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ABC reaches settlement in 'pink slime' meat products case

Remember the controversy and resulting multibillion-dollar libel and defamation lawsuit over Lean Finely Textured Beef being dubbed “pink slime” by ABC News?

An undisclosed settlement has been reached, the parties said Wednesday. The South Dakota-based manufacturer of the meat product, Beef Products Inc. sued after ABC referred to the product as “pink slime” hundreds of times in news reports in 2012.

Beef Products Inc. and the Roth family issued this statement about the settlement of the case against ABC and reporter Jim Avila:

>> Read more trending news

“We are extraordinarily pleased to have reached a settlement of our lawsuit against ABC and Jim Avila. While this has not been an easy road to travel, it was necessary to begin rectifying the harm we suffered as a result of what we believed to be biased and baseless reporting in 2012. Through this process, we have again established what we all know to be true about Lean Finely Textured Beef: It is beef, and it is safe, wholesome and nutritious.”

“This agreement provides us with a strong foundation on which to grow the business while allowing us to remain focused on achieving the vision of the Roth and BPI family,” the statement read.

In a statement Wednesday morning, ABC said: “ABC has reached an amicable resolution of its dispute with the makers of ‘lean finely textured beef.’ Throughout this case, we have maintained that our reports accurately presented the facts and views of knowledgeable people about this product. Although we have concluded that continued litigation of this case is not in the Company’s interests, we remain committed to the vigorous pursuit of truth and the consumer’s right to know about the products they purchase.”

The settlement follows a trial that began on June 5. If BPI had won, it could have received a verdict of as much as $5.9 billion, according to published reports.

After the news reports, consumers were turned off by the term. At the time of the broadcasts, the product consisting of beef trimmings treated with ammonia was being used in 70 percent of ground beef. Demand fell, and BPI had to close three plants and lay off 700 workers.

Click here to read more about the meat product.

How to Set Up Your 401(k)

Every new job comes with a stack of documents to sign, initial and, months later, try to remember where they were hastily tossed. Race too quickly through this first-day ritual and you could be leaving thousands of dollars of employee perks on the conference room table.

If you missed the pitch for the company retirement plan during employee orientation, don’t worry. Unlike some employee benefits, such as opting in for insurance or setting up a flexible spending account, you can enroll in a 401(k) year-round.

If you haven’t enrolled already, consider eating lunch at your desk today and taking care of this 401(k) business.

6 steps to managing your 401(k)

Even though 401(k)s are called employer-sponsored retirement plans, employers are pretty hands-off when it comes to the setup process. Each worker is in charge of making the investment decisions in their own account.

Your human resources department will make the introduction and explain the high points of how the plan works. (They will not — nor are they allowed to — offer you individualized investment advice.) HR will pass the baton to the company’s 401(k) plan administrator — an outside financial firm — to handle the administrative details, such as enrollment, plan management, account statements and so on.

Next, it’s your turn. Here’s your 401(k) to-do list:

1. Sign up (if your employer hasn’t done it for you)

Some employers automatically enroll new employees in the workplace plan. They’ll start with a low contribution amount (such as 2% of an employee’s salary) and may even raise that amount by 1% annually up to a certain cap.

Those are just default options: You’re allowed to make adjustments to your participation level and investment choices within the 401(k) at any time once you’re enrolled, which can definitely be financially worth your while (see Step 5).

If your company has a waiting period before new hires are eligible to enroll, set a calendar reminder for the day you’re allowed past the velvet rope to make sure your paperwork goes through. Don’t give up even one extra moment to earn investment gains.

2. Choose an account type

Traditional 401(k)s are standard at workplaces, but more employers are adding the Roth 401(k) option, too.

As with Roth IRAs versus traditional IRAs, the main difference between the two types of plans is when you get your tax break:

  • The regular 401(k) offers it upfront since the money is automatically taken out of your paycheck before the IRS takes its cut (thus lowering your income tax bill for the year). You’ll pay income taxes down the road when you start making withdrawals in retirement.
  • Contributions to a Roth 401(k) are made with post-tax dollars (sorry, no upfront tax break), but qualified withdrawals are tax-free
  • Investment earnings within both types of 401(k)s are not taxed

Another upside to the Roth 401(k) is that, unlike a Roth IRA, there are no income restrictions to limit how much you can contribute. (Investors who are ineligible for a Roth IRA: Here’s your entree.)

