You may have been frustrated lately by financial institutions requiring two-factor authentication to log into your account. Instead of just requiring a username and password, they now send you a text message by SMS to your cell phone in to verify your identity with a six-digit PIN that you must enter to gain access.

But what if the number attached to your SIM card on your phone is itself stolen? You have your cell phone in your hand, but someone has gained enough information about you to contact the phone company, transferring your phone number into a phone sitting in their hand!

If it sounds impossible, think again. The FBI’s Internet Crime Complaint Center (www.IC3.gov) has seen a growing number of SIM swap fraud reports. It has happened to famous people, including television producer Andy Cohen (who told his story on “The Today Show”), and countless other victims, with reported losses in the millions.

Once a scam artist electronically transfers your phone SIM card, that two-factor authentication PIN goes to his phone — not yours. And when the thief confirms the transaction, all your money is wired out of your account to his account!

Even worse, when you finally wake up to the lost money, the bank says you are not covered for fraud, since they sent you a PIN and you (or in this case, the fraudster) entered the PIN, thereby “participating” in the fraud. They deny your claim — and your money is lost!

Here’s how it works

It’s easier than you think to get enough information about you to have your SIM card transferred electronically from your phone to another. You do it every time you upgrade and get a new phone.

But if your personal information (such as your pet’s name, street address or even your bridal registry) is easily searchable online, you could become a victim. The cybercriminal’s goal is to pretend they’re you by using that information to trick your cell phone service provider into granting access to your phone number and account. Then it’s as simple as porting your SIM to their device.

Then they call the phone company pretending to be you, saying your phone is lost, and asking to transfer your SIM to the new phone they are holding. Or, according to the FBI, they may bribe or blackmail low-level employees in telephone stores to transfer the numbers to new SIMs.

Once they control your phone number, it’s open sesame for all your financial accounts.

How to protect yourself

—Download an authentication app for your cell phone. Microsoft and Google offer them, as do many other companies. Since the app resides on your phone, the fraudsters cannot access it. You’ll have to set up two-factor authentication for that website — and then use this program instead of a SMS text message.

—Ask your cellphone provider to require extra steps for verification, such as a “SIM PIN,” before allowing your phone number to be ported. That is a multi-digit code that you’ll need any time you want to move your number to a new phone. Without the PIN, your number stays put.

—Use the “strong password” option that generates a random password for each of your accounts. Then store it in a “password manager” program such as Aura, Keeper or Dashlane. (Search for these apps and download them.) Then you only need to remember the main password that accesses your stored passwords.

Sadly, you can easily and inexpensively get all this sophisticated protection, but it won’t work if your financial institution insists on sending SMS text messages and doesn’t allow you to use an authenticator app. FBI Special Agent Ali Sadiq of the Cyber Criminal Investigative Squad says: “Banks need to catch up with best authentication practices — unfortunately, they are all still using SIM texts. Your email account that requires an authenticator may have far better security than your bank account.”

Still, it’s worth trying to derail the SIM swappers. Agent Sadiq reminds us: “You don’t need perfect security to avoid being victimized. By using something as simple as stronger authentication on your online accounts, criminals will likely skip over you and move to lower hanging fruit.” Well, I hope that’s The Savage Truth.

(Terry Savage is a registered investment adviser and the author of four best-selling books, including “The Savage Truth on Money.” Terry responds to questions on her blog at TerrySavage.com.)

Insurance companies have indeed been hit with more catastrophic losses in recent years. Some of it is related to climate change. Even though hurricane and earthquake coverage are not part of traditional homeowner’s insurance (and must be covered by separate policies), there are rising claims from wind and wind-driven water damage, as well as from hail.

Wildfires in California and tornadoes in the nation’s midsection have caused major losses. And the amount that insurers must shell out for construction costs to replace the insured property has soared with inflation. No wonder there are staggering premium increases. And no wonder that insurers are actually leaving some states where the risks are highest — or where state legislatures have demanded premium increase limitations.

According to the New York Times, “The data show that homeowners insurance was unprofitable in 18 states last year, up from eight in 2013.” For example, in Illinois, the study shows insurers have made money on homeowners coverage in just three of the past seven years. The state was affected by nine separate billion-dollar disasters last year, according to NOAA data, including seven severe storms.

