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Black CEOs Lead Just 1% of Fortune 500 Companies

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Key Speakers At The Export-Import Bank Annual Conference 2013
Andrew Harrer/Bloomberg via Getty Images Ursula Burns, chief executive officer of Xerox
In 1999, Franklin Raines was appointed CEO of Fannie Mae -- making him the first black CEO to lead a Fortune 500 company. Since then, only 14 other black CEOs have assumed that role within America's Fortune 500 -- even though 14 percent of the American population identifies as having entirely or partial black heritage. Currently, five Fortune 500 companies have a black CEO -- indicating one of many equality gaps within the sector. Last month, the sixth and most recent addition to the group, McDonald's (MCD) CEO Don Thompson, retired after decades of service and slumping figures for the fast food chain. He had held the position since July 2012.

The lack of diversity within the Fortune 500 is clear when it comes to women and openly gay individuals. Theories explaining a diversity gap include identity covering (which involves "downplaying aspects of one's identity") and a lack of opportunities.

Groups like the Executive Leadership Council push for more diverse inclusion, and other empowerment ventures have been launched. While the number of black-owned businesses has grown since 2002, the presence of black business leaders at America's top level still lags behind.

As America celebrates this year's Black History Month, these five black CEOs lead Fortune 500 businesses.

Ursula M. Burns -- Xerox

In May 2010, Ursula Burns became the first black woman to become a CEO for a Fortune 500 company. Before assuming Xerox's (XRX) lead role, she worked at various levels of the company -- including her first position as a summer intern in its mechanical engineering department. The company considers Burns to be a key figure in its turnaround, as she oversaw global research and development at the time.

Burns has also received her share of criticism for underperforming as a CEO. Xerox's 2010 acquisition of Affiliated Computer Services has failed to reach expectations for critics and investors, but Burns and Xerox recently touted a strong finish to 2014 that saw gains and expectations exceeded in some facets of business.

Burns also serves on several boards, including American Express (AXP) and Columbia University's Center on Addiction and Substance Abuse.

Kenneth C. Frazier -- Merck

Kenneth C. Frazier has served Merck (MRK) in various positions since joining in 1992 as vice president, general counsel and secretary of the Astra Merck Group. In 2011, Frazier was promoted to CEO and chairman--making him the first black person to lead a major pharmaceutical company.

Frazier is the son of a former sharecropper and janitor who instilled the belief that a person can be anything they want to be with hard work. Growing up in impoverished North Philadelphia, Frazier went on to earn degrees from Pennsylvania State University and Harvard Law School. He practiced law from 1978 until 1992 before transitioning to business after representing Merck as a partner in the litigation department of the firm Drinker Biddle & Reath.

Roger W. Ferguson Jr. -- TIAA-CREF

Roger W. Ferguson Jr. has been president and CEO of TIAA-CREF -- a provider of retirement services in several fields -- since 2011. He has earned a bachelor of arts and doctorate in economics and a law degree from Harvard University. He credits his parents -- a schoolteacher and an Army veteran with a knack for investing -- for his passion for finance, even as a child.

In 1997, Ferguson became the third black individual to serve on the Federal Reserve Board of Governors, and he became the board's first black vice chairman two years later. He serves or previously served on several prominent boards and groups, including President Obama's Council on Jobs and Competitiveness and the Federal Open Market Committee. He began his career as a lawyer, practicing from 1984 to 1997.

Kenneth I. Chenault -- American Express

In 2001, Kenneth Chenault became CEO of American Express (AXP) after holding several positions within the company since 1981, where he started in the merchandising department. Along with his work at American Express, Chenault serves as a director of IBM (IBM) and Procter & Gamble (PG). Chenault earned a law degree from Harvard and began his career as an attorney.

Under his leadership, American Express in 2010 launched the Small Business Saturday in response to Black Friday shopping trends. "Small businesses create half of the jobs in the private sector," says Chenault. "They have created 65 percent of the net new jobs over the last 17 years. If people support independently owned small businesses in their community, they can make a difference."

John W. Thompson -- Virtual Instruments

John W. Thompson is CEO of privately held Virtual Instruments. Last year, he became the first black chairman of the board of Microsoft (MSFT), replacing Bill Gates. Before that, Thompson made history -- and shattered expectations -- during his stint as CEO of Symantec (SYMC) from 1999 to 2009. Not only was he the only black executive overseeing a tech brand at the time, Thompson guided revenue growth from $600 million to $6 billion.

Thompson's credentials also include 28 years with IBM and time with the Financial Crisis Inquiry Commission, where he investigated the 2008 financial crash. He is also a prominent figure in several Silicon Valley groups, as well as being part owner of the Golden State Warriors. Thompson has his MBA from MIT's Sloan School of Management.

 

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7 Great Apps to Save Money on Dining Out

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Deals on Dining Out: Top Apps for Saving Money

By Sabah Karimi

Whether you're heading to your favorite restaurant or fast-food joint, the cost of dining out can make a big dent in your budget. Americans spend an average $936 on lunch outside the home each year, according to a 2013 Visa (V) survey. Dinner at a restaurant can be twice as expensive when you factor in the cost of drinks and dessert. Here are seven of the best apps to help you save on dining out.

1. DealNews

Find the best local deals at area restaurants, tapas bars, breweries and cafes in a few taps and swipes with the DealNews app. It's easy to use and will give you a chance to hone in on only the best deals of the day -- everything is vetted by deal experts so you don't have to worry about expired coupons or fake deal alerts. Check out the Editor's Choice feature if you need some ideas, or browse the newest and hottest deals.

2. Scoutmob

Big city dwellers can find exclusive restaurant deals with the free Scoutmob app. What makes the pickings on this site different from the rest is the deals are curated by a team of on-the-ground Scouts. You'll receive restaurant recommendations that might prompt a trip to a brand new dining hot spot or venues that are off-the-beaten path. Deals are updated frequently.

3. Groupon (GRPN)

If you're ready to branch out of your comfort zone, download the Groupon app to search for local deals. From prix fixe menus to deep discounts on a single meal, the app can help you find package deals on dinner and drinks in a flash. Keep an eye out for Groupon's own local specials where you can get an extra discount on all deal purchases over a few days. If you don't end up using your Groupon by the time the deal expires, you can still use the amount you paid toward your next purchase.

4. Yelp (YELP)

Read unbiased reviews of that place you've had your eye on for a while, and snag a great deal for your next visit with the Yelp app. Just look for the small green price tag next to the business name to find out about available deals. Most discounts are for a certain dollar amount off your purchase or a free appetizer. You can see star ratings and reviews of some of the most popular dining destinations in town to make the most informed decision.

5. LivingSocial

Like Groupon, LivingSocial presents you with dozens of restaurants, cafes and eateries offering deep discounts on the latest menus. You can use the app to search for deals in a single city or multiple cities - an attractive feature when traveling. Just make sure to read the fine print in detail and make note of deal expiration dates. Some restaurants limit the deal to dine-in only and may have other limitations.

6. BiteHunter

Another deals aggregator site, BiteHunter brings you a comprehensive list of restaurant deals from dozens of sources in real-time. Use this app to find everything from happy hour specials to brunch discounts in your neighborhood. A unique feature of this app is the "BiteBuy" function that lets you make your purchases without having to enter your billing information every time. Use the filter to narrow down choices by type of cuisine or even by a specific location.

7. Restaurant.com

Purchase restaurant deals using your smartphone or tablet with the Restaurant.com app. This app eliminates the need to print out coupons and vouchers, and also gives you exclusive access to mobile deals. Take advantage of the built-in mapping and directions feature to locate that new dining venue within minutes.

 

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And the Award for Most Movie, TV Production Goes to ...

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86th Academy Awards - Insider Backstage
Matt Sayles/Invision/AP
The Motion Picture Association of America takes pride in its impact on America each year. On any given year, the MPAA projects that $40 billion is spent with over 330,000 American businesses through film and television productions. In 2013, the industry supported 1.9 million jobs and $113 billion in wages paid out.

The industry that was once dominated by Los Angeles and New York has changed to see other cities and even other countries -- we're talking about you, Vancouver -- become major players. Incentives have changed the economic impact for some states, with six recording more than $1 billion in movie and television-related wages in 2012-13. (Illinois, which just hit $1 billion, is not profiled.)

1. California

California's $18.2 billion in wages came largely from Hollywood, where the Academy of Motion Picture Arts and Sciences this weekend is giving out the Oscars for achievement in the movies. In 2012-13, California was the setting for 318 films and 347 TV series, according to the MPAA. Those productions created 186,853 direct jobs and 129,789 production-related jobs.

Despite its iconic status and constant production, California continues to lose ground to other states and countries due to lagging incentives and high costs. Currently, the state offers a 20 percent or 25 percent income and/or sales and use credit for qualified expenses. As Variety explains, "That's significantly smaller than programs offered by other states such as New York, which offers $420 million a year in credits for 30 percent of production costs." Though the decline continues, California was still home to many fan favorites, such as "Iron Man 3," "The Big Bang Theory" and "Mad Men."

2. New York

New York City dominates the state's production, but upstate New York is home to many independent films like David Cross' recent "Hits." Wages for productions in New York totaled $9.98 billion in 2012-13, covering 94,819 direct jobs and just over 56,000 production jobs. Notable productions include "The Amazing Spider-Man 2" as well as television shows "Saturday Night Live" and "Broad City."

America's movie industry began in New York City and its suburbs, but within a few decades Hollywood took over. In 1966, then-Mayor Joseph V. Lindsey made good on a promise to lessen bureaucratic red tape, and filming began to flow into the city. "Each additional feature film or commercial television show means additional jobs for New York residents," he wrote. "Additional jobs mean a healthier economy. And a healthier economy means a healthier city." Since then, the city has become a leader in the industry by heavily promoting productions made there and launching the first mayoral office of film, theater and broadcasting.

3. Georgia

Georgia is a booming with productions, including "The Walking Dead" and the upcoming "Ant-Man" movie starring Paul Rudd. "I really love it here," Rudd told AJC.com about filming in the Hollywood of the South. "I'd rather shoot in Atlanta than in LA." Such desires added up to $1.6 billion in wages for nearly 32,000 jobs during 2012-13.

