Ask Karen Gibbs

Veteran business correspondent Karen Gibbs answers your personal money questions and addresses current topics that affect YOUR finances on a daily basis. Karen is the financial expert in your corner--no question is too basic or too small. Karen boils down the issues simply: here's what you need to know, and here's what you need to do. Send your money questions to and post your comments below.



Should I take a buyout?

Karen Gibbs

Karen, what should I consider when deciding whether or not to take a buyout offered by my employer?

- David, Columbia

Older lady with gray hair David, if you’re over 50, chances are that, at some point, you’ll be offered a buyout by your employer.   Many companies use buyouts to cut their labor costs by cutting employees.  It’s a more palatable way of getting rid of workers than a layoff.  But make no mistake; if you’ve been offered a buyout, your days are numbered.

Assessing where you are in your career is a critical first step.  How old are you?  How long have you been with the company?  What are the possibilities of you landing another, similar paying job?  What do you want to do?  Are you ready to retire?

Next, talk with your human resources department and find out just what’s included in the buyout package.  Oftentimes a lump sum payout is offered, calculated on your age, salary and years of service.  While the amount may ...

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Part-time Jobs & Social Security

Karen Gibbs

Hi Karen, I’m thinking about getting a part time job.  Will that affect my social security?

- Brooke, Laurel

Person's holding a calculator in front of a reportThanks for your question Brooke. Part time work, defined as less than 40 hours per week, can offer you a great way to stay active, meet people, and earn money while giving you the flexibility to enjoy an ideal work-life balance.

Keeping active in the labor market also helps you stay connected with your industry while giving you the opportunity to explore new interests.

There are some drawbacks, however.  Part time work usually doesn’t come with benefits. Pay is generally lower too. Do you receive a pension?  Make sure it won’t be subject to any fees or penalties.

What about social security? If you’re younger than full retirement age (66 if born before 1954), part-time earnings could subject your social security income to taxes. Based on recent inflation data, your 2017 social security cost of living increase will be a modest 0.3%. That’s ...

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Karen, I’m on social security and received a notice that I must have a text-enabled cell phone to access my social security account.  I don’t text and don’t want to. Can I block access to my social security data?
- Concerned in Catonsville, MD

Man texting on a phone

Dear concerned, you can relax.  The Social Security Administration, in an effort to upgrade online security, had required a security code to be texted to your phone as a “multifactor authentication” security measure.

However, bowing to public and Congressional pressure, the Social Security Administration has rescinded the July 30, 2016 mandate and now no longer requires you to have a text-enabled cell phone.  Fewer older Americans use cell phones and those who do often find texting difficult due to vision problems or arthritis.

The Social Security Administration still strongly urges you to take advantage of what is now an optional extra security level.  Opening your personal social security account ...

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Refinancing a mortgage

Karen Gibbs

Hi Karen, I bought my home in 2007 with a 6.5% mortgage.  I’d like to lower my monthly payments. How do I go about refinancing my 30-year mortgage?

- Allison, Bel Air, MD

House with a for sale signThanks, Allison, for your timely question.  Mortgage rates have fallen dramatically since 2007, in part due to the mortgage crisis that led to the Great Recession of 2008, as well as low interest rate policy decisions by the Federal Reserve Bank.  Lower rates will lower your monthly payment which is comprised of principal and interest.

Refinancing means you pay off your current mortgage with a new mortgage.  This gives you options.  You currently have a 21-year loan at 6.5%.  Is there a pre-payment penalty?  Are you eligible to refinance?  Do you want to extend the length of the loan to 30 years or shorten your loan to 15 years?  Do you want to remain with a fixed interest rate or switch to an adjustable rate?  Are you pleased with the service provided ...

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Buying a Car 101 - continued!

Karen Gibbs

A follow up to my last column:  Paul asked for my thoughts about auto dealer financing, so here’s my smart thinking about money perspective.

Car in dealershipStart with your credit score.  The higher your credit score, the lower your financing rate will be; the longer the financing term, the lower the rate.  An excellent credit score of 750 or higher may qualify you for a zero-down, zero-interest loan, but it may be too good to be true.  You must crunch the numbers.

How much car can you afford?  Across the nation, affordability is an issue with average wages and salaries not enough to afford the average price of a new car.  Because of that, many buyers are financing for a longer term to lower the monthly car note.  If you need five, six or seven years to pay off the car, you probably can’t afford it. has a calculator to help you determine your price point.

Don’t forget to calculate license and registration fees, insurance, gas and ...

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