HELP ME CLARK!
From HLN's Money Expert Clark Howard

Pennie:
My husband recently retired from civil service and has $181,000 in his Thrift Savings Plan. We aren't sure whether to move this with our stockbroker into the market, or we have been offered a variable annuity through our bank. The money would more than double if something were to happen to him and if we decided in the near future that we didn't need this, we could cash it in with no surrender fee and the money would have earned 5% during this time.

What do you suggest that we do with this money to earn its greatest potential at this time of our lives?

Clark:
First things first: I'm so impressed with how much money you saved with the TSP. Second, the TSP is the best retirement plan offered in America.

Of the three options you have, you didn't mention the third one: to leave the money in the TSP. And I would avail yourself of that, because no other option is as low-cost for your money as that.

As for a variable annuity, don't walk but run away from the bank officer who encouraged you to do a variable annuity. Those are massive fee investments, and I use the word "investment" loosely.

It would be dangerous to your wallet.

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Clark Behind The Headlines

From HLN's Money Expert Clark Howard

This Toyota story has really turned into an ongoing soap opera.

At first, Toyota was in corporate cultural denial of the problems going on with the gas pedals getting stuck. Then, the company bungled its response to its customers, and it’s now falling all over itself to apologize. And Toyota is going to start with the repairs to people’s vehicles in the next week or so.

Now, what do you need to know if you’re a Toyota owner?

First thing: you don’t get an appointment – at least under the system they’re using now – until you get a certified letter from Toyota saying they’re ready for you. Toyota dealers are going to burn the midnight oil doing these repairs that – if Toyota is right and a simple shim will fix the problem – will be a pretty quick one. It should take about the same amount of time as an oil change. But it will take mechanics a short while to come up to speed on how to do it. There will be a learning curve. So you actually don’t want to be one of the first people to have your car repaired.

Should you be afraid to drive your Toyota? I remember when Audi went through this thing with sudden acceleration in the 80s. Audi absolutely blew the public response, and people became so afraid they parked their Audis in the garage or the driveway and didn’t drive them. I think that was a direct by-product of how Audi handled the problem.

In this case, Toyota – late in the game – is taking responsibility. And I would have no problem driving a Toyota. I’ve explained how you shift into neutral to stop a Toyota if it goes out of control, and there are several briefings on the Web about that.

Now, there is an oddball opportunity right now. I talked with people in the used car business about this to get a number. And what are known as late-model cars, from the last three model years, have seen a big drop in value. This is a temporary window, but you may save as much as $3,000 right now buying a used Toyota, vs. what that same car might have brought just two weeks ago. There are dealers right now that are even refusing to accept Toyotas in trade because they’re too worried about what the marketplace is going to do to the value of the vehicle after they take it into inventory.

The ultimate point here to me is one that comes up over and over again in politics: it’s never the problem, it’s always the cover-up. And if you look at the Toyota situation, a person or company can build up a good reputation over years and it can be destroyed in an instant. That’s what happened to Toyota in this case and they’re going to have to ask for forgiveness and rebuild their credibility step by step.

Let this be a message to anyone who owns a business. If you mess up, ‘fess up. It’s really that simple.

Clark Behind The Headlines
From HLN's Money Expert Clark Howard

Ok, got a quiz for you.

You probably have a checking account, possibly two. And a credit card, or two or three.  You may have a debit card that hits against your checking account.  How good are you at going through your statements and seeing what is being charged to your card or debited from your account?

If you’re like most people, that’s real hit-or-miss in your life.  You just don’t get around to it like you should.

Well there was a story in the Chicago Tribune about problems that a couple had with Dish Network, the satellite TV provider. Dish Network does a big push to get people to allow an automatic debit of their checking account, or an automatic charge to their credit card for payment.

Well, with anything like that you set up, what if they make a mistake?  I have no way of knowing if it’s a common problem or only an occasional one, but Dish Network has had a problem with mirror-imaging debits.

If you’re not familiar with mirror imaging and bookkeeping, it means if your bill was for, say, $106 a month, they somehow debit that $106 twice.  Well, this happened to a couple in suburban Chicago. And after not noticing it for months, they figured out that Dish Network had debited more than $2,000 that they didn’t owe.

They got their bank to reverse some of the charges, and eventually – after intervention from a local consumer advocate - Dish Network agreed to refund the rest. But it took a lot of time and effort.

The lesson for you is this: it’s important to check every bill you get, every statement for a bank account, and every card – especially if you have a debit card tied into a checking account.  You need to cross reference those debits.  When something’s not right, challenge it immediately with your bank or credit card company. When you do all those steps, you’ve done all that’s necessary to protect yourself.

But what may be first on the list with this kind of thing - reconsider setting up any kind of automatic debits or automatic charges to a credit card initiated by the company you’re doing business with.  If you want to set up something via your electronic bill pay, that’s fine.  But understand the danger when you allow a company direct access to your accounts.

HELP ME CLARK!
From HLN's Money Expert Clark Howard

Arnold:
We are credit card debt free. We have a mortgage, a car loan and a RV loan. We are able to make extra payments. Which would be the best one to pay down?

Clark:
Normally, the first question I'd ask you is, what are the interest rates on each of the loans? And that's how you set the priority.

Car loans normally carry a low enough interest rate for a short enough term that they're not a high priority to rush to pay off. Except this: the interest you pay on your mortgage loan is deductible on your taxes. The RV and car loans are not.

If I was looking at the three and just trying to guess, not knowing the interest rates, probably the highest-priority loan to pay off would be the RV loan. Those tend to carry the highest interest rates and have pretty hefty balances.