If you want to see the statistics on state-by-state insurance losses, this link will let you search for your own state’s risk profile.

While there are good reasons for raising premiums, the insurance companies have been reporting rising profits, as well. Stocks of insurers like Allstate and Travelers are trading near all-time highs. It makes you think you should have bought the stocks as a hedge against your insurance bill!

What can you do?

When you get your much-higher property insurance bill, you have limited options. These include:

—Contact your insurer. Even if your bill is bundled with your mortgage payment, you can still ask them to verify their billing decision, based on your good payment record. Be prepared for no sympathy — but it’s worth a try.

—Compare premiums with other insurers. Several websites including TheZebra.com and HomeownersInsuranceCompare.com allow you to search online. But be prepared for a deluge of contacts from agents. And you may find that the “best” insurers aren’t taking on new customers, making it advisable to stick with the company with which you’ve built a track record. Also, if you change, your premiums could soar even more next year at the new company.

—Raise your deductible. If you’re wiling to shoulder more of the risk, you can significantly lower the premium. A higher deductible will be costly for a relatively minor event — but then you probably weren’t going to report it to your insurer anyway, for fear of a premium increase!

The most startling response I’ve seen is people simply dropping their homeowner’s coverage completely! Currently, about 7.5% of homeowners are uninsured — with a higher proportion in minority or low-income communities.

Going without homeowner’s insurance is a bet that you simply don’t want to take with your largest and most important possession!

First, if you have a mortgage, going without insurance is not an option. Your mortgage lender will demand proof of insurance or require the payment be made along with your mortgage payment. So you simply can’t cancel.

But even if your home is fully paid (nearly 40% of U. S homes are mortgage-free), going without insurance can be devastating to your future. You may think a tornado or fire is a long-shot that you’re willing to take without insurance. But your homeowner’s insurance is also the basis for your liability insurance — which protects you if someone is hurt on your property or sues for some other reason.

The whole point of insurance is to protect against those “long shot” events! And those rising premiums are evidence that the smart-money actuaries who work for the insurance companies believe the risks are rising. Betting against them by going uncovered is not a smart move. And that’s The Savage Truth.

(Terry Savage is a registered investment adviser and the author of four best-selling books, including “The Savage Truth on Money.” Terry responds to questions on her blog at TerrySavage.com.)

Student loan forgiveness extended

The deadline for applications for student loan forgiveness has been extended to June 30, 2024. This is the one-time income driven repayment (IDR) account adjustment, which has already seen $153 billion in student loans forgiven, and set millions of other borrowers on a path of lower monthly payments and eventual balance forgiveness.

The terms of this plan are so generous that anyone who has student loans (or parental PLUS loans) should be examining this opportunity. This one-time adjustment plan was designed to provide loan forgiveness for those who have been paying on undergrad loans for 20 years, or for those who have been paying on graduate school loans or PLUS loans for 25 years. It reduces current payments and accelerates total balance forgiveness.

To be eligible for this payment reduction or forgiveness, the first step is to do a federal consolidation of all your federal student loans and enroll in an IDR program (not a fixed payment plan). Even if you had months or years in forbearance, or were making lower monthly payments, all those months count toward getting your loans forgiven.

Once you consolidate, you’ll get a new monthly payment, based on your income. But even if you currently have a high income, if you have been paying for all those years, you might soon be eligible for forgiveness of the remaining balance, including all the interest that accrued. And if your loan is forgiven by 2026, all of the amount erased is tax-free.

Many parents have taken out PLUS loans for their undergraduate children. These also may be eligible for forgiveness. But whether you have one or more student loans, the first step is consolidation and then enrollment in an income-contingent repayment (ICR) plan. That paves the way for an analysis of when the balance may be forgiven. The decision is based on the signing parent’s income — as well as the number of years the loans were in repayment status.

Parents who have their own old student loans, as well as PLUS loans for their children now in college, will get a combined payment history with all loan balances reflecting that original start date — setting them up for forgiveness of the entire consolidated loan amount.

