Financial Planning

1. Questioner: Sarrah

   Question: I was required to take an initial RMD for 2008, and at the time rolled over an employers' 401k plan at Fidelity into a small personalTrad.IRA opened there a few years ago. The "in kind" rollover included company stock that represents about half the total account. The rollover cost me future capital gains benefit if the stock is sold. My question has 2 parts: Can you suggest types of IRA-appropriate investments that would add some value? Do you have any recommendations about the stock - other than leaving it alone? Thank you for your time. View Answer

2. Questioner: Chris

   Question: Hi. Just over a year ago, I opened an IRA with an aggressive risk tolerance and a “sales load of 5.49%.” (I don't know what that means.) I invested only $1,500 and, of course, the value of the portfolio has dropped. I'm not worried because I do not plan to touch it for many, many years; I am 33. But is it wise to invest another $500 right now? Thanks for your expertise. View Answer

3. Questioner: Melissa

   Question: I have a 401k that I have borrowed against. If I have $25000 in the account with a $12000 loan on top of that for a total of $37000. How does this relate to net worth? Is my asset $25000 and debt of $12000 or is it an asset of $37000? View Answer

4. Questioner: Demetra

   Question: Why is it a potential problem if long-term savings are too low? View Answer

5. Questioner: Antoine

   Question: Hello Mr.reyes im married with 2 kids and living in shreveport louisiana and i work and wife 2. With this current recession whats the best thing to do if i have some cash two invest we saved 14000 and need to know what to do thank you. View Answer

6. Questioner: Jane

   Question: I contribute the maximum yearly to a 401K from my employer. Recently I have been earning a considerable amount of 1099 income from other sources which I report on a Schedule C. What other retirement accounts are available for me to contribute before tax dollars to, and what are the limits that can be contributed? SEP-IRA? I would not qualify for Roth plans. Thanks View Answer

7. Questioner: Alexei

   Question: Here is a "big" question for which probably there is no definite answer. But any guidelines from you will be highly appreciated. I just got my "green card" after 4 years of work in the US with temporary work permits. Now that I know for sure that I will stay in this country, I started to think about retirement options. I have very little knowledge in this area and look for advice. Here is my general situation: I am 42, single, employed by non-for-profit religious organization, have relatively low (2,900$ after taxes a month) fixed income plus about $ 8000 in savings, have NO debts. Given my age, type of income and current general market situation, what would be the best approach and scheme to creation of the reirement plan. View Answer

8. Questioner: Linn

   Question: Beginning at age 18, if you saved $3000 a year for five years, and earned a return of 10% each year, at age 65 how much money would you have? View Answer

9. Questioner: Joseph

   Question: I am a physician and just left one group and have about 400k in a 401k. my new group makes all new docs wait one year before enrolling into their 401k. i would like to keep my 401k where it currently is as it has done well but the new clinic's retirement adviser recommends rolling into a ira so that "he can manage it, for 2% fee." i am uncomfortable with that scenerio. my questions are a. should i leave the 401k where it is? and b. what are my options for saving for retirement in the interim year before i can enroll in the new clinics 401k??(my agi is > $159k?? thanks View Answer

10. Questioner: Leighton

    Question: Should one usually put in the maximum allowable into their 401k and traditional IRA per year BEFORE putting into a Roth IRA? Or does it make sense to start a Roth IRA even though you could have put still more money into a traditional IRA or 401k? View Answer

11. Questioner: Bill

    Question: Richard, MY wife and I are both 79 and retired. We have no debt.We have a brokerage account with a "Financial Advisor" connected with a bank. The present value of the account is $155,00. all in stock. My wife and I both have our IRA accounts in bank CDs, but not with the bank that the broker is affiliated with. The combined total of our IRA CDs is $200,00. Because of the present low interest rate on our CDs we talked with him about alternate investments. He has suggested that we move one-half of our CDs into higher yielding CDs with another bank and put the remaining one-half into a "Management Account" with over 75% in "Diversified US Fixed Income, and so on down the line. He said that there would be an annual fee of 1.75% which seems high to me. He did not suggest a mutual fund, but wouldn't this be better than 1.75% annually in the Management Account? We are very conservative money-wise. Any advise would be appreciated. View Answer

