Happy Thursday, and welcome to September's edition of Jump-Start Your Financial Plan with NAPFA. We have a great panel of expert financial advisers on hand today, including: Robert Dowling, Kathy Hankard, Tim Parker and Eleanore Szymanski. We'll be getting underway in 15 minutes, so get those questions ready!
And, here we go! A big thank you to our experts today. Is everyone on board?
Great to see you guys. We have our first question!
Welcome, Roy! Your question is on deck.
The rates really aren't that good if you are buying them today. If you own some old ones, they might be earning at 4% and those are fine to keep.
In my opinion, US savings bonds can certainly have a role in retirement savings. Interest may seem "high" in today's environment, but over the long term, you're unlikely to get the returns you may need for your retirement income. If you don't need large returns from your portfolio (e.g. your portfolio is very large or you have a pension), then savings bonds may be OK.
Just be aware of their final maturity dates when they stop earning.
Hi Roy - It really depends on if you need the money now and your health. If you are in good health and expect to live a long time and don't need the income now, you could wait and let the benefit grow. Obviously you would be banking on no great changes to the social security system and benefit calculation.
Roy- depending on cash flow, health, and current needs, delaying to at least full retirement age might be advantageous.
If clients are able, I often encourage them to delay Social Security. In particular, I encourage the spouse with the higher benefit to delay, as the dollar increase for delaying will be larger (same percentage but on a larger dollar amount). Note that the higher benefit will persist for the survivor, so maximizing one of the benefits provides highest income for surviving spouse.
Welcome to Jay, Shay, Mary and Laura! We've got you guys in the queue.
By the way, 66 is the magic number in order to capitalize on certain spousal benefits.
Consider researching file and suspend and restricted application social security strategies.
Specifically, Full Retirement Age is the "magic number" - this is 67 for people born 1960 and later
Jay, I'm sorry for your loss. Will you have any earned income this year? If so, I encourage you to open a Roth IRA and fund it fully ($5500 or $6500 if you're 50 or older). This is assuming your adjusted gross income is
sorry - looks like my answer got clipped. Income for single filers needs to be
Hello Jay - If you'll need some of the money from the home sale to live on until you find work, you might not want to invest in the stock or bond markets until you get your income matching your expenses.
Hi Shay - The simple answer? Earn more money and spend less.
I'd address the unfiled taxes first. Can you negotiate at all with the student loans, perhaps some of the income-based repayment plans?
Shay- review your fixed and variable expenses. Determine if you can reduce your expenses. Most people know sources of income but oftentimes overlook expenses (ATM withdrawals).
Hi Mary - you might consider a short-term bond fund that won't lose as much in rising interest rate environments as the longer term funds you have.
Hi Mary, I agree with Tim. Specifically, I like Vanguard's Investment Grade Short Term Fund, which holds more corporate bonds than treasuries. Short-term bonds have less interest rate risk than intermediate or long term bonds.
Mary - Consider VTIP for inflation protection (shorter duration)