Yes, this is complicated. You can get details and worksheets at StudentAid.gov. But if there’s a lot of money involved and a short deadline, it may be worth paying for professional assistance. Attorney Rae Kaplan (www.FinancialRelief.com) has already succeeded in getting $19 million of loan balances forgiven for her clients — a number that will grow now that the deadline for completing the filing has been extended to June 30.

Supreme Court rules CFPB legally funded

The Supreme Court issued a long-awaited ruling against a challenge to the funding mechanism of the Consumer Financial Protection Bureau. The Court said the Agency could continue to be funded directly by the Federal Reserve, instead of by Congressional appropriation.

While waiting for this ruling (7-2 in favor), several new rules and regulations issued by this agency had been halted by lower courts. Now it appears those rules — many challenged by the financial services industry — will go into effect quickly.

The most notable is the CFPB’s rule that would have capped late credit card payment fees at $8. Currently, and until the rule goes into effect, card issuers can charge up to $30 for a first offense and up to $41 for subsequent late payments within six billing cycles.

The financial services industry, which collects roughly $10 billion in late fees, filed suit against the CFPB. Not only did they challenge the agency’s authority to impose the cap, but they warned the difference would be made up in other ways, such as higher interest rates on balances.

Bankrate.com analyst Ted Rossman notes that despite the current “stay” in the order, many card issuers have already implemented other fees, including a $1.99 monthly charge for receiving a paper statement.

Notably, Congress itself set up the CFPB and approved the current funding structure when it passed the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010. The agency has been aggressive in protecting individuals — so much so, that some in Congress and in business object. And that’s The Savage Truth.

(Terry Savage is a registered investment adviser and the author of four best-selling books, including “The Savage Truth on Money.” Terry responds to questions on her blog at TerrySavage.com.)

For 2024, the projected national average cost of assisted living is $5,665 per month, and far higher in major cities. The cost of in-home care — even part-time — could nearly double that amount.

Once you retire, the odds of needing that care increase dramatically. According to the Department of Health and Human Services, “70% of adults who survive to age 65 develop severe (long-term services and supports) needs before they die and 48% receive some paid care over their lifetime.”

A solution

My apology for scaring you with this reality check comes with a solution — a relatively new way to pay for long-term care insurance.

Long-term care insurance is expensive — and traditional policies are subject to increases in premiums. That’s led to more interest in a “combo” policy, which combines long-term care benefits with life insurance, so if you don’t need care, your beneficiary gets a death benefit.

The latest twist is a creative way to pay those premiums: You can use your IRA to purchase this policy, pay for it in full over 10 years, get your long-term care benefits tax-free — and have a death benefit if the care portion is not used.

Even better, this policy makes great sense for married couples, who get a big discount on the cost since it covers TWO lives!

The concept

Read this section carefully. It revolves around doing a tax-free rollover of a portion of your IRA retirement money into an annuity. (Note: this is NOT the investment annuities I’ve advised you to avoid.) Instead this annuity is designed to pay out once a year for 10 years to directly pay the premium on a life insurance policy that contains a long-term care insurance rider.

That annual distribution to pay the premium is taxable to you, so you’ll receive a 1099 for the annual amount. It can count as part of your RMD if you’re over 73. You don’t actually get the money, since it goes into the life policy, which pays for the long-term care insurance coverage. Once the 10 year payment is completed, there will be no further premiums.

You need a qualified expert in long-term care insurance to work the numbers for you. I turned to Brian Gordon, of Gordon Associates, whose agency specializes in only LTC insurance. He ran some numbers on the costs on the OneAmerica Asset Care policy described above for two scenarios.

It gives $6,000 per month in unlimited long-term care benefits, and can be used for any level of care, from home to institutional.

Here are the scenarios:

—A 62-year old woman in good health, could pay $15,650 per year for 10 years to purchase this policy. OR, she could get a significant discount if she paid the entire amount up-front — a cost of $125,184. That’s a huge amount!

But wait. The money is sitting in her IRA, invested very conservatively. So she uses it in the strategy described above, purchasing an annuity that automatically makes the policy premium payments over 10 years.

If she happens to die the very next year, her beneficiary gets a death benefit of more than $250,000, or $150,000 death benefit after the ninth year.