If your RV was financed by the manufacturer though, then you're likely better off just paying extra on your car loan.

Clark Behind The Headlines
From HLN's Money Expert Clark Howard

There's been a lot of fuss over the last few days about Apple's announcement of its new iPad. The iPad is not a revolutionary device, but I'm telling you there's going to be a lot of ongoing hype about it.

It weighs about a pound and has a 10-inch display. The device is something that is designed for you to be able to read on, watch television, watch movies and listen to music. As one techno-blogger has said, it’s essentially an iTouch that's bigger. And that may be an oversimplification.

But it is amazing when Steve Jobs makes an announcement how people in technology, and even outside technology, listen.

The elegance of what Apple designs is so over-the-top great. Now, I am someone who won't spend the money on something like that. I carry something known as the iTouch that I keep my schedule on. Its funny.. I don't watch movies on it, I don’t listen to music on it. I only use it as a productivity tool to check my email and do light web surfing.

But what I like about the iTouch is there's no contract, no cell phone fees or anything like that. The thing with the iPad is, you'll have to make a conscious decision to carry it around with you. And I can't see where that's something that I'll be particularly excited about.

The starting price for the iPad is going to be $499. And that’s a big deal because it sets a new standard. Just like the iPhone changed the way the cell phone market works in the United States - and we're still in early innings of the changes that's brought about - this will change your mind about how you access television, or how you access movies. Plus, I was reading a story yesterday that the Taiwanese were just waiting for the release of the iPad so they can come out with their versions of the tablet that will be much cheaper. As you know, that's what I'll be getting - one of the Taiwanese imitations instead of the real thing. Because, well, I'm just cheap like that.

HELP ME CLARK!
From HLN's Money Expert Clark Howard

Teresa:
I wanted to know what I can do to protect my deceased father's personal information and identity from theft and fraud. I have heard stories of family members using a deceased person's information to open credit cards and take out loans.

Clark:
I want to tell you that I'm sorry about the loss of your dad. It is a terrible, terrible problem because almost always, it will be a family member or friend who will take advantage of the death of a loved one and establish credit as if they're them. The good news is that when it does happen, there is no liability or responsibility for the estate of your late dad. And it's just one of those things that, unfortunately, there are people in the world who don't behave as they should. But in terms of any kind of real world consequences, other than some aggravation for the executor, executrix or administrator of someone's estate, it is not a high-priority hassle.

Money Coach with HLN’s Money Expert Clark Howard

Having trouble managing money? Do your money goals seem impossible? Clark Howard wants to help you!

We’re looking for individuals or families who are willing to be profiled on HLN. Those chosen will get money advice and information from Clark Howard.

This week’s question comes from Todd Bernstein of New York, New York.

Clark Behind The Headlines
From HLN's Money Expert Clark Howard

There’s a very significant thing going on with gas prices right now that you should be aware of.

When we’re in a time like we are right now, where gas prices at wholesale have dropped by such a significant amount in just a few weeks, in each metro area there will be big differences in the price of a gallon of gas from one station to another.

I took a poll of my staff today. I asked, “Who bought gas over the last few days?” Every hand went up but one. Then I asked, “What did you pay?” And the disparity in what people had paid per gallon was so much bigger than it normally is.

You’ll find the price difference in a typical metro area normally would be maybe 15 cents to 20 cents a gallon from the cheapest station to the most expensive one. Right now, the difference from the cheapest to the most expensive in most metro areas is about double that. Among my staff, the difference was 35 cents per gallon.

Why is that? Is the operator of the gas station with the most expensive gas ripping you off? No, he’s not. Most often, it has to do with delivery cycles.

There are stations that are known in the lingo of the gas station business as “pumpers.” Those are stations that sell huge numbers of gallons of gas per month. The busiest stations may get as many as three gas deliveries a day. The slowest stations may not get a delivery but once every few weeks. So during a time of falling prices, the highest-volume stations will be the first to reflect lower prices.

So if you were to buy gasoline at one of the supermarkets or warehouse clubs that have gas pumps, or an independent discounter that sells gasoline, you’ll find that their prices reflect the lower wholesale very quickly. The lower-volume stations are still pumping gas that they paid much more money for, and that’s why their prices might be much higher.

During a time of rising gas prices, the cycle is reversed. The low-volume stations will have the lowest prices, and the “pumpers” will have the highest prices.

So right now, if you normally don’t pay attention to the difference in what a gallon of gas is from one station to another, that will really harm you. This is a time when you do want to pay attention.

HELP ME CLARK!
From HLN's Money Expert Clark Howard

Laverne:
I'd like to retire this year, but I still have a small mortgage. I've heard of reverse mortgages, but is there such a thing as "deferred payment" options, to discontinue making house payments? At my death, my heirs would pay off the balance plus any interest which might have accrued. I have no other debt.

Clark:
If there is such a product, I've never heard of such a thing. A reverse mortgage would protect you in that it would provide you a set amount of income for the rest of your life. Or it would make it possible for you to have a reverse mortgage line of credit. That would put you in a position where you don't have to necessarily pay on the mortgage anymore. But that is a pretty desperate series of steps. If you have a small mortgage, I would prefer for you early in retirement to, if you need to, work a little part-time job so you can handle that mortgage until it's paid off. The really important thing when you have an obligation like that is, it's pretty small and eventually will go away. Work when you're a younger retiree and still healthy enough to work some part-time hours. Don’t wait until later on in retirement and say, "Uh oh, I need more money." And you may not be well enough or feel like working at all.