Incentives largely drive production to the Deep South -- with Georgia offering a 20 percent credit for all in-state production costs of $500,000 or more. Productions can also receive an additional 10 percent credit for including the Georgia production logo in the opening or closing credits.

4. Texas

In 2012-13, productions in Texas funded nearly 46,000 jobs, paying $1.56 billion. With big-budget productions ("Transformers: Age of Existence"), reboots ("Dallas") and indie darlings ("Chef") all producing in state, the industry continues seeing benefits in Texas and its 5 percent to 17.5 percent rebate repayment to every production (with a $2 million cap).

Despite calling itself "the third coast of filmmaking" since the '70s, Texas is losing production to neighboring Louisiana and its enticing investor tax credits that includes up to 35 percent transferable tax credits with no cap. "Texas has a very fair and generous incentive program, but it just can't compete," explains James M. Johnston, who moved his Texas-set film "Ain't Them Bodies Saints" to Louisiana. He told Texas Monthly, "In Louisiana, if you spend the money, there are a few hoops you have to jump through, but you get 30 percent back."

5. Florida

Florida's productions involved over 36,000 jobs that paid $1.5 billion overall. Productions like "Burn Notice," "The Real Housewives of Miami" and the upcoming "Tomorrowland" are just as varied as the state's multi-faceted incentives.

Florida saw a boom in productions over the last decade. The state credits a wealth of TV and film professionals and its production infrastructure, which includes studios, editing and rental houses -- including Univision, America's leading Spanish language. The state has a five-year plan to expand production by 2018.

 

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Week's Winners, Losers: Walmart Pays Up, Priceline Goes Up

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Close up of the Priceline logo as seen on its website. (Editorial use only: ­print, TV, e-book and editorial website).
M4OS Photos/Alamy
There were plenty of winners and losers this week, with the leading retailer jacking up what it pays its lowest-level hires and underwriters turning on a tech company they took public last month.

Walmart (WMT) -- Winner

Walmart, the world's largest retailer, is raising its entry-level wages to at least $9 an hour in April. That will be bumped up to at least $10 an hour come February of next year.

The move may not entirely silence the activists championing for Walmart to pay at least $15 an hour and pave the way for unionization, but it's at least a baby step in improving its public image. The move will mean that the average full-time wage earner at Walmart will be making $13 an hour.

Walmart also will invest $1 billion this fiscal year in improving its store operational structure, giving associates more control over their schedules and a closer relationship with their supervisors.

Walmart isn't just giving more money to many of its 1.3 million U.S. workers. Shareholders are also getting in on the fun as the discount department store chain boosted its quarterly dividend rate.

Box (BOX) -- Loser

The underwriters that took Box public at $14 are finally free to issue their ratings on the stock, and they're not a very enthusiastic bunch. A whopping seven of the eight analysts initiated coverage of Box this week with a ho-hum "hold" rating. The lone underwriter to offer a bullish note was Credit Suisse, slapping shares of the cloud-based data storage provider with an "outperform" rating and a $24 price target.

This is definitely a cutthroat market for digital lockers, but it's not as if the stock is trading that much higher than the $14 price where they helped take Box public.

Flooring Providers -- Winners

Shares of floor-tile retailer Tile Shop (TTS) and carpet-tile maker Interface (TILE) moved higher after posting encouraging results. Tile Shop saw its quarterly sales climb 9.5 percent from the prior year's holiday quarter, fueled almost entirely by the 14 new stores that it opened through 2014. Interface saw sales of its tile-shaped carpets climb 8.1 percent with double-digit growth in the U.S. and Asia.

Investors fearing that the housing market stabilizing would cool off demand for home improvement projects appear to be wrong. Consumers are taking to tiles and carpet tiles these days.

AT&T (T) -- Loser

The telecom giant rolled out its ultra-fast fiber broadband in Kansas City on Tuesday, giving customers hungry for the promised speed of a gigabyte per second a way to get it for $70 a month. The reason that AT&T is making the cut as a loser this week is that reports are slamming the company for offering a privacy add-on where guests pay an additional $29 a month so their surfing habits won't be tracked.

Wait a minute. These premium customers are being followed online? Letting the public know that not having access to that information is worth an extra $29 a month doesn't look very good.

Priceline (PCLN) -- Winner

It's not a bad time to be a travel portal. Last week it was Expedia (EXPE) agreeing to shell out $1.34 billion for smaller rival Orbitz, a move that places the most popular sites through Europe and the U.S. in the hands of just Expedia and Priceline.

This week it was Priceline stock racing higher on Thursday after it posted another blowout quarter. Adjusted earnings rose 22 percent to $577 million or $10.85 a share, once again blowing past analyst expectations. Bookings soared 17 percent to $10.7 billion, with the lion's share of those travel plans being booked by European customers. Priceline's a globetrotter in more ways than one.

Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Interface, Priceline Group and Tile Shop Holdings. Try any of our Foolish newsletter services free for 30 days. Looking for a winner for your portfolio? Check out The Motley Fool's one great stock to buy for 2015 and beyond.​

 

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Lodge Manufacturing: Classic, Comforting, Cast Iron

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LodgeEpisdodePostRoll.Mov

Around one of the large bends of the Tennessee River, on Chattanooga's west side, sits South Pittsburg, Tennessee. This small community, named for its link to the Pennsylvania metal industry, has forged an identity steeped in the melting of ore. The story of South Pittsburg is tied closely to the story of its most well-known company -- Lodge Manufacturing.

In 1896, ago, Joseph Lodge came to South Pittsburg looking for a job and stability for his family. Utilizing two of the region's most plentiful resources -- iron from the mountains and labor from its residents -- Lodge began making cast iron cookware under the banner of The Blackstock Foundry, named for his close friend and pastor. Ten years later, Blackstock was leveled after a devastating fire, forcing Lodge and his employees to start over in a new facility just a few blocks south. Scrapping the Blackstock name, the company became Lodge Manufacturing.

Man Made Content
Cast-iron skillets have been used for centuries, as cooking was done primarily over outdoor and campfire flames, hearths and stoves. As years and technology progressed and the non-stick movement expanded, cast-iron cookware was largely marginalized. But Lodge wouldn't, and couldn't, waver. It remained true to quality cookware, and most importantly, its process.

In the more than a century that Lodge has been in business, an enduring and rich legacy has emerged in this community, nestled in the Appalachian Mountains. It is the only manufacturer of cast iron cookware in the United States. For the 270 foundry employees and the Lodge family, it's reflected in their emphasis on quality.

"I think one of the reasons we are still here is because quality is our top priority," says Henry Lodge, the great-great grandson of the company's founder and Lodge's chief operating officer. "We know that the utensil that a man or a woman uses to feed their family has got to be the best there is." That quality, Lodge maintains, is the key to survival.

Man Made Content
Chapter 1: From Burn to Box

The process keeps Larry Raydo, Lodge's director of quality assurance, up at night. A Pennsylvania native and veteran of manufacturing, Raydo gets excited talking about making things well. To maintain the level of quality that Lodge is known for, Raydo says all employees are given the autonomy to determine if a piece of cookware hasn't met strict internal standards.

"It sounds trite, but it's real here," he says. "Anybody at Lodge can throw a casting away as scrap, no questions asked. If there is something coming through on the line they don't think is right, they can stop production right there."

Production begins at a far corner of the Lodge foundry, in a towering heap of recycled steel and scrap iron and a variety of iron known as "pig" iron. To maintain company standards, every piece of recycled metal it sources from brokers is inspected for radiation exposure and chemical makeup. The steel and iron is loaded into 10-ton furnaces, which melt the steel at a temperature just south of 2,500 degrees. Once the steel and iron is melted and mixed, the molten iron is poured into Lodge's distinct molds, made of tightly compacted sand, the only material able to withstand the extreme temperatures. As the casts cool and move across the conveyor belts, they're sent to the shaker pan, which jerks the sand loose from each iron casting, revealing Lodge's iconic cookware.

The key to Lodge cookware lies in its seasoning. Each piece is sent through an oven, glazed and baked with a proprietary oil base, giving the cookware its signature ability to retain heat and trap flavor while it's cooking. And by design, each time the cookware is used, it enhances its ability to trap heat and sustain flavor.

"It's all natural," Raydo says of the seasoning. "The longer you use a piece of cast-iron cookware, the better the seasoning will get naturally."

After the seasoning, each skillet is cleaned, rinsed, packed and sent off for shipping, to Lodge's roughly 1,000 retailers, including Walmart (WMT), Cracker Barrel (CBRL) and Williams-Sonoma (WSM). It's a two-hour process, from melt to packaging.

Chapter Two: Generations

Dotting the landscape of American manufacturing, there are numerous stories just like the one of Jerry Don King. King has spent 38 years at Lodge, beginning in the packing department, and has held virtually every position on the foundry floor -- twice.

The King story starts with his grandfather, who spent 42 years with the company, and his father, who spent 39 years. Three uncles and two brothers worked here, for a combined 250 years of service to the company, by his count.

Man Made ContentJerry Don King has worked at Lodge for 38 years, following stints by his father and grandfather.
A modest, soft-spoken Tennessee native, he is a utility mechanic, an integral part of keeping the Lodge foundry's heartbeat healthy. Early every morning, King and his co-workers check the plant's machinery to ensure it's running smoothly, and when the massive machinery breaks down, King and his team strike quickly to get the line up and running again.

"If something breaks down, we get right on top of it," King said. "We've gotta get this machinery going as soon as we can, because the main thing is keeping everything going. It's a great feeling, knowing the production is going along."

Over the course of King's 38 years, save for a weeklong layoff when business slowed, King knows the value in what he and his fellow workers do. "They've got us making a quality cast iron skillet," he said. "It's turned out being one of the best-selling skillets in the world on account of the quality."

For Henry Lodge, there is realness to the people on the foundry floor; something he says is clearly reflected in the cookware they make. "We're real people. We make stuff for a living," Lodge said. "We're not a service industry. We're not an advertising agency that creates something that comes and goes and it's gone. Cast iron cookware will be around for another 100 years, I think there is something about it being real, and based in the earth."

Man Made ContentHenry Lodge is chief operating officer of the family business.
Chapter Three: The Lodge Legacy

Henry Lodge knows that over a century of tradition sits on the shoulders of him and his leadership team every day. His cousin, Bob Kellerman, serves as Lodge's CEO, and together they work hard to shepherd the business into more contemporary waters.