—A married couple, husband 65 and wife 62, get an even better deal. Jointly, they could pay $21,000 a year for 10 years to get this coverage. But the one-time premium (funded over 10 years, using the strategy above) would be $168,024 — again a huge amount. But if rolled out of an IRA into the annuity to pay the life premiums, they would EACH have a $6,000/month lifetime LTC benefit, all tax-free. And a $150,000 life insurance benefit on the second to die.

Yes, it’s a complicated strategy. But if the long bull market has given you a surprisingly large IRA balance, it’s one you might consider.

You can’t just call your homeowners insurance agent to get a quote! You can reach Gordon Associates at 800-533-6242. There is no charge for an illustration.

I get nothing out of this, other than the knowledge that I could be helping a lot of people who will face this expensive challenge down the road. And that’s The Savage Truth.

(Terry Savage is a registered investment adviser and the author of four best-selling books, including “The Savage Truth on Money.” Terry responds to questions on her blog at TerrySavage.com.)

Those financial headlines go beyond economic statistics and political maneuvering. The job market is critical to the personal finances of all Americans — contributing to strong consumer spending, rising corporate earnings and a rising stock market.

But how long will this good news continue? And how should it impact your own career, job-changing and retirement decisions — as well as your adult children and recent college grads?

While it’s a terrific time to be starting out in the workforce because of high demand, it’s important to understand the changing workplace. There may never again be an employee who is rewarded with a gold watch for 50 years of service! According to the Department of Labor, in January 2022, the median time that wage and salary workers had been with their current employer was 4.1 years.

Switching jobs can lead to advancement — or regrets. A new survey just released by the Conference Board reveals those who changed jobs since the pandemic are significantly less satisfied with their jobs than their colleagues who stayed. According to the survey, “Job switchers’ overall job satisfaction is down 5.6 percentage points — a big decline.” The largest areas of dissatisfaction were “primarily in financial benefits such as bonuses, hard base benefits, wages and promotions.”

Return to work

Where is the workplace these days? In the midst of the pandemic, in spring of 2021, 65 percent of pandemic remote workers surveyed said they wanted to keep working from home — and 58 percent even said they would look for a new job if they would have to return to the office.

But the balance of power shifted, as corporate executives — who could not do their jobs remotely — demanded workers come back to the office. Even the most sophisticated tech companies, including Google, Amazon, Meta and Apple, implemented return-to-work mandates requiring employees to be in the office at least three days a week. Still, there is plenty of vacant office space to attest to the changing workplace.

For the retiring generation of baby boomers, it comes as no surprise that the boss can make demands — from office hours to attire, from project assignments to vacation requests. And it’s not just physical space that has changed for work, it’s the attitudes of the working generation.

Bridging the gap

Gen Z is about to take over the workplace. Soon there will be more zoomers working full time than baby boomers. In 2024, the generation born between 1996 to 2010 is expected to overtake baby boomers in the full-time workforce, according to Glassdoor. So it’s not your imagination that the workplace has shifted.

According to the latest Stanford Report, Gen Zers expect constant change. It’s a generation of workers that is mostly concerned about making a difference and demanding answers. They don’t accept hierarchical organizations, preferring collaboration and teamwork. And they care about mental health and work-life balance.

Most importantly, Gen Z has a different perspective on loyalty. They lived through the recession layoffs in 2008 and then the pandemic shutdowns. And they have watched their parents transition to the “gig economy” as corporations shed the costs of employee benefits. So they live for the moment.

Perhaps those changing attitudes are responsible for the surge in consumer spending, the rise of buy now-pay later, the boom in cruise ship travel, the willingness to spend a small fortune on dinner at a restaurant — an expenditure that is literally down the drain before the credit card bill arrives.

The attitudes and the financial habits of Gen Z are anathema to the boomer generation, whose own parents’ attitudes toward work and saving were built in the Great Depression. But that’s all ancient history now — almost a century ago.

Just one caveat: History repeats — because generations have short memories. And that’s The Savage Truth.

(Terry Savage is a registered investment adviser and the author of four best-selling books, including “The Savage Truth on Money.” Terry responds to questions on her blog at TerrySavage.com.)