12. Questioner: bud

    Question: I own a house (actually the bank does) in western Canada but I am sure this question would apply to anywhere. Our house has gone up in value considerably since we bought it ten ywars ago, tripling in value. However, all property values have increased in my area. We have not benn able to, unfortuneately, make much of a dent in the principal.We have even had to refinance a couple times. My wife and I are in our fifties, and our children, who are late teens, still live at home.
    Eventually they will move out. Would we be better off financially, heading into retirement, and considering the fact we still carry a lot of debt both with the mortgage and line of credit, credit cards, etc., to sell this home and move into a more modest home and use whatever profit? from the sale to pay down debt? Or, as a friend in the financial industry has suggested, would the best option be to continue living here even after the kids are gone, and continue to pay down the mortgage and debt into retirement, with the idea being that eventually we will get ahead and be low or no debt and own the house or at least most of it. To put the question more simply, do we stay in a big house with lots of debt into retirement with the hopes of eventually paying it off, or do we move into a smaller more appropriate place and use the profit to pay down debt, therby freeing up room to travel,etc. View Answer

13. Questioner: stan

    Question: i met with a financial advisor who is affiliated with the credit union at my previous employer for a "free" consult. he is recommending that i take the 403b from my previous job - and roll it over into an IRA at LPL financial which he would manage for a fee. another option besides leaving it in the 403b would be to roll it over into an IRA and either manage it myself with advice from fidelity- i have another 403b there with my new job and they have a contract which gives us free consultations- or i could pay fidelity a fee-the same as the financial advisor -about 1%-to manage the account. is there an advantage to either option? View Answer

14. Questioner: bud

    Question: Sorry I marked this personal but this website is used a lot by my friends and co workers and I could be identified. Not so much a financial question as putting out some 'feelers'. I am 50. I recently started a job operating heavy equipment for the municipal government, it is unionised with good benefits and a good pension, and the option to take early retirement at 55. My previous jobs were either self employed or working for private companies and had no pension benefits but offered a good income and allowed me to sock away some in RRSP's.I live in Canada and was involved in the contruction industry on a mostly seasonal basis. Quite a few of the people at my present job are retireing at their mid 50's on full pension, because they worked there long enough bade on a formula. Many of them have back and other physical issues from operating heavy equipment so they need the rest. I dont know if I want to work until I am 60. My health is OK but I do have high blood pressure and the usual getting older musculo-skeletal issues. My wife is 55 and in great health but plans on retiring in five years when she is 60. I was thinking I would retire in five years as well at age 55 on partial pension, and work somewhere else part time or casual just to stay busy and supplement my income. We have about 100 grand in RRSPs currently.Not much I know but combined with old age pension and both our retirement pensions it should be enough to get by. We own a house but havent made much of a dent in the mortgage. In five years the house will be too big as the youngest child will have moved out by then. Should we sell it, or maybe rent it out? Condos are almost as expensive as this house, so I was thinking moving to an apartment or a smaller bungalow. Anyway your thoughts on the above would be appreciated! View Answer

15. Questioner: Steve

    Question: Me & my wife retired almost a year ago from the same state (Texas)agency and have a set gross income of $6,135.00 (together) a month coming in for life. We both have a 300K Term life insurance policy in place for the next 30 years. All our medical is through or state agency and it has a very small co-pay. We have right at 167K in CD paying 4% and around 32K in checking & savings. We oue 96K on our house with is still valued at 292K and the interest on the the house is 5 3/8%(Texas)which will be paid for in 8 years. Everything else is paid for and we have no other debt. My question is is this enough or should we find another job and save more money. Since we both have been retired we pay or bills each month and still have between $1800 & $2300 left over each month and that we leave in our bank account. So is this enough or not. View Answer

16. Questioner: James
    
    Question: I am moving to new york and marrying my fiance. I am 32 and she is 30. She makes decent money and is already able to fully support herself and put money away in savings. I am not sure what my income will be over there yet, but almost all of it will be able to go into savings. What advice can you give me where to save the money? How much money would we need together to retire on? We just used the savings we had to pay off credit card debt from an old relationship (long story) so we are kind of starting over. We might have 5k or so left by the time we get married. We are renting in new york. Probably will continue renting and wont have a paid for home when retiring. Looking for some good advice. Thank you. View Answer
    