The company has just completed the first phase of its three-part expansion plan, which included adding a third production line and a melt center. The expansion is part of the company's strategy to aggressively evolve with the demands of the industry as well as maintain a strong sense of the environmental responsibility.

Lodge Manufacturing accepted the federal government's Energy Star Challenge to reduce energy by 10 percent over five years -- and it met the goal four years ahead of schedule. It also fully recycles the sand used for molds, the bushing steel in castings and the oil used in seasoning. Lodge says it's all key to positioning the company for the next generation of employees and sustaining the community where they live.

"I think the challenge for those of us, my cousin Bob and I, our generation, this business, is how do we leave the next generation, what do we leave them?" he said. "All of those environmental concerns are very important to us, because our fellow employees and neighbors live, you can see houses from here.

Man Made Content

When Lodge went off to college, he had no plans to return to Lodge, but the pull of the family business was too strong. Following a summer working in the foundry, he resisted again, but now the factory and the people are the centerpiece of his everyday life.

"Coming here, and making contact with the people that are doing the heavy lifting, the hard work, it almost always brings me up," Lodge says. "Because it's going, it's vibrant. There's hot iron, things are moving. There's nothing just static. It's active, it's living, and it's an entity all its own."

For a small town, buried in the heart of the Appalachian Mountains, there's an immense sense of pride in what the people of Lodge Manufacturing do every day. It's pride that is tied to the family aspect of cookware, something used in kitchens and on dining room tables across the globe. Drawing on the rich resources of the region, and the shoulders of a community versed in the value of hard work, Lodge understands the premium of quality and keeping the legacy alive that was ignited by his great-grandfather over 100 years ago.

"There are a lot of foundries in the United States, a lot of foundries doing great work," Lodge says. "But very few make a product the consumer actually touches, and uses now. There are a lot of castings in the car they drive every day, but here, it's something that's real. That people understand."

And if by chance his great-grandfather were able to see what the little foundry once known as Blackstock has grown into? "I think Joe Lodge would be pretty impressed with where we are," he says. "I think he started it to have a little business to support his family, to employ some of the folks that needed jobs, and we're still doing all of that, but we're certainly doing it on a scale that I'm not sure Joe Lodge would have ever imagined."

Andrew Iden is an Atlanta based freelance writer and producer. He spent eight years as a writer/producer for HLN's Nancy Grace and now works as a freelance news editor/producer with CNN and Mixed Bag Media. He's written for CNN and The Bluegrass Situation, and he was a newspaper reporter for six years in northern Virginia before moving south. Follow him on Twitter at @AJIden and www.andrewiden.com.

 

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Feds to Fine Air Bag-Maker Takata $14,000 a Day

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Air Bag Recall
Carlos Osorio/AP
By JOAN LOWY and TOM KRISHER

RICHMOND, Va. -- he U.S. government will fine Japanese air bag maker Takata Corp. $14,000 a day for failing to fully cooperate in a long-running investigation of faulty and potentially dangerous air bag inflators.

The inflators, in cars made by 10 companies, can explode with too much force, spewing shrapnel into drivers and passengers. At least six people have been killed and 64 injured worldwide due to problem.

Transportation Secretary Anthony Foxx announced the fines Friday in Richmond, Virginia, calling Takata a "bad actor" for allegedly dumping 2.4 million pages of documents on the National Highway Traffic Safety Administration without the legally required explanation of what's in them.

The agency demanded data from the company in two special orders last year, but it said Takata failed to provide an index so investigators know what to look for. Fines will accrue daily starting Friday until Takata fully explains the documents, the agency said in a letter to Takata.

We have a very serious defect issue. We're working as hard as we can to get defective [cars] off our roads. ... We will not tolerate this.

The fines are another escalation in the public fight between NHTSA and Takata, which also refused the agency's demand to issue a nationwide recall of driver's side air bag inflators last year. Automakers recalled the cars on their own, however. Members of Congress have criticized the company for a lack of cooperation as the government, Takata and automakers try to track down the exact cause of the inflator problem.

Takata officials have said publicly they are working with the agency, but Foxx said that's not true. "We have a very serious defect issue. We're working as hard as we can to get defective [cars] off our roads. ... We will not tolerate this."

NHTSA's letter also threatens depositions of Takata employees and court action from the U.S. Justice Department, which already is investigating the company.

In a statement, Takata disagreed that it hasn't cooperated. The company said it turned over documents, meets regularly with the agency and has explained testing. Tests so far support Takata's view "that age and sustained exposure to heat and humidity is a common factor in the small number of inflators that have malfunctioned," the company said.

Takata also said it has increased production of replacement parts and is working with competitors to support automaker recalls. "We remain fully committed to cooperating with NHTSA," the statement said.

Huge Recall

Takata's inflator propellant, ammonium nitrate, can burn faster than designed if exposed to prolonged airborne moisture. That can cause it to blow apart a metal canister meant to contain the explosion. So far, automakers have recalled about 17 million vehicles in the U.S. since 2008, and about 22 million globally due to Takata inflators. There could be as many as 30 million vehicles with Takata air bags nationwide.

Fines from NHTSA are capped at $35 million an infraction. Since Takata is alleged to have violated two orders, it could be fined up to $70 million. But at $14,000 a day, it would take nearly 1½ years to reach the cap.

Takata may keep paying the fines rather than guiding NHTSA to documents that could bring bigger penalties, said Kelley Blue Book Senior Analyst Karl Brauer, who said such a decision is probably a cost of doing business "that they can roll into some budget line and not really even notice it."

Takata reported a $278 million loss in its most recent fiscal quarter, a reversal from a $74 million profit a year earlier.

'Imminent Hazard'

Foxx announced the fines on a bus tour to promote a major transportation bill that would raise the maximum fine against companies to $300 million, triple NHTSA's investigations budget to $31.3 million and give it new authority to stop sales of defective autos that are an "imminent hazard."

Also in the bill are provisions requiring used-car dealers and rental-car companies to get recall repairs made before they can rent or sell cars.

NHTSA is continuing to pursue the national driver's side inflator recall from Takata, but the agency must find the cause of the failures to do that, Administrator Mark Rosekind said. Inflator tests are being done by Takata and automakers under NHTSA-approved protocols, he said.

In Miami Friday, U.S. District Judge Federico Moreno held the first hearing on more than 80 potential class-action lawsuits against Takata. Most seek damages for loss in vehicle values and have been consolidated for pretrial decisions. A smaller group of plaintiffs seek damages for injuries.

Moreno urged attorneys to agree on preserving inflators for tests by plaintiffs' lawyers, and NHTSA said Friday it would issue an order next week that makes inflators available for testing to protect the public but leaves some for lawyers.

Takata attorney David Bernick said recalled inflators are destroyed when tested.

-Legal affairs writer Curt Anderson contributed from Miami. Krisher reported from Detroit.

 

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Sides in West Coast Seaport Dispute Face Friday Deadline

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Port Labor
Jae C. Hong/AP
By JUSTIN PRITCHARD

LOS ANGELES -- With a Friday deadline looming, negotiators labored to reach a deal in a contract dispute that has snarled international trade at seaports from Southern California to Seattle.

U.S. Secretary of Labor Thomas Perez told dockworkers and their employers that if they can't find common ground in San Francisco, he will take the parties to Washington next week. The idea is that, after nine months of talks, it will help to have a change of scenery and proximity to elected leaders who are increasingly pushing for a resolution to economically damaging problems on the West Coast waterfront.

The International Longshore and Warehouse Union and the Pacific Maritime Association, made up of shipping companies and port terminal operators, are working under a media blackout and had no comment Friday.

Billions of dollars of cargo are sitting on dozens of massive ships anchored outside West Coast ports. They can't dock because of historically bad cargo bottlenecks at 29 ports that handle about $1 trillion of trade annually, much of it with Asia.

Though the economic impact has been hardest on specific industries -- U.S. produce and meat exporters, for example, and smaller importers of consumer goods -- Walmart Stores (WMT) warned Thursday that port congestion could affect selection in the retail giant's stores.

Cargo already was moving slowly due to systemic problems in the supply chain, including a shortage of truck beds to carry containers of cargo from dockside yards to distribution warehouses. Starting this fall, problems reached crisis levels as dockworkers slowed their work rate to comply fully with safety rules and companies that load and unload ships rolled out partial worker lockouts.

Employers said they wouldn't pay extra wages on holidays and weekends to dockworkers they accused of purposely slowing down as a bargaining tactic, which their union denies.

Both imports and exports that would normally take a few days to clear the docks are now taking weeks.

Talks on a new contract began in May. The prior one lasted six years and expired in July, though longshoremen continued to work. After halting progress that led to agreements on issues including health care, talks broke down in recent weeks, and Perez began overseeing negotiations Tuesday.

The big remaining difference is over whether to change the arbitration system that dockworkers and companies use to resolve workplace conflicts.

 

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Cumin Recalls Sound Alarm for Those With Peanut Allergies

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An ongoing series of recalls involving cumin -- a spice used in making chili, tacos and other dishes -- has made those foods virtually off-limits for anyone with peanut allergies.

The problem is peanut protein has been found in cumin products used in soups, meats, Tex-Mex items, Indian dishes and other foods -- making it difficult for someone with a peanut allergy to know when they might be eating something that could hurt them.

The U.S. Food and Drug Administration issued an advisory this week as the list of cumin recalls that started nearly two months ago grew yet again. Goya's recall of black beans and black bean soup was at least the eighth related recall and follows a recall by Spice Mill of cumin and creole seasoning.

Far more products are likely involved. For instance, Whole Foods (WFM) issued recalls of dozens of prepared foods this month -- including meatloaf, rotisserie chicken and guacamole -- all over the risk of peanut products in cumin. Whole Foods stores in a dozen states and Washington, D.C., sold the products.

What You Should Do

Because of how serious certain food allergies are, food labels are required to include when there's the possibility that a food allergen is present. Because the cumin and products made with cumin were not supposed to have the peanut protein there is no warning.

