Jump-Start Your Financial Plan with NAPFA
NAPFA financial planners took your questions about retirement, taxes, insurance, saving for college and more.
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I'm 24 and have just bought a house with my fiancé. After paying all of my monthly bills, I still have over $500.00 leftover each month, and I have already built up an emergency fund to cover at least four months of expenses. What else can I do with my money besides having it languish in a savings account? -
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What's the best way for a 25 year old full time law student with about $110,000 of debt to begin saving? Said individual owns a few shares of a few stocks, but would like to invest more in the market. Should they buy diverse mutual funds? If so, what funds do you recommend? If not, what other ways should should they save/invest?
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Hey guys, I have a Vanguard Roth IRA account. I like their STAR fund. Would it be a good idea to put extra savings in that account instead of letting them sit in a Money Market account? That will serve 2 purposes: Take advantage of up to $5k in Roth each year and also be able to use that savings money if needed. I make sure that I still have about $4-5k sitting in my Money Market for just-in-case situations.
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I'm 25 and recently started working. I have only been investing in my 401k for 6 months but if I plan to leave my company before I will vest, should I stop contributing to my 401k with company match and use this extra money to pay down student loan debt? I have completely paid off my credit card debt I had accumulated in college, the only thing remaining is $45,000 in student loans. But the payments eat up a third of my net monthly income. -
A few years ago, I received a line of credit (my first) with Bank of America. My limit was 5,000. I bought a laptop and put about $1,500 on it. Immediately, BoA lowered my credit limit to less than my total balance, ie, under $1,500, putting me in the red, with increased monthly payments and interest rates I couldn't handle. Practically out of anger, I stopped payments altogether.
Now the debt has been sold several times, but sits as a black seed on my credit. -
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is it ever going to be possible to get student loans - that I am a cosigner on - discharged in bankruptcy? I have no assets, only a meager retirement account, but I'm unable to assist with paying the student loans and my children are unable to as well, since most of them are either unemployed or underemployed....
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I'm a graduate student, currently receiving a small fellowship to cover my tuition and costs of living while I finish my degree. I make enough that I can keep up with my monthly expenses and will be able to pay off the ~$9000 in loans that I have by the time I finish my degree in two years--but I can't afford to contribute anything to a retirement fund or otherwise build up any savings. Should I be making smaller payments on my loans every month so I can start saving now for retirement? In other words, is it better to pay down my debt ASAP, or finishing paying off my loans later and build up some savings in the meantime?
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Part of my comment was removed by accident. Anyway, the debt was sold, but now BoA has been held accountable for all the shady things they've done to consumers. Do I have any recourse in getting this debt stricken from my credit, based on - potentially - illegal operations by BoA?
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My wife and I are having trouble saving money. I work a full time salary job and she works part time in retail. Our monthly bills amount to: two credit cards (one has a balance of $300 and the other $1400), a student loan, and regular monthly bills (utilities, rent, gas & food). Right now we feel like we are just "treading water" in regards to our finances. We've tried to come up with a monthly budget, but we still find that we don't have any money to save at the end of the month. Is there a certain percentage of our income that we should try to put towards savings? Any help would be GREATLY appreciated
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I have a question about saving for college. My first son is 4 months old and I am debating between a 529 plan and a Coverdell ESA...I like the flexibility of a Coverdell but am concerned by the limit. Should I just get both? Also, how much is a reasonable amount to contribute starting now? Lastly, just an fyi I live in Washington state and am not a fan of the Washington GET program. Thank you for your help.
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I am 26-years-old and a stay at home mom. I have approx $24,000 in a 401(3)b from my former workplace (which I left in Oct. 2011). I do not plan to return to that place of work or even re-enter the professional work environment for the foreseeable future. What should I do with those funds? Should I roll it into a Roth IRA (I do not currently have one) and take a penalty now?
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I am a HS teacher, which means I have a pension, and I have a 403B. I'm 60. I'm trying to calculate the amount I can use from my 403b and have it last for 25-30 years, but when I try to figure out retirement income, the calculators don't seem to allow me to take a pension into account - or I don't know how to use them. CAn you make a suggestion that will allow me to calculate my retirement needs?
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I'm 24 and i recently inherited a sum of money to the tune of $110k. I currently have it sitting in a savings account with a terrible interest rate. My car is paid off and i rent so i dont have any debt per say. I want to turn that money into a million dollars quickly (4-5 years or so). I am willing to take some risk, but i would also like to have some money to put toward a house. What would be my best approach to reach my goal?
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Coverdells do have an income limit as well as a contribution limit, whereaas 529 savings accounts have no limit on income and let you contribute up to a very high maximum, so they are pretty flexible. Also, you can choose a 529 plan in a state not your own (although we recommend using your state plan if you get a tax benefit), so the 529 is a popular option. -
SAHMQuestion, many 403(b) and 401(k) have additional administrative fees that can be avoided by transferring money to a discount fund/brokerage provider like Vanguard. Your decision about transferring to a Roth is dependent on your tax bracket now versus later. If your income is very low now, I would imagine that your in a low bracket. You can read more about this decision here:
$ ?s: Roth or Pre-Tax 401(k)?
www.marottaonmoney.com -
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Aquone, each plan has their benefits. 529 plan you can contribute more, is tax deferred, but will be taxed on the earnings when withdrawn if they do not use it for school. You may want to look at unified gift to minors, which the parent will be the custodian and it will benefit the child. If they do not use it for college its ok, and will not be taxed. However, you pay taxes each year on whats inside. -
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Hi Judi, Great question. The cool thing about being a planner is we know how to answer these questions, the bad thing about being a planner is we know out to do it our way. I'm sure Kiplinger and I know T Rowe Price has some reitrement calcuators -- but I haven't used them. In general, the pension is treated just like Social Security -- it's a strem of income each year -- and being a teacher, you will likely get some inflationary increases overtime. In these formats, I think the lame answer is to advise that you visit a planner, but before you pull the plug on working -- an visit to an advisor (Fee-Only of course) could pay dividends in avoiding mistakes (retiring too ealry or working too long). Any one know of good web based retirement calculators. Jamie -
Robot House, I assume that your question had a joke aspect to. You need to decide how much you need for a downpayment and when that purchase would happen. If, say you need $20,000 for a downpayment in less than 5 years, segregate that money into a short term bond fund or keep it in money market funds. Be very cautious about investing the rest. Since this money must feel like "found" cash, treat it as though it is hard earned money. Invest it wisely in good funds with some guidance from a fee only planner or self education. Do not expect it to turn into $1million.:) -
Jay, here's a recent Kiplinger slide show that breaks down 10 low-risk ways to earn more interest on your savings -- www.kiplinger.com
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Jay from Germany, here's a book review on my favorite investment book.
Book Review: The Investment Answer
www.marottaonmoney.com
This and anything by John Bogle, founder of Vanguard Funds. -
