Smart Money: Affordable car insurance not easy with teens
DEAR BRUCE: I need to price check some car insurance and don’t know where to go. I am afraid of giving so much information on the Internet. P.S. I have teens. — J.L. Lindstrom, Calif.
DEAR J.L.: Lots of luck. Your postscript may be goosing the number substantially, since no insurance company is enthusiastic about insuring a teen-age driver. You will have to check to see if your area has competitive terms or if you have to take what you can get.
I would dissuade you from using the Internet. While you may pay a little more, I believe that you are far wiser to have a local agent. There are some direct companies that may be a little cheaper, but, in my opinion, they are not the best buy. Insurance is a service-oriented enterprise, and I want a living, breathing, local person that I can deal with in the event of problems. That said, there are one or two national companies that do not use an agency staff which have earned a good reputation.
DEAR BRUCE: I would like to know if Social Security taxes are still withheld when a person reaches age 65, is a full time employee, but is drawing Social Security benefits. — P.K., via e-mail
DEAR P.K.: You bet your life. As long as you are on a payroll, you will pay Social Security tax. It is limited by income, of course, but the Medicare portion goes on forever. If you make a million dollars a year, you will pay Medicare tax on your entire earnings. There is no upside limitation. As long as you are earning, and even though you are a beneficiary, you will continue to pay the Social Security tax.
DEAR BRUCE: I’m 24 years old and earn about $65,000 a year. My father-in-law is in serious financial trouble and may lose his farm. They don’t want a foreclosure and are willing to sell us the farm for $246,000 and a 5 percent mortgage. Three years ago, it was appraised for $500,000. In addition, there is a home that I can purchase for $200,000; it appraised for $350,000. I would have to move into that home, or at least live close by, to keep my eye on things. I’m wondering if this is a good deal, or should we just take a pass and get on with our life? — Jerry, via e-mail
DEAR JERRY: Other things being equal, this looks like a heck of a deal to me. If the appraisals are correct, you’re getting a $350,000 gift. Whether you can meet the mortgage payments is another story. You surely can’t do that on $65,000 unless these properties generate some income; then the whole discussion becomes academic. If you can bring it off and handle the payments, it looks to me like this could be an extremely viable opportunity for you.
DEAR BRUCE: We are thinking of buying a modular home. It looks beautiful on print and paper, the specs are top shelf, and the price is about half of the cost of the same house stick built. What are your thoughts? — R.L., via e-mail
DEAR R.L.: There is a lot to be said about the cost savings for modular homes, but all things equal, I’d select stick built, if I could afford it. In many cases, the modular home will not provide anywhere near the amount of protection that a stick built offers in an area prone to storms such as Florida, or in many portions of the Midwest and Southwest. In addition, with some exceptions, the stick built home will generally appreciate at a steadier pace than the modular. There are some very fine modular homes being constructed.
Send your questions to: Smart Money, P.O. Box 503, Elfers, FL 34680. E-mail to: [email protected]. Questions of general interest will be answered in future columns. Owing to the volume of mail, personal replies cannot be provided.