    
17. Questioner: pan
    
    Question: i am a 35 yr old male. i am also conservative and hate losing money. i am not a gambler. to summarize, i have about 100k in my bank savings. i am not knowledgeable of investing nor enjoy the process learning about it. i have put in hrs upon hrs reading about it online despite how big of a headache it is with all the whirlpool of info. with how things are, i do not want to deal with bank cds b/c of the low rates. i also do not want to deal with mutual funds b/c my experience has been horrible. so, i have read into annuities, which is the first i have heard about. i love the fixed/indexed annuities but the rates now are low so i wont bother, so i came across this variable REGULAR (NOT IRA) annuity with ameriprise (i can try it out for the shortest term which is 4 yrs). from reading, variable annuities are dangerous b/c you can lose even your principal. but this variable annuity offered to me is a variable annuity that protects my principal. so worse case scenario is that after 4 yrs, i gain nothing nor lose nothing. i am thinkin about putting in 75k in here. id like to know what your expert input is on ameriprise and your input on this "protected" type of variable annuity? he suggested that even though i am conservative, that i be a moderate aggressive which will on paper yield 6-8% (in which the fees/commission of about 3%) has already been deducted. also, it is tax deferred and will ONLY be taxed on my earnings and i DO NOT have to lock it up for 30 yrs like an IRA. if my annuity term of 4 yrs is done and i wanna leave, I CAN w/out penalty. your thoughts? i am just so mentally drained trying to find the right vehicle to grow my money and just hoping that this is it and i can now relax and not worry. View Answer
    
    
18. Questioner: pan
    
    Question: There are no ratings on these so called financial advisors anywhere, not even online! So how does a regular person like myself know who is legit, the best, and who isnt? I have contacted a couple so called independent financial firms/advisors (they sound like middle men) that I came across from an online search and I only spoke to one and he sounded very sincere and helpful, and even said to contact him whenever if I had other questions and I did so by email but its been two weeks and I havent heard back from him. So it sounds like he dropped the ball on me. The other advisor just never got back to me. Do these advisors care about your work income? I mean, you have to be "rich" in order to have an adivsor? So how do I find a quality advisor that cares about my financial well being as priority 1? Do I cont to find the so called independent advisors and NVR deal with the large firms (b/c as you mentioned, they go on comissions)? I want to find someone local so I can see their face and have an actual live interaction. Any tips on how to find one?
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19. Questioner: Sallie
    
    Question: I was reading the information below as an option for retirees that may help in being more financailly free, but I didn't understand what they meant. If you could help me understand what was meant I would greatly appreciate it.
    
    Thanks in advance.
    
    Some friends sold a house and decided to rent a two-bedroom apartment. A fee-only investment adviser manage the proceeds of their house sale. THIS IS THE PART I DON'T UNDERSTAND They take their allotted 4 percent of total asssets per yer (plus an annual inflation adjustment) for spendng money. View Answer
    
    
20. Questioner: David
    
    Question: My wife (56) and I (61) have a voluntary CalStrs 403B, administered by TIAA-CREF. I don't think we're getting the best return on our money with them. The only advantage they offer is the possibility of taking out a loan on the money. Do you know of a better vehicle for our money than TIAA CREF? We're willing to pay somewhat higher administrative fees as long as they have a better track record. View Answer
    
    
21. Questioner: wo
    
    Question: I am leery about having these quote and quote financial advisors deal with my money b/c for the avg joe like myself, it is hard to tell if they are just there to sell products/manipulation/taken advantage of or they are there for the best interest of the investor. with that said, in order to see growth with my money and go beyond bank cds, i need to somehow rely on this "advisor".
    
    but how do i go about finding that quality financial firm/advisor? i have googled but nothing pops up in terms of a site that RATES who are great and who are bad which makes it difficult for the avg joe to pick one. i see names of these local financial firms that ive nvr heard of and the skeptic that i am, of course i will steer away from them. i have a so-so paying job only 25-30k per year. i am 32 and i have 150k. again, i love bank cds and i am very conservative but the way things are now, it is ridiculously low and it wont even cover inflation. i have looked at annuities and life insurance but no way on those two, too iffy. i have stock mutual funds that i am done with b/c it hasnt done anything to the 2 funds i have there for the past 12 yrs. so i have narrowed it down for retirement money to go with the bond laddered method, not bond funds but independent company bonds. it is mentally draining and confusing to do the research on my own so i need help there. someone from chicago already quoted me that my fee is approx 750/yr. but again, how do i know what fee is fair, high or low/great deal? i am in seattle so how do i go about finding who the top notch financial managing firms are that i can work with locally? View Answer
    
    
22. Questioner: Karen
    
    Question: My ex passed away without a will after working 27 years DOD. We were married 15 years and had two children that are now adults. He was remarried 5 years before his death. There was no stipulation in our divorce agreement concerning his retirement benefits. Who all has a right to his retirement/TSP? This occurred in Florida. View Answer

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