The FDA said that it's not clear yet, as its investigation continues, what other brands and products using cumin could have the peanut protein in it. That's why the agency is warning consumers with severe peanut allergies away from any products that could have cumin as an ingredient. Its advice:
  • Review the list of recalled products and avoid these foods. They include ground cumin, seasoning mixes and cooking kits that include Tex-Me" and Indian dishes.
  • When choosing a food, review the ingredients panel. Products, such as soups or chilies that contain only small amounts of the affected ground cumin may not contain enough peanut protein to trigger a reaction in most peanut-allergic people. However, people who are highly sensitive to peanuts may consider avoiding products that list "cumin."
  • Realize that if the ingredients panel lists "spices," it may or may not contain ground cumin. People who are highly sensitive to peanuts may want to call the manufacturer to find out if the product contains cumin powder.
  • Realize that if symptoms of an allergic reaction, such as shortness of breath, swelling of the lips, tongue or throat, or hives, occur, stop eating the product and seek immediate medical care or advice.

 

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New Woes for HealthCare.gov: Wrong Tax Info Sent Out

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Health Overhaul Tax Troubles
Don Ryan/AP
By RICARDO ALONSO-ZALDIVAR

WASHINGTON -- In a new setback for the health care law and the people it's supposed to help, the government said Friday it made a tax-reporting error that's fouling up the filings of nearly a million Americans.

After a successful sign-up season, the latest goof could signal new problems with the complex links between President Barack Obama's health care overhaul and the nation's income tax system.

Officials said the government sent the wrong tax information to about 800,000 HealthCare.gov customers, and they're asking those affected to delay filing their 2014 returns. The issue involves a new government form called a 1095-A, which is like a W-2 form for health care for people who got subsidized private coverage under Obama's law.

It's just another black mark on the administration's handling of the health care act. They were hoping for a clean season.

People can find out whether they're affected by logging in to their accounts at HealthCare.gov, where they should find a message indicating whether they were affected or not. They also can check by phoning the federal customer service center at 800-318-2596.

Separately, California announced earlier that it had sent out inaccurate tax forms affecting about 100,000 households. The state isn't part of the federal market but runs its own insurance exchange.

HealthCare.gov said in a blog post that the federal mistake happened when information on this year's premiums was substituted for what should been 2014 numbers. The website had a technology meltdown when it was launched back in 2013, but seemed to have overcome its problems this enrollment season.

"It's just another black mark on the administration's handling of the health care act," said Roberton Williams, a senior fellow at the nonpartisan Tax Policy Center in Washington. "They were hoping for a clean season."

'Told to Wait'

"For many of these impacted taxpayers, the tax refund could be the single largest financial payout of the year," said Mark Ciaramitaro, H&R Block's vice president for health care. Many people due a refund file well before the April 15 deadline. "They are being told to wait," he added, "further delaying access to their tax refund."

On another matter, the administration also announced a special sign-up extension for uninsured people who would face the health care law's tax penalties for the first time this year.

Several million households could benefit from that grace period, which had been sought by Democratic lawmakers.

Uninsured people who go to file their taxes and learn they're facing a penalty will have between March 15 and April 30 to sign up through HealthCare.gov. Otherwise, they would not have had an opportunity until the fall. Fines for being uninsured are going up significantly in 2015.

Self-Inflicted Wound

The tax-document mistake was a self-inflicted wound after what Obama had personally touted as a successful open-enrollment season, with about 11.4 million people signed up.

On Capitol Hill, Democrats were frustrated, but they gave the administration some credit for disclosing the error early instead of letting the problem compound as tax season advances.

The White House downplayed the consequences. "It's a small percentage of overall tax filers," said spokesman Josh Earnest. "You're talking about less than 1 percent of people who file taxes."

At the Health and Human Services department, Andy Slavitt, who oversees health insurance programs, said consumers affected by the problem will be notified starting immediately via phone calls and emails. They represent about 1 of every 5 HealthCare.gov customers who got subsidies in 2014.

An estimated 50,000 people who have already filed their taxes will receive special instructions from the Treasury Department, he said. All corrected forms should be available by early March.

Complicated Links

Slavitt said the error involved a "benchmark" premium that is used to help determine the subsidies that individuals receive. It's unclear whether the impact would favor the government or individual policyholders. Slavitt said it's a mix.

The tax error highlights the complicated links between Obama's health care law and taxes, connections that consumers are experiencing for the first time this year. The law subsidizes private health insurance for people who don't have access to job-based coverage. Those subsidies are mainly based on income.

By packaging the benefit as a tax credit, the law's supporters were able to promote it as a tax cut. But that also introduced new wrinkles to an already-complicated tax system at a time when Republicans have put the squeeze on the IRS budget.

Other issues could emerge later this spring. Consumers filing their taxes have to verify to the IRS that they got the amount of subsidy they were legally entitled to. If they received too much, their refunds will get dinged. Too little, and the government repays them. Some experts suspect that many consumers may have underestimated their 2014 incomes and received too big a subsidy.

"This is very complicated, and we've got all these different pieces coming together that will be prone to error," said Williams, the tax policy expert.

 

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Market Wrap: Dow, S&P 500 At Record Highs on Greek Debt Deal

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Financial Markets Wall Street
Richard Drew/AP
By Caroline Valetkevitch

NEW YORK -- The Dow and S&P 500 ended at record highs Friday while the Nasdaq notched an eighth straight day of gains after Greek and eurozone finance ministers reached a deal to extend heavily indebted Greece's financial rescue by four months.

The agreement removes the immediate risk of Greece running out of money next month and possibly being forced out of the single currency area.

The Nasdaq matched an eight-session winning streak from a year ago and inched closer to its 5,132.52 March 2000 all-time intraday high, reached just before the dot-com bubble burst. The S&P 500 ended slightly higher for the week as well, its third straight week of gains.

You're seeing a little bit better U.S. economic statistics than you've been seeing over the past three or four weeks. The European statistics have gotten a lot better, too.

The Greek accord will allow investors to concentrate on the fundamentals that should be driving the market, said Ben Pace, chief investment officer at HPM Partners in New York.

"You're seeing a little bit better U.S. economic statistics than you've been seeing over the past three or four weeks. The European statistics have gotten a lot better, too," Pace said. "So maybe a relief rally today, because the markets were down as there was a lot of consternation going around."

Shares of the Global X FTSE Greece 20 exchange-traded fund jumped 10.1 percent, while U.S.-listed shares of the National Bank of Greece surged 21.7 percent to $1.96.

The Dow Jones industrial average (^DJI) rose 154.67 points, or 0.86 percent, to 18,140.44, the Standard & Poor's 500 index (^GSPC) gained 12.85 points, or 0.61 percent, to 2,110.3 and the Nasdaq composite (^IXIC) added 31.27 points, or 0.63 percent, to 4,955.97.

For the week, the Dow was 0.7 percent, the S&P 500 was up 0.6 percent and the Nasdaq was up 1.3 percent.

Intuit (INTU) was among the Nasdaq's biggest positives, rising 6.2 percent to $96.72 a day after reporting a smaller-than-expected quarterly loss.

Shares of Mohawk Industries (MHK) were up 6.7 percent at $184.26, the biggest percentage gainer in the S&P 500, following results.

About 6.2 billion shares changed hands on U.S. exchanges, below the 7 billion average for the month to date, according to BATS Global Markets.

Advancing issues outnumbered decliners on the NYSE 2,085 to 990, for a 2.11-to-1 ratio; on the Nasdaq, 1,449 issues rose and 1,266 fell, a 1.14-to-1 ratio favoring advancers.

The S&P 500 posted 82 new 52-week highs and two new lows; the Nasdaq composite recorded 107 new highs and 23 new lows.

What to watch Monday:
  • The National Association of Realtors releases existing home sales for January at 10 a.m. Eastern time.
  • The Federal Reserve Bank of Dallas releases its February survey of manufacturing conditions in Texas at 10:30 a.m.
Earnings Calendar
These selected companies are scheduled to release quarterly financial results:
  • Alliant Energy (LNT)
  • Dish Network (DISH)
  • Express Scripts (ESRX)
  • HSBC (HSBC)
  • Tenet Healthcare (THC)

 

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What Married Taxpayers Lose by Filing Separately

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Marriage Tax
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By Lisa Hay

If you're married, deciding how to file your taxes -- jointly or separately -- may make a difference in how much you pay. Here's what you need to consider.

Key Takeaways

Married couples who file jointly must complete one shared tax return and jointly take responsibility for the income reported and taxes owed.

Filing separately may be beneficial if you need to separate your tax liability from your spouse's, or if one spouse has a significant itemized deduction.

Filing separately can disqualify or limit your use of potentially valuable tax breaks, but you should consider both ways to see which way will save you more in taxes.

For all married couples, there is an annual choice to make when selecting your filing status: married filing jointly or married filing separately?

As with most tax-related questions, the answer is that it depends.

It's important to note that married filing separately is not the same as filing as a single person. In most cases, it doesn't make sense to file separately because a married couple will usually end up paying more total tax with two returns.

But, there are exceptions to every rule -- and this one is no different. There are cases when filing separately makes more sense in order to maximize a deduction or to separate tax liability. That means it is important to look at your individual situation each year when deciding how to file.

What You Lose By Filing Separately


Filing separately can disqualify or limit your use of potentially valuable tax breaks, including (but not limited to):
  • The child and dependent care tax credit
  • The adoption credit
  • The Earned Income Credit
  • Tax-free exclusion of U.S. bond interest
  • Tax-free exclusion of Social Security benefits
  • The credit for the elderly and disabled
  • The deduction for college tuition expenses
  • The student loan interest deduction
  • The American Opportunity Credit and Lifetime Learning Credit for higher education expenses
  • The deduction of net capital losses
  • Traditional IRA deductions
  • Roth IRA contributions
So, why would it make sense to file separately?

What You Gain By Filing Separately


There are some situations in which filing separately can actually result in tax savings. A few common scenarios include:

Separation of Your Tax Liability From Your Spouse's

It may be preferable to file separately when you need to separate your tax liability from your spouse's. Signing a joint tax return makes you both responsible for the accuracy and completeness of the return and obligates you for any current or future tax liability or penalties. If you file separately, you will only be responsible for the accuracy and payment of taxes for your own return.