The IRS allows you to stash savings in both a traditional 401(k) and Roth 401(k), which can add tax diversification to your portfolio, as long as you don’t exceed the annual maximum contribution limits ($18,000 for those under age 50 and $24,000 for employees age 50 and older).

3. Review the investment choices

The 401(k) is simply a basket to hold your retirement savings. What you put into that basket (the specific investments) is up to you, within the limits of your plan. Most plans offer 10 to 20 mutual fund choices, each of which holds a diverse range of hundreds of investments (such as individual stocks, bonds and cash) that are chosen based on how closely they hew to a particular strategy (e.g., small growth companies) or market index (like the Standard & Poor’s 500 or the Nasdaq).

Here again, your company may choose a default investment option to get your money working for you right away. Most likely it will be a target-date mutual fund that contains a mix of investments that automatically rebalances, reducing risk the closer you get to retirement age. That’s a fine hands-off choice as long as you’re not overpaying for the convenience, which leads us to perhaps the most important task on your 401(k) to-do list …

4. Compare investment fees

Fees are the enemy of investment returns. If you review only one thing about your company retirement plan, make it investment fees (often called “management fees” or “expense ratios”) and steer clear of any mutual fund that charges more than 1%.

According to trade association Investment Company Institute, the average expense ratio on an actively managed mutual fund (helmed by investment managers) is 1.31%, automated index funds average 0.71% and fees on target-date mutual funds (a hybrid of active management and index investing) average 0.94%. Opting for the lower-fee funds can save you hundreds of thousands of dollars in lost retirement savings over time.

Participants have less control over plan administrative fees (paid to the financial company that runs the 401(k) plan), but employees should still see how much it is. Some employers cover this fee; others pass some or all of it on to employees based on the percentage of assets each worker has in their account.

5. Contribute enough to get any employer match

Even the priciest 401(k) plan can have some redeeming qualities. Free money — via an employer match — is one of them. Contributing enough money to get the match is the bare minimum level of participation to shoot for. Beyond that, it depends on the quality of the plan.

A standard employer match is 50% or 100% of your contributions, up to a limit, often 3% to 6% of your salary. Note that matching contributions may be subject to a vesting period, which means that leaving the company before matching contributions are vested means leaving that money behind. Any money you contribute to the plan will always be yours to keep.

If your company retirement plan offers a suitable array of low-cost investment choices and has low administrative fees, maxing out contributions in a 401(k) makes sense. It also ensures you get the most value out of the perks of tax-free investment growth and, depending on the type of account (traditional 401(k) or the Roth version), either upfront or back-end tax savings.

6. Supplement your savings outside of a 401(k)

The IRS is so keen on individuals saving for retirement that it’s willing to allow workers to save in multiple types of tax-favored accounts at once. Combining the powers of a 401(k) and an IRA can really supersize an individual’s tax savings and future financial freedom.

The ability to contribute to a Roth or traditional IRA is not just beneficial for workers stuck with a subpar 401(k). IRAs offer a lot more flexibility and control for all investors in terms of investment choices (limited only by what the broker offers), access to portfolio building and investment management tools, and control over account fees.

More 401(k) resources
  • This 401(k) calculator can help you figure out how much you should be saving
  • Our 401(k) fee analyzer can show you how the investment fees in your plan stack up to others
  • The NerdWallet IRA vs. 401(k) guide can help you maximize your retirement savings dollars in both types of accounts at once

Dayana Yochim is a staff writer at NerdWallet, a personal finance website: Email: Twitter: @DayanaYochim.

Will Your Score Soar with Credit Report Changes?

Hundreds of thousands of consumers are about to catch a break on credit scores, possibly adding enough points to qualify for credit cards or loans that had been just out of reach.

That’s because what goes on credit reports is changing — and your credit scores are assembled from what’s on your credit reports.

Here’s what’s changing and how it might affect you.

What’s changing?

Credit bureaus are getting pickier about including two types of public records on credit reports:

  • Tax liens, which relate to unpaid state or federal taxes
  • Civil judgments, which can result from a lawsuit saying you owe money

Until now, the documentation required to put these score-damaging marks on credit reports has been minimal. But starting July 1, the bureaus will handle them differently.

More identifying information: New judgments and liens won’t go on credit reports unless they have a Social Security number or birthdate to go with the consumer’s name and address.

Frequent updates: The bureaus will check for updates or new records at least once every 90 days.

Scrubbing old data: The bureaus will begin to remove previous entries that don’t meet the new standards.

The changes could affect about half of tax liens and almost all civil judgments now on reports, according to the Consumer Data Industry Association, a trade group representing the three major U.S. credit bureaus.

