Good afternoon, I'm Bonnie Sewell and looking forward to answering your questions today. Bonnie A. Sewell, CFP®, CDFA™, AIF®
Principal, American Capital Planning, LLC
Fee-only since 1992
2012 President, BOD, Loudoun Therapeutic Riding, www.ltrf.org
Welcome to today's Jump-Start Your Financial Plan chat with NAPFA!
We have five NAPFA advisors joining us today: Brent Perry of Piedmont Financial Advisors in Indianapolis, IN; Bonnie Sewell of Principal, American Capital Planning, LLC in Leesburg, VA; Randy Kratz of Willoughby Hill Wealth Management, LLC in Tomball, TX; and David John Marotta and Matthew Illian of Marotta Wealth Management in Charlottesville, VA.
Thank you all for being here.
Hello, This is Randy Kratz, CFP®, owner of Willoughby Hill Wealth Management serving the Houston TX and Bowling Green KY regions.
For those of you who are joining us for the first time, let me explain a little about how the live chat works: your questions will be submitted and held for moderation. We received many questions in advance, so your question may not necessarily be approved right away. However, we will do our best to answer your question as quickly and thoroughly as possible!
While we wait for a couple more advisors to log in, let's go ahead and get started with some questions.
Good afternoon, I'm Matthew Illian and looking forward to answering your questions today.
Matthew Illian, CFP®, AIF®
Marotta Wealth Management
(877) 244-1001 toll-free office
Here's one from T-Town about Roth IRA conversions.
And another one from RJ about saving for college.
RJ - The sooner the better. There are three main ways, taxable account, custodial account and 529 plan. Most people are leaning toward the 529 plan.
RJ, this is Bonnie Sewell - I would say as soon as possible with this caveat: we've gone off the rails a bit on spending too much for college so as early as feels right for your family, start to discuss college, what it means, what it costs and ask your child to spend time with someone in the field they think they'd like to work in. Please be careful about going into debt for your child's education. You may have seen the story last week on seniors having their social security checks docked to pay these loans back . . . good luck!
T-Town: lots of great web calculators for conversion and as with any personal finance math, the assumptions are critical.
RJ - I agree with Bonnie regarding the debt. Many people have a fear that if they save money for college, it will hurt their chances of financial aid. What they don't realize is most financial aid is in the form of loans.
Hello! Brent Perry, CFP here from Piedmont Financial Advisors in Indianapolis. Looking forward to answering your questions.
Thanks K...I may need to sign off early
I think we can give you a pass on that one, Matt ;)
Alright, here's our next question from Al McCain
Al, do you need the RMD or is it disposal income for you?
And here's another question from Choupel.
Choupel - One of the safest would be 5 yr CD. You can look at short-term bond mutual funds that may yield a little higher, but will fluctuate in value. I would stay away from the stock market.
Al submitted his question early, so while we wait to hear back from him, here's another question from Whsyrdaddi.
Thanks for the heads up, Mike. The link should be fixed now.
Choupel, not one of the safest but may earn you more - a good bond fund or Vanguards TIPS fund. You do have risk but their liquid and paying better than the safest alternatives - depends on what you can stomach for 5 years.
@Choupel: Traditional financial planning suggests that if your time horizon is less than five years you will need the money you should keep it invested in something stable such as money market or CDs.
This is based on the idea that you *need* the money and financial planners want to be safe and we want you to be able to eat. We recommend having 5-7 years of required lifestyle spending in safe (bond) investments during retirement.
But if your time horizon is flexible and you are willing to wait more than five years to buy your house if the markets go down, then you could risk putting the money into equities and hoping for the best. My wife and I have taken this second approach and usually gotten the required savings faster as a result.
There's the question from Whsyrdaddi, sorry for the delay.
Mike - You are correct. That's the importance of having money (taxable) you can get to if your retire early.