Deborah, I've got a question from Kiki for you...
Lea Ann, can you take Ja's question?
Brandon - if your employer has a Roth 401k option, that is something important to consider. Having your retirement money in both a traditional and Roth provides you with greater flexibility later in life.
You have hit on the 64000 dollar question? In this environment the strategy you are seeking is very challenging. Do not be swayed to buy a fixed annuity. I will go in order of risk; low to higher.
Hi again. I think one of the best programs for analyzing the overlap in your portfolio is Morningstar's X Ray reports. Not sure if you can get this off the regular Morningstar website, but you can definitely get it with Morningstar Premium (I think it's about $130 per year). It will help you keep track of the performance of your investments, too.
Another question for the group. This one's from MorganR...
Hi Amanda - I'm just reading your question
Hi MorganR - check out NAPFA's Pursuit of a Financial Advisor Field Guide. You can download it for free and it will give you all the questions to ask! Find it at www.napfa.org
Cpep27, yes, I would set a limit on funding the Section 529. Is $150,000 that number? I think I would fund it annually while keeping an eye on education inflation. I would error on the conservative side so as not to go over board.
Sorry Kiki, pushed the wrong button. First order of low risk is bank products; CDs, savings accounts. Credit unions usually have slightly better rates. Short term bonds or bond funds are the next step as they will be less vulnerable to interest rate increases (which threaten bond fund's values). The highest risk I would go for you would be dividend paying stocks, utility stocks, some consumer stocks. For mutual funds, check out Vanguard.com. The low expense ratio give the bond funds a better yield. Good luck and do not worry about keeping low risk, it is ther right thing to do.
Deborah, Kiki had a second question...
Lea Ann, can you take javelin101's question?
Kiki, It really depends. If you set aside all of the money you believe you will need for the balance of your life, any extra funds could be invested for your heirs. But make sure ALL of the capital you can possibly need is in low risk investments. Very sweet of you to think of your family, but you have worked hard, take care of yourself first.
Erin, you could take a look at Mint.com as a possible budgeting tool.
Here is a question from JeanO...
HI Javelin101. I'm sorry to hear of your loss. At 37 if you only have $25,000 saved for retirement, you are right to consider putting away the bulk of this inheritance for retirement. I would recommend finding a fee-only financial planner who can help you determine how much needs to be segregated for the long term and how aggressively you will need to invest it. Such a planner can also usually give you advice regarding specific investments for that money.
Amanda - You mentioned that you want to buy the Kiplinger recommended funds and then you mention buying shares in the same companies. I just want to clarify that you that the shares you referred to are the recommended funds. Check with the individual fund families to see if you can set up an account where you automatically purchase funds each month. With automatic purchases, some fund family allow purchases of a few $100/month. You should also be able to avoid transaction fees that your brokerage acct may charge.
Regarding which fund - a dividend fund will produce income, which will mean taxes. It is best to put your income producers into your retirement accounts and growth funds in taxable accounts. Look up asset location for more info.
Another question for the group from Brad...
Javelin 101, you are asking a great question. NAPFA advisors can do a retirement illustration for you, but the short answer is, it would be great for you to take a portion of the inheritance and put it in a retirement account. Frankly, $25,000 won't go very far in retirement.
JeanO, the depreciation is subracted from your original cost of the rental. For example, if your cost is 310,000 and you have rented it for 10 years with a total depreciation cost of $80,000 (land does not get depreciated), your current cost basis is $230,000. There is a wrinkle of course, if you are in a high income tax bracket, you might have not been able to take all of the depreciation on the property. That will carry over. Your accountant will have the current tax basis for you.
Here's another rental house/depreciation question...
Brad, check out NAPFA.org for one. You should also look at the CFP (Certified Financial Planner) website. Starting a discussion with a local NAPFA member would also be of value.
Hi Brad. Glad to hear you are interested in financial planning! Many colleges around the country now offer specific courses that, when completed, will allow you to sit for the CFP exam. If you can't find a set of courses near you, I also highly recommend the College for Financial Planning - they offer several certification courses and you can do them online or as self-study. They aren't easy and often each course takes up to six months to complete, but they prepare you well for the exam.
Hi Brad - This is a great field and we need more young people to help. Take a look at the CFP website to see the credentials required to get this designation. It is the 'gold standard'. Also take a look at the NAPFA website and the Garrett Planning Network site. Both of these organizations are fee-only planners, who have the clients interest first and foremost.
Brad congratulations, financial planning is the best career one could have. For 99% of financial planning firms, you will need to be certified as a financial planner (CFP) That typically takes 2 years to complete with 3 years of experience. I agree with George, talke to local NAPFA members, most will be willing to meet with you to give advice. Good luck.
With March Madness around the corner, here's a timely question from Marshall!
MMMM, those three ideas you proposed are mainly lifestyle questions. If you wait and leave it to your children in your estate, what are the costs of holding it until then. If you move into it to get residential status agian, it is a move (more money) sale of current residence with sales commission. Sometimes it is the least costly idea to just sell it and pay the piper.
Marshall - Yep - The IRS wants their piece of your good choices.
Here's a question for the group from juggling man...about an issue a lot of people are facing.
Marshall, does that mean you have picked NC State to win? If you are gambling and win over 1200, most places will give you a W2G. If this is a friendly neighborhood pool with a couple hundred dollars. Let your concience be your guide.
Marshall, I think perhaps I should ask you for some tips on my bracket!
But back to the topic at hand...
Here's a question from Mariette for the group...