Lower Overall Tax Bill If One Spouse Has a Significant Itemized Deduction

If you and/or your spouse both have taxable income and at least one of you (ideally the person with the lower income) has significant itemized deductions that are limited by adjusted gross income, or AGI, you should run the numbers to calculate the potential advantages of filing separately.

Common itemized deductions limited by AGI are:
  • Medical expenses, deductible only to the extent they exceed 10 percent of AGI -- 7.5 percent if you're age 65 or older
  • Personal casualty losses, deductible only to the extent they exceed 10 percent of AGI
  • Miscellaneous itemized expenses, such as unreimbursed employee business expenses, fees for tax advice and preparation, and investment expenses, deductible only to the extent they exceed 2 percent of AGI
  • Charitable contributions, deductible up to 20, 30 or 50 percent of AGI, depending on the type of gift
For example, AGI determines if a couple can deduct unreimbursed healthcare costs and casualty losses on Schedule A. However, out-of-pocket medical expenses must exceed 10 percent of AGI to qualify as a deduction. Casualty losses must also total more than 10 percent of AGI. (See IRS guidelines on medical deductions.)

The spouse with the substantial medical expenses calculates deductibility against only his lower AGI when filing separate returns. As each spouse's AGI -- and AGI limits -- are lower on separate returns, allowable deductions for these types of expenses may be considerably higher if you file separately. When one spouse can lower taxable income this way, married filing separately might reduce a couple's overall tax liability.

State Considerations


State income taxes can also impact your decision. In some states, considering the total federal and state tax liability together may change the numbers in favor of filing separately. When one or both spouses live in a community property state, special rules apply for allocating income and deductions between each spouse's tax return. Each spouse generally reports half of the total income and half of the deductions on each tax return. Community property states are: Arizona, California, Idaho, Louisiana, New Mexico, Nevada, Texas, Washington and Wisconsin.

The bottom line is that it's important to do the math both ways -- filing separately and jointly -- to see which provides the overall lowest tax liability.

The content on this post is not intended to provide tax, legal, accounting, financial, or professional advice, and readers are advised to seek out qualified professionals that provide advice on these issues for specific client circumstances. In addition, the publisher/blogger cannot guarantee that the information on this website/post has not been outdated or otherwise rendered incorrect by subsequent new research, legislation, or other changes in law or binding guidance. The publisher/blogger shall not have any liability or responsibility to any individual or entity with respect to losses or damages caused or alleged to be caused, directly or indirectly, by the information contained on this website/post.

 

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Your Smart TV Could Tell Others All About Dumb Stuff You Do

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big brother is watching you
Shutterstock
By Bob Sullivan

Read it and weep: "Samsung may collect and your device may capture voice commands and associated texts so that we can provide you with Voice Recognition features and evaluate and improve the features. Please be aware that if your spoken words include personal or other sensitive information, that information will be among the data captured and transmitted to a third party through your use of Voice Recognition.

"If you do not enable Voice Recognition, you will not be able to use interactive voice recognition features, although you may be able to control your TV using certain predefined voice commands. While Samsung will not collect your spoken word, Samsung may still collect associated texts and other usage data so that we can evaluate the performance of the feature and improve it."

As a leader of the oft-paranoid-sounding-privacy-sensitive crowd, let me be the first to congratulate Samsung for its honesty. Plenty of my friends in paranoia have pointed out the language included in Samsung's new SmartTV privacy policy. Because the gizmo uses voice recognition to let owners change the channel and do other cool things, naturally the TV has to "watch you." And anyone paying attention knows just what that means: "Please be aware that if your spoken words include personal or other sensitive information, that information will be among the data captured and transmitted to a third party," says Samsung's privacy policy.

Paranoid? Join the Club

Am I just being paranoid, or do you also dislike the idea of your living room chatter being recorded and sent off to unknown "third parties?" Don't answer that.

In truth, this is just lawyer-speak. Samsung and its partners don't want to hear about your Aunt Ethel's health problems, and they don't want to listen in on your make-out sessions (the company even confirmed its listening intentions in a recent blog post). Really, I believe that. Any gadgeteer working on systems like these, which are tricky and usually clunky, wants to know how they are being used any how to improve them. Of course. A very responsible lawyer forced the firm to include that disclosure in the interest of completeness. It sounds worse than it is. Until, it isn't.

Recall that every record stored in any computer anywhere can be obtained by law enforcement, or really anyone acting on behalf of a court of law. Forget Ed Snowden and super-spooky FBI software monitoring phone calls. The FBI can simply ask Samsung, or its "third-party" suppliers, and obtain records of what happens in your living room. So can (until someone proves otherwise) folks investigating civil claims, such as.....divorce lawyers. Those makeout sessions would be of plenty of interest to them.

The 'Privacy' of Your Home

"I totally can see the FBI or others approaching Samsung ... probably without thinking there's any need for a warrant .. and saying they were after a 'bad guy' and 'asking' for that data," said a former colleague of mine, Steve White. He is now president of White Marsh Forests, a firm working on machine learning technology. "Happened regularly at MSN...MSNBC. Now I'm staring warily at my Samsung laptop."

To be clear, it's settled law in the U.S. -- any information you share with a "third party" private company can be obtained by law enforcement. You surrender any expectation of privacy once you disclose something to a corporation, or any third party. It's the biggest end-around in American privacy law.

Don't blame Samsung for this. It's just telling the truth. I hope you are now wondering about any other gizmos you have invited into your home that watch you. Smart thermostats? Internet-enabled crock pots? Yup, these things can squeal to anyone about you. They can relate when you come home at night and plenty of other very personal details about your life. Any technology that watches (or listens) to you creates a record that can be used against you. Even if you are in the "privacy" of your own living room. And our living rooms (and bedrooms) are about to be inundated with this stuff under the friendly name of the "Internet of Things."

The problem is the law. Of course Samsung should be able to see how its technology is working, and be able to learn from real-world uses. We just need to pass laws that make it expressly, unequivocally illegal to use that information for anything other than its intended purpose, and require that it be permanently deleted as soon as that intended purpose is complete. Notice, I didn't say the data should be anonymized, because (if you've been paying attention), it's really hard to anonymize data. It needs to be deleted. The privacy of 100 million living rooms shouldn't be up for grabs so law enforcement might have a slightly easier time catching a criminal every once in a while. That's not the way America should work.

Thanks, Samsung for helping me feel a little less paranoid. And hopefully making a few more people feel a lot more paranoid.

This is an op/ed contribution to Credit.com and does not necessarily represent the views of the company or its partners.

 

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Which Studio Has Most to Gain Sunday? Not One You'd Expect

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Fox Home Entertainment And Fox Searchlight's Birdman Special Screening And Performance
Earl Gibson III/Getty ImagesActor Michael Keaton attends a special screening of "Birdman," the Oscar-nominated film in which he stars.
Most actors will say it's an honor just to be nominated for an Oscar. But when it comes to the movies themselves -- and to the benefits for the studios that make them -- there's a big difference between winners and nominees.

2013 film nominees added just under $168 million in U.S. grosses from the date their privileged status became known through the end of their theater runs, according to historical data supplied by Box Office Mojo. Winner "12 Years a Slave" accounted for $17.6 million of that total -- a better than 45 percent boost to its domestic earnings. (That year's nominees averaged a 26 percent gain.)

The True Value of an Oscar

For studios, the Oscar effect is like a bonus. Release a film that does well critically, and theaters keep it around longer, adding earnings that would otherwise be lost to new films taking their turn in the cineplex. This Sunday, one studio has more to gain than its peers.

We'll get to who I'm talking about in a minute. First, let's review the financial benefits of an Oscar win, drawn from my analysis of four years' worth of results:
  • On average, Best Picture nominees see a 36.9 percent boost in U.S. theater grosses after receiving the honor. Winners enjoy an average 46.8 percent gain.
  • The average nominee grosses $30.2 million domestically. The average winner grosses $237.4 million.
  • Timing heavily influences post-nomination returns. For example, "The Help" exited theaters before being named a 2011 Best Picture nominee. A handful of theaters re-released the film in response, leading to a meager 0.06 percent gain in grosses.
  • By contrast, the military epic "Zero Dark Thirty" enjoyed plenty of Oscar buzz at the time of its Dec. 19, 2012, release, resulting in a 1,739.84 percent post-nomination boost.
  • Over the past three Academy Award competitions, October (two winners) and November (one winner) have been the best months for releasing Best Picture contenders. Among the eight Best Picture nominees for this go-round, half made their debut during those two months.
  • From 2011 to 2013, Sony (SNE) was the only studio to distribute at least two Best Picture nominees. None of its pictures won.
What to Look For Sunday

Which studio has the most to gain this year? Not Sony, it turns out. The studio's only entry in this year's Best Picture showdown is the small-budget phenom "Whiplash."

By contrast, 21st Century Fox (FOXA) is distributing two contenders: "Birdman" and "The Grand Budapest Hotel." The latter is a particularly strong earner, having collected an estimated $48 million in gross profit from theatrical and home video sales.

"Birdman," at $9.1 million and a more meager 12.6 percent estimated profit margin, would benefit from the buzz that follows an Oscar win. Star Michael Keaton already took home the honor for Best Actor in a Comedy or Musical at this year's Golden Globe awards.

Time Warner (TWX) could nab Oscar gold for its role in producing and distributing "American Sniper," but that film already has all the buzz it needs to help the studio win financially. "Sniper" entered the week having already earned over $100 million in estimated box office gross profit.

Among the remaining candidates, Focus Features distributes "The Theory of Everything," The Weinstein Co. backs "The Imitation Game," and Paramount helped release "Selma," which, according to my estimates, remains about $16 million in the red as of this writing. Fortunately, the Viacom (VIAB) business unit didn't spend to produce the civil rights biopic, so its losses -- if there are any -- should be minimal.

Small Bets With Big Results

Which brings us back to Fox and its Fox Searchlight imprint, which produces and distributes small-budget films that aren't only acclaimed but also profitable.

Last year offers a great example. Fox Searchlight distributed "12 Years a Slave" worldwide, helping the film gross $187.7 million globally in exchange for a share of the proceeds. (A mere $20 million production budget made sure there was plenty to go around.) In 2011, the studio helped produce and distribute the George Clooney drama "The Descendants," a five-time nominee that won the Oscar for Best Adapted Screenplay and earned $177.2 million globally -- also on a $20 million budget.