Will it affect you?

Up to 14 million people — 6% to 7% of consumers with FICO scores — will be affected, but most won’t see big jumps.

That’s because public records of lawsuits and tax liens are rarely the only negative marks on an otherwise pristine credit report, says Ethan Dornhelm, vice president for scores and analytics at FICO. They tend to keep company with things like missed payments, accounts in collections and other score-lowering items that will remain on reports.

Dornhelm estimated 92% of people affected by the July changes will have other negatives holding their scores steady.

As for the other 8%? FICO and its competitor, VantageScore, did independent tests on the effect of removing the data and found an average bump of just 10 points.

How can you check your information?

Starting July 1, credit reporting agencies will begin removing previously collected public record data that does not meet the new standards, Consumer Data Industry Association spokesman Bill Mashek said.

With that in mind, August would be a good time to pull your credit reports. You get at least one free copy from each credit bureau every 12 months via If it’s been less than a year since you last requested them, try a source of free credit report information, such as NerdWallet.

Look for a label that says something like “public records” or “derogatory information.” If you find something listed that you think violates the new standards, use the credit bureaus’ dispute process to ask that it be removed. Contact information is on each bureau’s website.

What can you do with a bump in score?

A gift of credit score points can only help, especially if you’ve been on the border of the next score range. Even a small boost could widen your access to credit or improve the interest rates you get.

Have damaged credit? Use those “free” points to kickstart restoring your credit. Build on your momentum with these rock-solid steps:

  • Pay bills on time, every time. Timely payments are the biggest factor in scores. If you’ve had some slip-ups, rest assured that the further a delinquent payment recedes into the past, the less it will hurt your score.
  • Pay balances down. Balances above 30% of your limit can hurt your score. That’s why paying down debt not only eases your financial stress but also helps your score.
  • Keep old credit accounts open unless you have a good reason to close them, such as an annual fee. Closing an account can hurt your score.

Bev O’Shea is a staff writer at NerdWallet, a personal finance website. Email: Twitter: @BeverlyOShea.

Nuclear plant uses bikini contest to hire interns

A nuclear power station in Czech Republic got a toxic reaction from the public after it decided to use a swimsuit contest to hire interns. 

>> Read more trending news 

CEZ's Temelin power station posted to their Facebook page photos of high school graduates posing in bikinis and hard hats last week, USA Today reported.

The post, which has since been deleted, said the woman with the greatest number of likes would be titled “Miss Energy 2017” and get a two-week internship. 

But many Facebook users scrutinized the station, commenting on how the post was “unprofessional” and “distasteful,” CNN reported. 

The plant apologized two days later on Facebook and said all 10 of the contestants would receive internships, Fox News reported.

"The purpose of the competition was to promote technical education," the post read. "But if the original vision raised doubts or concerns, we are very sorry."

What to Do If You Can’t Get a Student Credit Card

Student credit cards can be a good value, if you can get one. Due to the Credit Card Act of 2009, it can be hard for people younger than 21 to get a student credit card without a parent co-signer, and many issuers of student credit cards don’t allow co-signers. But there are alternatives for students starting out with credit: secured credit cards and authorized usership.

Small deposit may have big payoff

While not marketed to students, secured credit cards can be a great option for students with low or no credit scores. A secured card is a credit card backed by a cash deposit, while an unsecured credit card — the kind you most often see in ads — doesn’t require a deposit. Generally, the deposit will be equal to or less than the card’s credit limit. Most secured cards have credit limits from $200 to $500.

Secured cards aren’t as flashy as unsecured cards. Most don’t have rewards or sign-up bonuses, and many have annual fees. But they operate just like an unsecured credit card. Card activity is reported to the credit bureaus, and if you make all payments on time and keep the balance low in relation to the credit limit, your credit score should improve steadily.

It could be daunting to put up several hundred dollars as a secured card deposit, but that money isn’t gone forever. Once you’ve built your credit enough that you’re ready to graduate to an unsecured card with the same issuer, or close the account and look elsewhere for an unsecured card, you’ll get your deposit back. That assumes you’re in good standing; if you make all payments on time, you’ll be fine.

Buddy up for good credit

Another option: Become an authorized user on someone else’s card. Here’s how it works: The primary cardholder adds you to his or her card as an authorized user. You’ll get a card with your name on it that you can use, but you aren’t required to make payments. You also can’t make any changes to the account, such as increasing the credit limit or adding other authorized users.