And now as baby boomers retire, more than $1 trillion every year is “up for grabs” as 401(k) plan participants decide to roll over that money to continue to grow tax-deferred. That torrent of money seeking a new home has generated a boom in rollover advice, laden with fees and self-serving recommendations. Unsophisticated employees are an easy mark as they try to figure out what to do with their retirement savings.

That’s why the Department of Labor, which regulates retirement savings, has issued a new fiduciary rule — one that covers advice given not only within the plan to participants, but also taking direct aim at the rollover market.

Starting this fall, any rollover advice must be done on a fully disclosed, fiduciary basis and in the best interests of the client. More specifically, it mandates that products carrying “invisible” commissions or annual management costs must become transparent — and demonstrably in the client’s best interest.

The financial services industry is fighting back against the new fiduciary rule because there’s so much money at stake. Morningstar estimates plan participants can save $55 billion over the next 10 years in fees inside the plans, and investors rolling over into annuity products could save another $32.5 billion over the same period.

The fiduciary rule will specifically impact the insurance industry — which has been marketing products such as index-linked annuities. The pitch for this product lulls the buyer into a sense that he or she can get both stock market growth and protection against loss. But these products really do is line the pockets of the salesman with huge commissions built into the product. And the fine print on these indexes limits the upside growth.

According to the federal government’s Council of Economic Advisers, “sales of just one investment product — fixed index annuities — suggests that conflicted advice could cost savers up to $5 billion per year.”

It does make sense to look into a rollover — a direct, tax-free move to a plan that presumably could offer safer and more diversified investment options than company 401(k) plans, which are designed to accumulate assets over an employee’s working years. But look before you leap! The fiduciary rule will give you the information you need to make a good decision for your rollover.

The impact of the new rule

The new fiduciary rule sets strict instructions for anyone offering advice on a roll-over — even though this money is actually moving out of the workplace plan. For starters, it requires anyone giving advice to put the client’s best interest ahead of their own.

And it puts a new responsibility — and financial burden — on employers, as well as the advice industry, to give employees the education they need to make good choices, as well as to make sure the plan investment choices don’t carry huge management fees.

Also, The new rule adds a higher level of scrutiny on rollovers, by requiring proof that the adviser clearly disclosed all conflicts such as hidden costs and commissions, and acted in the retiree’s best interests.

Will it work?

The real issue is how this rule can possibly be enforced. Pam Krueger, who created Wealthramp.com to match investors with fee-only fiduciary advisers, says enforcement will be difficult. “It’s like pinky-swearing” she says.

Krueger says the real value of this new rule is that it should make individuals aware of the magnitude of these conflicts when they seek advice. She warns: “If the Labor Department is going to all this trouble to force the industry to act as a fiduciary, it’s a reminder that consumers must keep their eyes wide open.”

In that regard, Krueger wants everyone to ask these three questions before signing on for advice:

Are you a fiduciary — and will you put that in writing?

How are you compensated — overall, and on each specific product you recommend?

How much — in dollars — am I paying each year for this product or service, as well as your advice?

A true fiduciary will readily put all of that in writing. The salesperson who says, “My company doesn’t allow that,” is certainly hiding costs you don’t want to pay. And that’s The Savage Truth.

(Terry Savage is a registered investment adviser and the author of four best-selling books, including “The Savage Truth on Money.” Terry responds to questions on her blog at TerrySavage.com.)

How to proceed depends on how you filed, who filed for you (such as an accounting firm, online tax prep service or tax preparer) and how you expected your refund to arrive.

First, if you’re expecting an online refund deposit, carefully check your tax return to make sure you listed your banking information correctly. And check your bank statement online, which you’ve probably been doing regularly.

If you used a tax preparation service, contact them first. Many services designate your refund to come back to THEIR account — and you might not have noticed that. Often, they say they will take their tax prep fees out of your refund — and this is their way of making sure they have access to the money! You might need to contact them to get your remaining refund.

Check your return to see if the person who prepared it gave instructions that your anticipated refund instead be applied to next year’s taxes! Perhaps you missed that in the discussions.