Small-budget movies like these may not earn Fox the fistfuls of cash that cable TV does, but it's still a good business capable of producing impressive margins. A few wins Sunday for "Birdman" and "The Grand Budapest Hotel" would only add to the windfall.

Motley Fool contributor Tim Beyers never settles for the consolation prize. He owns shares of Time Warner and Walt Disney and can be found on Twitter as @milehighfool. The Motley Fool recommends and owns shares of Walt Disney. Try any of our Foolish newsletter services free for 30 days. To read about our favorite high-yielding dividend stocks for any investor, check out our free report.

 

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Watch Your Favorite Shows Without a Cable or Satellite Bill

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By Naomi Mannino

Ever click through all 700 HD channels on your cable or satellite service channel lineup only to announce, "Nothing's on" with a long sigh? Maybe you added a streaming service such as Netflix (NFLX), Hulu Plus or Amazon (AMZN) Prime to get more shows when you want them. Or maybe you want to cut the cable cord entirely and just use video streaming but are worried about missing live sports and live news. SlingTV -- a new streaming package by Dish Network (DISH) but without the dish -- just might make cutting the cable cord complete.

"Sling TV includes ESPN and CNN among others and is a great option for people who want to cut the cable cord but can't live without those additional live sports and live news channels," says consumer savings expert Andrea Woroch. Online streaming services like these add more options to the traditional TV channel lineup from a paid cable or satellite provider.

Digital TV Research projected the number of worldwide households using subscription video-on-demand -- also known as SVOD -- would grow from 21 million in 2010 to 83 million in 2014 and 199 million in 2020.

With SVOD apps using a streaming device connecting your TV to the Internet, there is now the option of cutting out the paid cable subscription service (and bill) entirely, but there is a learning curve and you'll need a major attitude adjustment. Once you've learned to watch TV this new way, you'll be getting so much more from your TV while paying much less.

Cancel the Cable/Satellite Service -- and the Bill

If you've been paying for cable or satellite TV, you paid an average of $86 per month in 2011, according to The NPD Group. Rising to a 2015 prediction of $123 per month, you could be spending $1,476 per year -- just for pay-TV programming.

Could you use that extra cash elsewhere in your budget? If so, simply call up your provider and cancel your service. Be prepared for the provider to offer to reduce your rate or try to get you to bundle up and pay even more. Once the cable or satellite box is gone, you'll need to reconfigure your TV for SVOD viewing.

Connect Your TV to a Video Streaming Device

If you hate watching TV on your iPad or computer, you'll need to connect your TV (via the HDMI port) to a video streaming device which connects it to the Internet wirelessly, as 47 percent of households already did in 2014, according to NPD Group. Then, you suddenly have access to a whole new world of viewing content in the form of apps that represent each channel you already know and love -- plus many more you've yet to discover.

John Buffone, an industry analyst for The NPD Group, says one of the big changes this year is increased affordability of these devices, with an average one-time price as low as $35. "Since cost is removed from the equation, you can try the one that appeals to you most," he says.
  • Roku: ($49 at Walmart (WMT) online) is a tiny device loaded with hundreds of free and paid SVOD apps accessed with its own remote.
  • Google's (GOOG) Chromecast: ($34.99 at Walmart online) uses your Smartphone, laptop or tablet as the remote. When accessed via a laptop it can pull up any webpage onto your TV.
  • Apple (AAPL) TV: If you're a big Apple user, the Apple TV ($92.95 at Walmart online) device can access all content from your iPhone and iPad as well as a huge library of TV and movie viewing apps.
  • Other choices include streaming devices from NetGear and the new Amazon Fire TV ($99 on Amazon.com). Blu-ray Disc players and gaming consoles such as PlayStation 3 or Xbox One also double as streaming video devices.
Pay for a Few Cheap SVOD Services

SVOD or over-the-top-TV paid subscriptions are a mere fraction of what your cable TV bill was. It used to be if you didn't know about a show you simply missed it or you'd jump in mid-season. Now you can binge-watch as many episodes as you want when you want. At $7 to $10 per month, these services each offer something different, with a lot of crossover, so choose the one(s) most meaningful to you.
  • Netflix: You can watch an entire production, every season from the pilot to series finale or the last completed year, for most major TV series (updated often) such as "Downton Abbey," "Mad Men" and "Breaking Bad" plus have access to some exclusive, original award-worthy Netflix series you may have heard about, such as "House of Cards" and "Orange Is The New Black." There's also a huge catalog of documentaries, kids' shows, reality TV, stand-up comedy and movies. Netflix learns what you like and suggests new shows and movies without ads or added fees. New 2014 members pay $8.99 monthly while existing subscribers keep their $7.99 monthly fee. Use the Netflix free trial month to see if shows you want are available. If not, you might also need Hulu Plus.
  • Hulu Plus: This SVOD service differs in providing current season TV viewing the next day after episodes actually aired. So, for example, if I love to watch Comedy Central's "The Daily Show" (not available on Netflix), I can watch it whenever I want on Hulu Plus which offers many episodes of the current season, but not the entire season or series like Netflix. Hulu Plus also has many original and exclusive shows and costs $7.99 per month with no additional fees, although the ads are annoying. Now, some networks are getting smart and not selling the rights to their shows universally or on Netflix or Hulu Plus -- and that's when you need Amazon Prime.
  • Amazon Prime: CBS's "Extant" and "Under the Dome" have exclusive streaming agreements with Amazon Prime, the only place you can see the show on-demand and if you do not have local network access. And most recently, Amazon gained permission to exclusively stream a vast amount of past and present HBO content. While they do offer viewing from the pilot to present, the current season and sometimes the prior season are pay per view which defeats the purpose of having Amazon Prime, although you do also get that free two-day shipping. And, they just raised the yearly price from $79 to $99 per year in 2014, (still, that's just $8.25 per month).
  • Sling TV: Now you can finally close the gap on some cable channels that are just not available on any other TV streaming service such as ESPN, ESPN2 and CNN. Sling TV by Dish Network offers an app for any Roku (it is not currently available on Apple TV, Amazon Fire or Chromecast). Still the current hook-up availability includes 20 popular channels you may have been missing for just $20 per month. Beware: while you can download the app onto all your devices, only one person can watch Sling TV on your account at one time. Sling TV has a 7-day free trial so you can evaluate whether you watch it enough to warrant the additional $20 per month.
So for the three major SVOD services, you have a massive amount of new, current and past programming to explore via apps on your streaming device to use at will for just about $24 per month compared to that $100 monthly paid cable or satellite subscription. If you add SlingTV, you're up to $44 per month plus tax. Woroch advises you use all the free trials for streaming subscriptions if you want to cut the cable or satellite cord entirely too see which you want to watch the most.​

CBS last fall introduced its All Access service for $5.99 a month, and HBO has a similar deal. And there are hundreds more free TV channel apps -- including those from most network and cable TV channels offering a lot of free content such as History Channel and PBS.

Do You Want Local Network Channels?

Now, if there is still a network show in season that you can't live without such as "The Big Bang Theory" or your local news or even special network events such as the Olympics or local market sports coverage which you want to watch as it airs or it is not available or it is not available on any of SVOD services or devices, then you might want to get a local network antenna.

Depending on many factors, they can range in their one-time price from $30 for an indoor antenna to $250 for a large outdoor antenna installed. There is no single type of antenna that will work for everyone as TV reception depends on your distance from the broadcast signal, its strength, obstructions and more. Check the Consumer Electronics Association's www.AntennaWeb.org to identify appropriate antenna attributes based on your location.

Do You Want Full-Market Sports Coverage?

With your network antenna you'll have the local market sports coverage from Fox and CBS plus NBC's "Sunday Night Football" and CBS' "Thursday Night Football." But if that's not enough, you may need a pricier SVOD app such as MLB.TV, which costs $125 last season ($10 per month) for access to every out-of-market season game.

DirecTV (DTV) will sell you NFL Sunday Ticket without a full satellite subscription, but it costs hundreds of dollars per season.

Forget TV Schedules Forever

Back when DVR became popular you could record shows and watch when convenient for you, but with limitations. "These new apps coupled with the devices remove the need to remember schedules or record shows," Buffone says. "They are simply there when you want to watch them."

For those addicted to "Game of Thrones" or who are desperate to watch the current Season 5 of "The Walking Dead" or other paid cable exclusive channels, there is no other way to get it without paying for it.

Woroch adds, ""The problem now is that people want it all and now that Netflix, Hulu Plus and Amazon Prime are all producing exclusive shows (think: Netflix's "House of Cards" among many others ), consumers may want to keep all the streaming subscriptions including the paid cable."

For this reason, Buffone says most people won't cancel their cable subscription and adopt this cheaper, more flexible way of watching TV and instead add SVOD on to their paid subscriptions. What about you?

 

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Amazon Studios Will Be Making Oscar Contenders Soon

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Not everyone cheered when Amazon.com (AMZN) revealed its plans to make movies. Why? Some fear that films are too risky an investment compared to episodic programming.

There's certainly logic in that. Netflix's (NFLX) initial $100 million bet on "House of Cards" bought two seasons and 26 episodes. A $100 million movie would buy 90 to 120 minutes of something that offers zero guarantee of box office success. Nevertheless, my study of cinema's most acclaimed films says Amazon investors have a lot less to fear than the skeptics might think.

What Amazon Is Really Doing

Before we get to the numbers, let's review what we know about Amazon's plans. Studio executives aim to fund and bring to theaters 12 movies each year, putting the company on par with majors such as Disney (DIS), 21st Century Fox (FOXA), Paramount Pictures, Sony (SNE) and Time Warner (TWX), all of which distributed at least 13 movies last year. Features will stream on Amazon Prime within four to eight weeks of theatrical release.

Don't expect theater operators to like that model. Shared-revenue agreements tend to skew at least 90 percent of the gross in favor of film distributors through the first two weeks and 80 percent or more in the two weeks following. Cinemas that keep audiences coming in to see films weeks after release are more likely to produce sustainable profits. By taking its films out of the rotation early, Amazon could be cutting one of its key distribution partners off at the knees.

Why Amazon Can Break the Rules

Or not. Unlike studios, which depend on earning a return from the movies they make, Amazon is interested in driving audiences to its Prime service. The studio has leverage to offer better terms to theaters in exchange for showing its films early and often, making up the difference via new Prime members who sign up to see a buzzed-about movie they might have missed because of a short theater run.