While you aren’t legally obligated to pay off the charges you make as an authorized user, talk with the primary cardholder to set boundaries on the ways you’ll use the card. In other words, know if you can spend only a certain amount each month or whether you’re expected to make payments to the primary cardholder, etc. Money can put a strain on your relationships, so set expectations first.

Also, make sure the issuer reports authorized users’ credit card activity to credit bureaus. Otherwise, your score won’t be affected.

Use credit cards wisely to build credit and avoid interest

It’s important to use credit cards well to build credit and avoid interest charges.

Build credit. Focus on two primary things when trying to improve or build your credit: paying every bill on time and avoiding or paying off credit card debt to keep your credit utilization in check. Other factors can affect credit scores, but these have the highest impact in moving your score in the right direction. Set up automatic payments to avoid missing due dates and make a plan to pay off your balances.

Avoid interest charges. Credit cards are useful tools, but only if you aren’t paying interest to use them. Credit cards tend to have double-digit interest rates, making them one of the most expensive kinds of debt. According to a new NerdWallet study, the average student accrues $569 in interest on credit card debt over four years of college by making only minimum payments. Limit spending to what you can afford to pay off each month so that you don’t get into credit card debt.

If you do get into debt, there are ways to minimize interest costs. Pay as much as you reasonably can above the minimum payment to pay the credit card off as quickly as possible. And make multiple payments each month; interest accrues on the average daily balance, so anything you can do to lower the balance will help.

Erin El Issa is a staff writer at NerdWallet, a personal finance website. Email: Twitter: @Erin_El_Issa.

This article was written by NerdWallet and was originally published by U.S. News & World Report.

NerdWallet’s Best Credit Card Tips for July 2017

The Fourth of July, fireworks and freedom (from school and work) are the highlights of July. And the Nerds have credit card tips to help you enjoy the month.

Discover freedom, and discover Freedom

Both Discover and Chase offer credit cards that earn 5% cash back in rotating bonus categories, on up to $1,500 spent per quarter, and 1% back on all other spending. July kicks off the third quarter of 2017, so it’s time to activate this quarter’s categories if you haven’t already. The July-August-September bonus category on the Chase Freedom® is “summer fun” — restaurants and movie theaters. Discover also wants you to eat out this quarter, as its cash-back cards have restaurants as their 5% bonus category.

Travel safely with your cards

Whether you’re sightseeing in Europe or spending a week at the beach with family and friends, vacation means you’re out of your normal routine. And that’s when criminals can take advantage of you. Here are four ways to protect yourself:

  • Take only the credit cards you need. Two cards should be enough, and consider carrying them separately from each other. If a thief strikes, it’s much easier to report one lost card than a wallet full of them. Some cards, such as those issued by Discover or Citi, have a feature that lets you lock your card if it’s misplaced or stolen, so no one can use it.
  • Use credit instead of a debit. If someone makes a fraudulent charge on your account, the zero-liability protection that most credit cards offer means you won’t owe anything. But if someone makes a charge with your debit card, the money comes out of your checking account right away, and it may take some time to restore it.
  • Check your credit card activity every day. This isn’t hard to do. Most of the major credit card issuers have apps that make it simple to log in and see what transactions are pending and posted. Many let you set an alert to notify you every time your card is used.
  • Know where your card is. When you’re in vacation mode, it’s easy to forget your card at a restaurant, an ice cream stand or the golf course. Whenever you use it, be sure it goes back in your wallet. If you don’t need your card that day, lock it in the safe in your hotel room with your other valuables.

While we’re on the subject, if you and your credit card will be away from home, consider giving your issuer a call to let it know. You don’t want your card declined because the issuer’s computers are flagging a far-from-home transaction as suspicious.

Ellen Cannon is a staff writer at NerdWallet, a personal finance website. Email: Twitter: @ellencannon.

Don't worry, Whataburger isn't closing all its stores in 2018

That sound you just heard was all of America letting out a collective sigh of relief.

Despite what you may have seen on social media, Whataburger is not closing all its stores next year.

>> Read more trending news

Joining the battle against fake news, the beloved Texas-based fast-food chain addressed the article Wednesday, reassuring Honey Butter Chicken Biscuit-lovers that their favorite late-night or early-morning or any-time-of-day-or-night food stop isn’t going anywhere.

The original article, which has been shared widely on Facebook, was posted to a hoax “news” site — once a user clicks on the story, they’re greeted by the Yao Ming Face meme with a caption saying “You Got Owned,” followed by text saying “You’ve Been Pranked!” and requesting that users “Create a story and prank your friends!” The bottom of the site clarifies its status as a “prank website that is intended for fun” and says, “We do NOT support FAKE NEWS!!! [sic]”

Don’t believe everything you see on the internet, folks.