If, at this point, you’re still frustrated and have tried to call the IRS but can’t get through, here are some suggestions. Do them in this order:

—Where’s my refund? Go to www.IRS.gov and in the search box put the term “where’s my refund.” That will take you to a page that explains that your refund information should be posted 24 hours after you e-file a current-year return, three or four days after you e-file a prior-year return, or four weeks after you file a paper return.

Or go directly to www.IRS.gov/refunds. Click on the “search” button and you’ll be asked to input your Social Security number, tax year, filing status and the exact whole dollar refund amount shown on your tax return.

When you click “submit,” you’ll get the latest status on your refund.

If the refund is for the current (2023) filing, you can also call their specific toll-free number: 800-829-1954. For previous years, you must check online.

If you see that your refund has been issued, but you haven’t received it, you can start a “trace” to track it down.

—Office of Taxpayer Assistance. If you’ve followed the above steps and still can’t find your refund, it’s time to turn to the Office of Taxpayer Assistance. Go to www.IRS.gov and in the search box put in “taxpayer assistance.” That will lead you to the appropriately named Form 911. It’s a short form, and the way to get the process started.

The form comes in both English and Spanish, so scroll down to get the correct form you need.

—Taxpayer Advocate Service. The Taxpayer Advocate Service is a separate, independent organization within the IRS. They offer free help to guide you through the process of resolving tax problems that you haven’t been able to solve on your own. To reach the closest office (each state has at least one), go to www.IRS.gov and enter “taxpayer advocate” in the search box. That leads you to a page explaining how the Taxpayer Advocate Service works, and on that page there is a search box that will give you the closest office. You can also call the Taxpayer Advocate Service toll-free at 877-777-4778.

—Create an IRS.gov account. This little-known process allows you to see exactly what’s going on in your “account” with the IRS! It’s what the IRS telephone reps turn to when answering your questions. To create your own IRS.gov account, go to www.IRS.gov/Account.

The first thing you’ll see is a “Sign-In” box, which will be confusing since you don’t already have an account. Click anyway, and the next page will allow you the option to create an ID.me account via a secure service provider to the IRS. To create that account, you’ll need your Social Security number as well as a government-issued picture ID, such as your driver’s license. It’s worth the time to go through this process.

The IRS may seem impenetrable. But if you use the technology correctly, you can get answers and help. And that’s The Savage Truth.

(Terry Savage is a registered investment adviser and the author of four best-selling books, including “The Savage Truth on Money.” Terry responds to questions on her blog at TerrySavage.com.)

Even the zero-interest period on balance transfer cards can get you deeper into trouble. If you don’t pay off the balances within the zero-rate period, you can expect your finance charge to soar to around 30%.

Here are some more warnings — especially pertinent as Americans now carry record high credit card balances, over $1.13 trillion. A new Bankrate survey finds “more than one in four Americans say they are willing to take on debt to travel this year (27%), while 14% are willing to take on debt to dine out and 13% are willing to take on debt to attend a live entertainment event such as a concert, theater performance, or sporting event.”

To be clear, these purchases are not intended to be paid immediately upon receiving the credit card bill. Instead they will be financed over time. And if you’re willing to pay 20% interest on a dinner that is literally “down the drain” before you get the bill, you’re in deep trouble!

Avoid chasing rewards

Chasing credit card rewards may lead to another disaster. It might be an offer of immediate miles on an airline card, or a bonus on a travel card or cash back on purchases. But if you’re carrying debt, your top priority should be to pay down the existing debt, not to chase rewards. You may think you’re getting something for nothing, but your trail of opening cards to get rewards is noted in your credit report.

Too much open credit can ding your score since card issuers are becoming more concerned about the possibility you’ll use those cards to carry another balance. And why pay 20% interest to get a travel reward, enticing you to charge even more!

Younger cardholders are more likely to be reward-chasers, according to Bankrate, with 77% of Gen Z (ages 18-27) cardholders and 74% of millennials (ages 28-43) doing so. A word of advice: You’re outsmarting yourself!

Credit repair traps

When everything goes wrong, there’s a temptation to fall for targeted Internet ads promising to “repair” your credit. They offer a “free” credit report, a “free” initial consultation, and they boast of having worked with scores of people to remove bad stuff from their credit reports and improve their scores. They say they have lawyers and paralegals on staff to “fix” your credit history — all for an initial low fee ranging from $19 to $99. But wait, there’s more! There are certainly many more fees to come once you’ve signed on.