Outgoing CFO Tom Szkutak hinted at Prime's draw for entertainment consumers during last month's fourth-quarter earnings call. Specifically, he said that Prime customers who arrive through a video free trial renew at higher rates than other members. They also tend to purchase more.

Worldwide, Amazon's paid Prime membership grew 53 percent year over year in Q4. That's a fast-growing, captive audience for original content. And yet the e-tailer doesn't necessarily need a fattening Prime membership to cash in on in-house movies. Blu-ray and DVD distribution are already in the works for original series "Transparent" and "Bosch," Variety reported last year. Movies would be no different, and you can bet that Amazon would take a markup on every disc sold.

The Financial Profile of an Oscar Contender

But that's the gravy. The steak in this deal is how Amazon plans to develop and distribute original movies. Reuters quotes spokeswoman Sally Fouts as saying that Amazon plans on spending $5 million to $25 million for original features, or about the same as what studios pay to make independent films that boast an Oscar pedigree.

Look at this year's nominees. Studios spent just over $20 million on average to produce the eight films up for Best Picture on Sunday night. All but one is profitable, and the highest margin producer -- "Boyhood," at 39.08 percent when you include home video sales -- also happens to sport the second-lowest production budget, at just $4 million. Amazon is aiming for that same sweet spot.

Don't be surprised if CEO Jeff Bezos and his team hit the mark after a few tries, striking Oscar gold in the process.

Motley Fool contributor Tim Beyers enjoys a good Oscar party as much as the next movie maven. Find him on Twitter as @milehighfool. Tim owned shares of Disney, Netflix, and Time Warner at the time of publication. The Motley Fool owned shares of and recommends Amazon.com. Try any of our Foolish newsletter services free for 30 days. To read about our favorite high-yielding dividend stocks for any investor, check out our free report.

 

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Save by Booking a Trip through BJ's, Costco or Sam's Club

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By Ann Rivall

If you've ever shopped in a wholesale retail store like Costco (COST), Sam's Club (WMT) or BJ's Wholesale, you're probably more familiar with their barrels of cheese balls and big bottles of olive oil than you are with their vacation packages. While these membership-only warehouse clubs have cornered the market on buying groceries in bulk, they haven't made as big an impact on the travel industry -- yet. BJ's started providing travel services in 1990; Costco in 2001; while Sam's Club started in June 2014.

Offering deals on everything from cruises to rental cars, wholesale retail clubs are quickly becoming a one-stop shop for members' travel needs. So why should non-members care? Because these clubs are selling deals that are often better than what's found on popular third-party booking sites like Expedia and Hotels.com. The bargains come attached to yearly dues that range from $45 to $55 for a basic membership, but for many current members, the discounts are worth the fee.

What They're Selling

When it comes to travel services, wholesale retail clubs maintain the same approach used in-store: Provide everything a consumer could need, from mattresses to beef jerky, and offer it at a discounted price. Peruse the travel services section on the websites of Costco, Sam's Club or BJ's Wholesale, and you'll see their offerings run the gamut from flights and cruises to car rentals and theme park tickets. Sam's Club even offers deals on vacation rentals and airport shuttles.

But the inventory can be restricted compared to what you might find on other travel booking sites. "We didn't use Costco for airfare in any of our trips and booked that separately," said Paige Dawson, a Costco member who has booked several vacations through the club, including trips to Hawaii and Spain. "The air options were more limited in terms of carriers, and also for some of the trips we used miles for either flights or upgrades."

For Seong Ohm, Sam's Club senior vice president of merchandise business services, the at times narrow options are the result of the company's commitment to providing only cost-effective, high-value choices for its customers. "We know members are paying to shop with us. If we can't show value, we won't offer it," Ohm said.

The Deals

Costco members save 10 percent at Hyatt Hotels (H) and Best Western properties, but beyond those discounts, Costco doesn't offer much in the way of hotels. Vacation packages -- which can include extras like car rentals, breakfasts and resort credits -- are Costco's specialty. For a five-night stay at Aulani, a Disney (DIS) resort and spa, Costco offers a package starting at $1,019 per person (for travel between May 1 and May 31) and it includes a full-size rental car. Compared to a similar search in Februrary on Hotels.com, a five-night trip to the same resort in late May costs $2,070 per room, without the rental car.

Included extras like these were one reason Nick Valente, a five-year Costco member, decided to book his honeymoon in July 2014 to Kauai and The Big Island through the wholesale club. The vacation package he selected included a car rental, daily breakfast, complimentary upgrades and resort credits. For Ohm, who recently booked a three-night stay at Wynn Las Vegas (WYNN) through Sam's Club Travel, she paid a nightly rate of $210 and received a room upgrade complete with a panoramic view. According to Ohm, that was the lowest price she found when comparing several other booking sites. Indeed, a Hotels.com search for a three-night stay between April 16 and 21 at the Wynn turned up a nightly rate of $399, while Sam's Club offered a nightly rate of $249, plus two free breakfast buffets.

The Benefits

The prospect of resort credits and vacation add-ons isn't the only reason members are choosing to book through these retailers. "The prices were exactly the same as all of the other travel sites - I mean, to the last penny," said Kelly Seiler, who has been a Costco member for eight years and booked a Disney cruise through the retailer in 2014. "The reason we went with Costco, though, was because, if we booked through them, we received a Costco gift card."

In Seiler's case, she and her family ended up with a $400 gift card, which translated to $400-worth of free groceries for them. BJ's also offers gift cards for cruise or vacation packages booked through the site, in addition to rebates for hotel reservations. Sam's Club offers a similar incentive for its members with its TripleDip rewards program. Through the program, members accumulate one point for every dollar spent for booking hotels, airfare, vacation packages, cruises and Hertz car rentals through the club. These points can be used to pay for future hotel reservations.

The Trade-Offs

Aside from inventory limitations, there are a few other compromises you must reckon with if you choose to book through a wholesale retail club. If you reserve a hotel through BJ's Wholesale or Sam's Club, you're not booking directly with the hotel like you would with Costco. As with other travel third-party booking sites, this could pose a problem if you encounter any hiccups with your trip or if you want to change or cancel your reservation. But Ohm notes that Sam's Club offers round-the-clock customer support and adds that the company is willing to "hand-hold" customers through any unexpected trip snafus. Seiler backs up Costco's customer service with her own Disney cruise experience: "The travel agents were extremely helpful and I spoke to them numerous times on the phone -- I wasn't just booking blindly on a website."

Another drawback? Rebates, specifically at BJ's Wholesale Club. Part of the advertised enticements on BJ's website are its rebates, but the fact that you have to fill out a form online and wait to receive cash back (up to three weeks after booking) is enough to turn consumers away who would rather reap the benefits immediately upon booking. As with most travel booking sites, there is a hefty amount of fine print to read. Does this nightly rate include the daily resort fee? Are the government taxes, fees and fuel surcharges included in the overall cruise fare? And if you're a loyalty member with a hotel or airline, you could also be missing out on the opportunity to use or earn frequent flier miles or loyalty points by booking through a wholesale retail club, as Dawson noted above.

Still, even with the potential shortcomings, Seiler, Dawson and Valente are satisfied with their wholesale vacation, responding to the question of, "Would you book another trip this way?" with a resounding "Yes."

 

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16 Ways to Get Bigger Checks From Social Security

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How to Get More Social Security When You Retire

By Marilyn Lewis

If you have focused all your retirement planning energy on your 401(k), you may be missing a key piece of the puzzle: Social Security. You can influence your eventual payout from this safe, dull old-age safety net to a surprising degree by making some adjustments and changes in your planning. The time to get started pumping up your Social Security checks is now, even if you've got decades to go before retirement.

1. Work More Years

You must work at least 10 years to collect Social Security. The size of your benefit checks is decided by a formula that is based on your 35 highest-earning years of work. If you didn't work 35 years, the formula uses zeros for the missing years. Zero years lower your benefits, so add as many more years of work as you can. SocialSecurity.gov explains the details and shows how benefits are calculated.

2. Avoid Claiming Too Early

Your age when you start Social Security makes a big difference in the size of your checks. (This chart shows how.) You can start as early as age 62, but your checks will be forever 25 percent to 30 percent less than you're due, depending when you were born. And, if you die first, your spouse's Social Security survivor benefits will be smaller than if you'd waited.

Some people have no choice. Many retirees stop work earlier than they planned because of illness, unemployment or to be caregivers. In that case, try to use other sources of income if possible, so you can hold off claiming until you're older.

3. Aim for Full Retirement Age

Social Security calculates monthly checks on your "full retirement age." That's when you are eligible for 100 percent of your Social Security benefit. Full retirement age varies: It's age 66 for people born from 1943 to 1954, increasing gradually to 67 for those born after 1959. To get all the benefits you can, use this Social Security calculator to find your full retirement age and plan your retirement around it. The longer you wait, the larger your checks and your cost-of-living adjustments, which are based on your monthly checks.

4. Raise Your Income

Doing what you can do now to grow your income will fatten your Social Security checks in the future. Use the Social Security Retirement Estimator to see the effects of more income on your benefits. The estimator taps into your personal work history to give a reasonably accurate estimate of benefits.
Some ways to boost your income: 5. Go for the Gold: $2,685.50

The average Social Security check this year is $1,328 for those who collect at full retirement age, according to the Social Security Administration. But you may be able to do better -- much better. In 2015, the maximum monthly amount paid is $2,685.50, the SSA says. That's more than double the average. Planning counts. Use the Social Security Retirement Estimator, even in your 40s, 50s or early 60s, to see what you'd need to do (retire later? earn more now?) to max out your eventual monthly benefit.

6. Hold On Until Age 70

Delaying Social Security as long as possible isn't for everyone. If you have reason to believe you won't live long, perhaps you should collect early. But, if your relatives are long-lived and you're fairly healthy, you may outlive your retirement savings. Americans' life expectancy is rising: it's at an all-time high of nearly 79 years, according to the latest numbers from the Centers for Disease Control and Prevention. Men live an average of 76.4 years; women, 81.2 years.

