Great, thanks Debbie. Here's a question for you from MAS.
also the websites that Kiplinger just added to this discussion.
Thanks David, that's really useful. I should add that if any of the advisors have tips or advice on any of the questions, even if I didn't direct them to you, please chime in! The more the merrier.
David, here's a question for you from Dave Kay.
Larry, you may draw on your ex-spouse's record if you were married 10 years and, big one, IF she is already retired and collecting her benefit. And you are correct that your benefit will be reduced by $1 for every $2 earned in excess of $14160 per year. I suggest that if you are working, you may also have to pay tax on some of the social security you do receive depending on your income. This is a complicated topic. I suggest that at the very least, you set up an appointment with the social security administration to discuss your options. That said, sometimes you don't always get the best advice there so an hour with a financial advisor who is savvy about this might be in order.
Great, thanks Rich. Rachel is posting some useful Social Security links from Kiplinger.com, PJHall, so you might want to take a look at those. Rich, here's another Social Security question, this one from Bill.
Insurance for your college age son is something you should obtain. First look at the university. Some provide group student plans that are major medical type of coverage. Look at traditional insurers such as BCBS in his area. If you or he belongs to a group, professional or otherwise, look at any group plans they might have. At his age, it should no be expensive.
Bobbie, here's a question for you from wreckon95.
Debbie, here's a question about 401(k)s from Elizabeth.
Elizabeth, it depends on many factors, your income will determine if you are qualified for a ROTH contribution. It also depends on your age, if you are young, a ROTH makes so much financial sense. Do you need the tax deduction? You do not get one contributing to the ROTH. Finally, does your employer plan have good custodians. Many do not, they rely on insurance programs or high fee mutual funds. If that is the case, open a ROTH, you will have as many choices as there are investments.
No worries, Rich, this sounds tricky. Do any of the other advisors have any ideas for Bill? I'll copy/paste his question below again.
From Bill: My wife and I are planning to delay starting our Social Security benefits until age 70, and take advantage of the 8% delayed retirement credits for waiting after our full retirement age. Assuming she outlives me, I understand that maximizes her survivor benefits. But if I die after FRA but before starting to receive benefits, are the survivor benefits frozen at that point, or can she still wait until 70 and let the survivor benefits increase? If it matters, we are same age, and my wife's PIA is about 2/3 of mine.
Wreckon95, 4.75% is a good rate and lower than the new Stafford loan rates as of 7-1-12. The good news is that your current rate will not increase but I doubt if there are any alternatives for lowering your rate. I'm not sure if your loan is private or public. Some student loans (not private ones)
can sometimes be consolidated for a lower rate (but not likely lower than your current rate)
Hi this is Bill Cuthbertson in Southern California. I'm looking forward to helping out!
Welcome, Bill, I'm glad you made it! Now the gang's all here -- apologies for the early glitches, folks. Bill, your first question is from Taylor.
Rich, I have a question for you from Elizabeth.
Generally when you convert from tax-deferred plan to a ROTH you'll need to pay the taxes on the converted amount. So, you need to have money available to pay those taxes in addition to the converted amount. The main reason you would do the ROTH vs. the Traditional IRA is because you believe the taxes you would pay now on the converted dollars are lower than what you would pay in the future.
David, I have a rather involved question for you from Deborah.
Debbie, here's one from InHonduras.
Elizabeth, If you need full time planning on all decisions, you can look at NAPFA. This is an organization for fee only planners. We get fees from only one place, our clients. However, if you are looking for just someone to manage your money, you could look into a stock broker but ask them about their fees first. It all depends on the type and amount of planning you need.
Bill, there is something called file and suspend. One of you could start drawing now and the other can file and suspend their own benefit and still draw 50% of the spouse's benefit. In your case, you have the higher benefit. You might want your wife to start taking her benefit and you can file and suspend and still collect 50% of her benefit. This leaves your benefit to grow by 8% per year until your age 70. When you die, your wife can switch to your benefit which will be much higher than hers. Now, I want you to check this out either with the social security administration or an advisor who is familiar with file and suspend. This technique is often overlooked and can mean many more dollars to your family if used properly.
David and Bobbie, thanks for chiming in on Bill's question. Bobbie, I have a question for you from Alex.
And by "Bill" I mean the commenter, of course, not the Bill Cuthbertson! Planner Bill, I have a question for you from Dan.
And Rich, here's a question for you from June.