The 20% Mortgage Down Payment Is Dead

For first-time home buyers, the challenge of coming up with a 20% mortgage down payment is often difficult enough to keep them out of the market. But the fact is, the 20% down payment is all but dead — and has been for quite some time, especially for first-time buyers.

Most buyers make down payments lower than 20%

“It’s been my experience that about half of my clients know that there are loans and/or programs that require less than 20% down,” says Kris Lindahl, a real estate agent in Blaine, Minnesota. “The other half still think that they must have at least 20% down in order to qualify for a home mortgage.”

But most people don’t put 20% down on a home, even though it’s the benchmark most often quoted by lenders and mortgage experts. More than 70% of non-cash, first-time home buyers — and 54% of all buyers — made down payments of less than 20% over at least the past five years, according to the National Association of Realtors.

Michael Facchini of Chicago was 23 years old when he bought a multi-family building in 2003 as his primary residence. He put only 5% down, even back then.

“I own it still today and it has proven to be a fantastic investment, even through the crash of 2008,” says Facchini, now a branch manager at Fairway Mortgage.

» MORE: Best zero and low down payment lenders

First-time home buyers miss out

The typical down payment for 60% of first-time home buyers is 6% or less, according to NAR’s latest data. But NAR’s research finds few adults 34 and younger (just 13%) realize they can buy a house with a down payment of 5% or less.

These low-down-payment programs aren’t new. The FHA has backed home loans with 5% down or less since the 1980s. Conventional loans, mortgages that aren’t directly backed by the government, have had them since the 1990s.

Why don’t home buyers know?

“Many financial advisors, including much of the popular media, speak of the ‘traditional conventional loan’ that assumes 20% down,” Lindahl says. “This type of loan is considered the gold standard and is most often used to quote mortgage rates. Another reason is simply that many banks and lending institutions only deal with 20% conventional loans, as they are considered ‘safer’ and less risky than other lower down-payment mortgages.”

Typical down payments

Consider the typical down payments for different types of loans for the 12 months ending May 2017, according to mortgage lender systems provider Ellie Mae. This information represents an 80% sample of all of the mortgage applications the company processes — about 30% of total loan volume in the U.S. — and is for for all purchase loans, not just to first-time buyers.

Conventional loans, the mortgages lenders prefer to make, can have down payments as low as 3% for qualified buyers. Some lenders offer grants to allow even lower money down. But for the past 12 months, most buyers seeking conventional financing put down 20%, according to Ellie Mae.

FHA loans, often the go-to solution for first-time buyers of modest means, require a minimum of 3.5% down, and sure enough, loan-to-values for the period averaged 96%, probably due to rounding.

VA loans are famous for offering mortgages that require no down payment at all. Still, LTVs averaged 98% over the past year, likely due to borrowers financing their closing costs.

20% is good — but not mandatory

The fact is, 20% down payments aren’t strictly required, but they may be a good idea. Good reasons to put down at least 20% include:

  • You won’t have to pay for mortgage insurance
  • Your monthly payment will be lower
  • You’ll likely earn a lower mortgage interest rate
  • Lenders will be more likely to compete for your business

One thing’s for sure: you don’t want to drain all of your savings account, regardless of how much you put down. You’ll want to have some money on hand for the variety of expenses, including closing costs, homeowners insurance and property taxes, that come up as you buy and move in.

And you should be prepared to spend even more on the water heater or other appliance that fails, a lawn mower for that new lawn, or furniture for that guest room you always wanted.

Know your down payment options

The “traditional” 20% down payment may become obsolete, even among big lenders. Brian Moynihan, CEO of Bank of America, told CNBC in May that lowering the down payment requirement from 20% to 10% “wouldn’t introduce that much risk but would help a lot of mortgages get done.”

There are strong arguments to be made for and against 20% down payments. It’s a decision that depends on your particular financial situation, how long you plan on being in a home, and the housing market in your area.

Fannie Mae and California State University-Fullerton research into what U.S. households know about qualifying for a mortgage came to this conclusion:

“Correcting consumer misconceptions may be a more efficient approach to expanding homeownership opportunities by encouraging households who may already be qualified to own homes.”

Hal Bundrick is a staff writer at NerdWallet, a personal finance website. Email: Twitter: @halmbundrick.

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