Even worse, everything that they do for you, you could do yourself! You can check your credit report at all three bureaus, using the links at AnnualCreditReport.com. You can get your free credit score at your bank or from CreditKarma.com.

If you spot an error on your credit report, you can contact each credit bureau and post a response or create a dispute if the information is incorrect. If you removed an ex-spouse from your card or mortgage documents, you can make sure that person’s credit is no longer reported with yours. And you can freeze your credit report for no charge at all three bureaus.

But the one thing you can’t do — and the “fix-it” agencies can’t do, either — is remove accurate (and damaging) bad stuff from your credit history. Period. It will roll off after seven years in most cases, or not until 10 years after a bankruptcy.

Yes, you can improve your credit by paying your bills on time, reducing existing balances (although not by repaying those already charged off), and by keeping your oldest card while closing other, unneeded cards. And you don’t need to pay for help to do any of those things!

And if you know you need trusted help, contact the nonprofit National Foundation for Credit Counseling (800-388-2227; NFCC.org). The only cost is typically $35, waived in hardship cases.

You’ve already gotten into credit trouble. You’ll only make it worse by shelling out more big money to try to fix it. And that’s The Savage Truth.

(Terry Savage is a registered investment adviser and the author of four best-selling books, including “The Savage Truth on Money.” Terry responds to questions on her blog at TerrySavage.com.)

Here are some key details on how reverse mortgages work:

—You can withdraw either a lump sum, use a line of credit, or receive monthly payments — tax free — out of the equity you have built up on your home.

—Most importantly, you can never run out of money or home equity, or be forced out of your home because of those withdrawals.

—When you sell your home or die, the amount you have withdrawn plus interest and fees, is taken out of the proceeds, with the balance going back to you or your heirs. If no equity is left, neither you nor your heirs owe any money.

—The standard home-equity conversion mortgage (HECM) is available to homeowners age 62 or older who have either paid off their mortgage or have a small remaining balance. The reverse mortgage is first used to pay off the mortgage balance.

—The amount you can receive is determined by your age, the value of your home and current interest rates. The older you are, the more money you get!

—You don’t need a credit check to qualify, and you retain title to your home.

—You remain responsible for property taxes, insurance and general upkeep of the home. So the lender will want to see evidence that you have enough ongoing income to do that.

—You must have independent counseling from an independent HUD-certified housing counselor before a reverse mortgage will be granted.

Other considerations

Basically, it’s that simple. Your house will become your piggy bank pension for tax-free withdrawals in your retirement. But there are some other things to think about before taking on a reverse mortgage:

—How long will you really stay in your home? At a minimum, the answer should be five years, but it’s better if your time horizon is 10 years. That’s because there are significant fees to set up a reverse mortgage, which are built into your line of credit. It’s just not worth it if you won’t be able to keep up with rising property taxes or might need assisted living in the near horizon.

—Would you be better off selling your home now, in a rising price environment, and banking the cash — or using it to move into a continuing care community, where your future health needs can be accommodated? It’s a tough call to leave the family home, but better to make that decision while you have flexibility.

—Can you manage the lump sum? Almost all reverse mortgages these days give a lump sum or line of credit, which you can use to repair the roof or replace the furnace or maintain your lifestyle. But since very few reverse mortgages now offer lifetime monthly payments, you might find yourself forced to move when the line of credit runs out!

Comparing lenders

Once you’ve thought through the implications for your own future lifestyle, you can begin to compare offerings from various lenders. You’ll want a standard FHA home equity conversion mortgage (HECM), not a product from a private lender that might seem more attractive but that doesn’t have federal guarantees that they’ll be around to pay out on your line of credit.

There are differences in the terms HECM lenders may offer.

—Consider the interest rates being charged. Almost every reverse mortgage these days charges an adjustable rate, pegged to an index of Treasury rates. Some lenders charge a higher “margin” over the index, while some charge lower rates but build in higher fees!