Lock in a higher income in your late 80s and 90s by waiting to collect Social Security until you are 70. That grows your benefits by as much as 8 percent a year, as good or better than you can do in the stock market. An example from SSA: a $750-a-month benefit at age 62 grows to $1,320 a month by waiting to age 70. There's no benefit, though, in waiting past 70. Learn the facts of your case by calling Social Security at 800-772-1213. Or find an office near you and pay a visit.

7. Get Professional Help

In many instances, an informed decision about when to claim which Social Security benefits can boost benefits by tens of thousands of dollars over your lifetime, especially for couples. Various companies will prepare a customized analysis revealing exactly when to claim Social Security benefits to receive the maximum lifetime payout. Because the claiming strategies for couples can be complex, an inexpensive analysis showing exact dates when each of you should claim could be well worth the cost. Kiplinger offers one for $49.95. Social Security Choice sells its product for $39.95 and, in partnership with Money Talks News, offers a $10 reduction (use coupon code "moneytalks").

8. Look Into Spousal Benefits

Married people have an advantage in the Social Security system. Even a spouse who never worked can claim benefits. Married people can receive half their spouse's Social Security benefit, and that may be more than they'll make on their own. Divorced people (here are the rules) married 10 years or longer qualify, too. Here is the SSA explanation of same-sex couples' benefits and rights. To get spousal benefits you must be at least 62 and your spouse, the primary worker earner (government jargon for the one with the biggest benefit), must be receiving Social Security checks or be eligible for them.

9. Pump Up Your Spouse's Survivor Benefit

When you die, your Social Security benefits end. But your widow or widower may earn survivor benefits, possibly as much as half of your full retirement amount. (Here are the SSA rules.) The bigger your benefit, the more your spouse will receive when you're gone, so do all you can now to increase your benefit checks.

10. Weigh the Cost of Working While Claiming Benefits

The government reduces your Social Security checks by $1 for every $2 you earn if you start your benefits before full retirement age and make more than a threshold ($15,720 in 2015, and the penalty stops on earnings above $41,880). See the rules to weigh the pros and cons of working while collecting Social Security. You might decide it's better to hold off collecting, given the penalty and the fact your benefits will keep growing while untouched. And, remember: You'll get all the money back in bigger checks after you hit full retirement age, the SSA says.

11. File and Suspend

A great way for married couples to increase their combined payout is to "file and suspend," as Kiplinger explains in an article on Social Security strategies for married couples. Here's how it works:
  • The older worker, a husband, for example, files for benefits at full retirement age and asks to suspend those benefits instead of receiving them. That lets him keep on working, or drawing income from other sources, so his benefits can keep growing.
  • This allows the wife, starting at age 62, to claim spousal benefits instead of early retirement on her own work record. Now both spouses' benefits can keep growing while the couple enjoys income equal to about half the husband's full-retirement benefit.
  • The husband can collect super-sized benefits when he's 70, and the wife can continue collecting spousal benefits or claim benefits on her own account, whichever is larger. In addition, if the husband dies first, his wife's survivor benefit now is as great as possible.
12. File a Restricted Application

If you're the higher earner, you can bring in some extra money by applying for a spousal benefit at your full retirement age, and still allow your own benefit to grow until age 70. Once you turn 70, you can switch to your own benefit and your spouse can claim a spousal benefit, of up to 50 percent of your primary insurance amount. However, her survivor benefit will equal up to 100 percent of your delayed benefit if you die first.

13. Watch Out for Taxes

If your only income in retirement is from Social Security, you probably won't have to worry about paying income tax. But if you have additional income from other sources, try to reduce your total income to minimize the tax bite. Depending on your income, up to 85 percent of your benefits could be taxed. Taxes are based on your combined income: your adjusted gross income plus half of your Social Security benefit plus non-taxable interest. The SSA explains in detail.

If combined income is more than $34,000 ($44,000 for couples), as much as 85 percent of your benefits may be taxable. You can reduce your tax bill in retirement by cutting expenses so you need less income and choosing investments with an eye to reducing taxes.

14. Pay Off Debts

Certain debts, including federal taxes, child support or alimony and federal student loan balances, can be garnished from Social Security checks. Pay them off before retirement so you can keep your entire benefit check.

15. Check for Errors

Keep an eye out for your Social Security statement in the mail each year or find your statement online. Look it over to ensure your income is reported correctly. Get credit for every penny you've earned to boost your eventual benefit checks.

16. Collect Benefits for Minor Children

Once you start collecting benefits, your unmarried dependent children 18 or younger can receive benefits (see details here), too. Biological children, adopted children, stepchildren and grandchildren are eligible as are (details here) full-time high-school students aged 18 to 19 and children disabled before age 22.

When do you expect to start collecting Social Security? Chime in by posting a comment below or at Money Talks News' Facebook page.

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Student Loan Time Bomb Is Ticking Louder

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Two things are very clear in the Federal Reserve Bank of New York's latest Quarterly Report on Household Debt and Credit: Americans have once again started borrowing, and student loans remain a ticking time bomb.

The Fed uses data from Equifax (EFX) to identify trends in consumer credit, and its report on the fourth quarter of 2014 show that consumer credit continues to increase overall. Total balances increased $117 billion, or 1.0 percent, driven by growth across virtually every type of credit. Delinquencies and defaults continue to improve for most types of loans. Mortgages, auto loans and credit cards continue to see improving trends, with more people able to make payments on time. Credit card delinquencies are at their lowest levels since 1999.

However, one area stands out: student loans. The 90+ delinquency rate (which measures the percentage of student loan accounts that are 90 or more days past due) has been skyrocketing. An incredible 11.3 percent of students loans are now 90 days or more past due -- up from 8.7 percent in the fourth quarter of 2009. The latest figure adds up to over $100 billion of overdue student loans.

Debt That Won't Go Away

This problem will only get worse. When students borrow money, no real consideration of their ability to repay is taken into account. People majoring in computer science at world class universities can often borrow just as much as people majoring in fine arts. While I strongly believe in a liberal arts education (and benefited from one myself), we have to recognize that the earning potential is dramatically different depending upon your area of study. Many students are waking up with debt that they will never be able to service.

Even worse, most student loans cannot be eliminated in bankruptcy. Although there are opportunities for people with federal loans to take advantage of means-based repayment, students with private loans are still largely out of luck, at the whim of their servicing companies. I have met too many people earning $25,000 a year with $50,000 of private student loans that will never go away.

The Fed labelled this "an ever-increasing pool of delinquent debt." The student loan debt burden can have significant economic implications for the borrowers, the government and society. First, the U.S. taxpayer is on the hook for the $100 billion (and growing) balance of student loan debt that people cannot afford to pay back.

This Affects You, Too

Just lending students more money to fund education -- without thinking about their ability to repay -- is a recipe for disaster. I wonder if sub-prime mortgage underwriters who lost their jobs in 2008 are now working for the government. And it is definitely time for an audit of the loss recognition policies of the US federal student loan portfolio. The government thinks it is making money from student loans. If we start building adequate reserves for student loans in default, that picture may look very different.

But the true loss is to the people with the debt and the larger economy. Having defaulted student loan debt that never goes away means that an individual will have limited ability to be a productive member of society. They will buy fewer cars, save less for retirement and have more stressful lives because they will be receiving daily calls from collection agencies trying to recoup the high interest and fees associated with a decision made in their teens. America has thrived because of a reset button available to all; the next generation has been robbed of that opportunity.

There was a time when you could pay for college by working a part-time job. And there was a time when a college education made sense, regardless of the cost or the major. Unfortunately, we no longer live in that world. And we are not preparing teenagers for the biggest financial decision of their lives. With delinquency already at 11.3 percent, we can only expect it to get worse.

Some Hope

There are two small nuggets of opportunity. First, the private sector is creating opportunities for people to refinance their student loan debt. At least 19 student loan refinance options exist. If your interest rate is above 6 percent, and you have a good job and income, you may be able to find a much lower interest rate with some of these new providers. Given the size of the student loan market, it is not a surprise that a vibrant refinance market will start to develop.

In addition, recent legislation for federal student loans has created the opportunity to lower your payments with an income-driven repayment plan. If you have a private loan, your options are more limited. But you should still give your servicer a call and see what options exist.

Keep an eye on that 90+ delinquency measure. The higher it gets, the harder it will be for us to ignore this problem.

 

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10 Surprising Facts About Retirement Life

Freeze Your Credit: The Secret Weapon Against Identity Theft

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Last year, when I discovered that my wife was the victim of identity theft, I was given all sorts of suggestions on how to remedy the situation and keep her -- and my family -- safe going forward. Some of the ideas were high-tech, and some were very low-tech. But even though I contacted all three of the major credit bureaus, none of them suggested the one thing you can do to ensure you don't become a credit fraud victim: freeze your credit.

Freezing your credit allows you to put a lock on your credit report so that it can only be accessed with a personal identification number, known only to you. Each credit agency will give you a unique PIN, and with this added security layer, thieves won't be able to establish new credit in your name, even if they obtain all your personal information.

Credit freezes have only traditionally been available to victims of identity fraud, but all three major credit agencies have recently changed their policies to make them available to everyone for a small fee. That fee varies from state to state but are generally $3-$10. The most expensive state is California, which charges $30. Place the freezes at Equifax (EFX), Experian (EXPN) and Transunion.

A freeze does not impact your existing credit cards or lines of credit so you can continue to use them like normal. It is only when new requests for credit are made that the freeze kicks in. And when there is a legitimate request for your credit report, like with a home mortgage or car loan, you can temporarily thaw your credit using your PIN.

The thaw takes about 90 seconds online. You can thaw your credit for a specific creditor or for a set period. The cost to thaw your credit depends on your state, ranging from free to $10 per incidence.

Children at Risk, Too

There is an alarming new trend in which thieves use the Social Security number of children to apply for credit, something that is usually not discovered until the child turns 18 and first tries to legitimately open an account. However, in most states, a credit freeze can also be done for a minor, which will stop any illegal activity before it starts.

Though a credit freeze is the best way to protect against identity theft, if you create new accounts on a regular basis, either for business or for personal use, you might think twice before initiating one due to the cost of continuous freezing and thawing.

You can also find out more about you're the specifics of doing a credit freeze in your state by going to the Security Freeze Laws page at the National Conference of State Legislators.

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