount of state, local and property t axes that can be deducted from federal income taxes. As a result, retirees—and soon-to-be retirees— should think carefully about where they  want to live. On the portfolio side, pay close attention to the account types you use for different investments. Your choices can have big tax consequences. � Tax-sheltered accounts are good for investments that pay dividends and interest because no tax is owed until the money is withdrawn. (If it’s a Roth, you never have to pay taxes on that income). � Taxable accounts, on the other hand, are better suited for investments such as growth stocks. That’s because those gains, when held in taxable accounts, are only taxed 15% or 20 % for most people.

Be smart about income One of the new tax law’s provisions raises the income level on higher tax brackets.  That will help alleviate income pressure in retirement by giving you added flexibility. You’ll now be able to take bigger  withdrawals from IR As and 401(k)s without moving into a higher tax bracket (at least until those changes expire in 2025). In addition, municipal bonds provide

interest free from federal income tax. Bonds from your home state also give  you a break on state income taxes.

Strike the right asset balance  Your mix of stocks, bonds and alternative investments, otherwise known as asset allocation, is the top driver of your portfo lio’s long-term returns. If your goal is to grow your portfolio for retirement so that it can support you for several decades,  you’ll want an asset alloc ation that’s his torically been able to achieve stronger returns. That generally points to stocks. However, as your age and life circumstances change, you’ll need to tweak  your asset allocation. What’s appropriate

“ Retirees should think carefully about where they want to live.” at 25 may carry too much risk when  you’re in your late 50s or early 60s.  The challenge is to find the ri ght balance between an asset allocation that feels comfortable and one that can outpace inflation, so you can maintain  your purchasing power throughout your retirement.

is just your first line of defense. Should disaster strike when you have little time to recover your losses, you may need to make other changes to your plan. For example, you might have to consider working longer, reducing your  withdrawals, or downsizing your retirement expectations.

Make contingency plans

Fixed, but flexible

Retirement planning isn’t just about what  you invest in, it’s also about timing. Just ask anyone who planned to leave the  workplace in 20 08 or 200 9. Even those  who had an appropriate asset alloc ation still saw their portfolio values fall due to the severe financial crisis. Of course, it’s nearly impossible to pre dict when the next bear market will strike. And that’s why an asset allocation that matches your age and time horizon

 A lot gets thrown at you during the decades you’re saving for retirement. Much of it is out of your hands . Focus on what  you can control, but also be aware of the things you can’t. That way, you’ll be ready for anything. � Personal Capital offers free online financial software, mobile apps and personal wealth management services. Learn more at www.personalcapital.com.