—Compare the origination fees. Those fees are capped at $6,000 per mortgage, but many lenders advertise lower or even zero fees to set up your reverse mortgage. (They are building their profit into the interest rate charged.)

—Compare the total amount of equity they calculate you can withdraw from your home.

You must do your homework in this process and not just fall for the glossy brochure in the mail. Start at ReverseMortgage.org, where you can search for an HECM lender in your state and use their online calculator to get a rough idea of how much money you could get in a lump sum or line of credit. They also have a link to HUD-approved independent counselors.

Don’t be deterred by the complexity of the process, or the painful discussions about mortality that underlie this decision. A reverse mortgage can be a helpful solution if done correctly. And that’s The Savage Truth.

(Terry Savage is a registered investment adviser and the author of four best-selling books, including “The Savage Truth on Money.” Terry responds to questions on her blog at TerrySavage.com.)

Economist Larry Kotlikoff and I detailed these horror stories on “60 Minutes” last November — and in our book “Social Security Horror Stories.” Millions of Americans have been or are due to be contacted by the Social Security Administration (SSA) with a demand to repay past benefits based on SSA’s mistaken calculations, some going back as far as 30 years.

In a message to SSA employees, O’Malley announced the first of several initiatives to make the system work more fairly. His words speak volumes:

“Effective today, instead of initially withholding 100% of a Social Security benefit to recover an overpayment, we are changing the default overpayment withholding rate to 10% (or $10, whichever is greater) of a person’s total monthly benefit. For many beneficiaries with an overpayment, this change significantly reduces the financial hardship they may face.

“We are developing the systems updates so that in a few months our systems will automatically use the 10% default rate for new overpayments. But for now, our systems will continue to initially withhold 100% of a person’s benefit to recover an overpayment. During this interim period, I am relying on our front-line staff to manually adjust the withholding for beneficiaries who request a lower rate. We appreciate you making these adjustments while we update our systems.”

In simple words, the elderly and disabled recipients of Social Security retirement and disability benefits will no longer face the threat of imminent stoppage of all their benefits unless the clawback demand is repaid.

Instead, from this moment on, the clawback will be no larger than 10% of a person’s monthly benefit, or $10, whichever is more.

Of special note, until the clawback form can be adjusted in the next two weeks, the commissioner instructs SSA employees to immediately adjust the withholding amount if anyone calls to complain!

That’s YOUR call to action! If your benefits have been suspended or substantially reduced because of a clawback, you should immediately call the SSA at 800-772-1213 and ask for the 10% adjustment!

(The commissioner has also demanded that wait times be reduced for those calling in, and they are currently averaging only 31 minutes.)

Another big change

In testimony before Congress last week, Commissioner O’Malley announced another huge and immediate change: The burden of proof for a clawback will no longer be on the beneficiary but rather on the SSA itself.

Many clawback claims have been sent out without factual justification — a failure of due process required by law. How can a claimant asking for a waiver defend himself against an accusation of fraud or failure to report offsetting pensions, if the SSA loses the paperwork? Or if they cannot find a physician’s report saying the person is no longer disabled?

Now, if the SSA can’t prove otherwise, the claimant prevails and the clawback demand is withdrawn.

In his testimony to Congress, Commissioner O’Malley also promised to look into a statute of limitations on clawbacks. And he detailed other potential reforms, with details yet to come. Remaining to be resolved is whether people who already repaid clawback demands might be entitled to some sort of reopening of their cases — and potentially a refund if the agency cannot defend its claims with facts.

After years of abuse by Social Security representatives who dodged calls, refused to produce evidence justifying the clawbacks, denied waivers and generally gave seniors the run-around, it’s exciting to see a new tone at the top of the agency.

The new commissioner understands the founding principles of both “equity and good conscience” and the requirement that the agency not “defeat the purposes of the (Social Security) Act” by depleting the life savings of beneficiaries below a stated percentage or threshold.

The commissioner’s message: “We continue to review our overpayment procedures to identify ways to better serve our customers and uphold our stewardship responsibilities.”

What a welcome relief to millions of Americans. And that’s The Savage Truth.

(Terry Savage is a registered investment adviser and the author of four best-selling books, including “The Savage Truth on Money.” Terry responds to questions on her blog at TerrySavage.com.)