Here is Pat Jennerjohn in sunny Oakland, California - checking in as well - hi Delia!
Hi Pat and Delia! Happy to have you back today. Let's give everyone another minute or two to get logged in.
Happy Thursday and welcome to November's edition of Jump-Start Your Financial Plan with NAPFA. We have NAPFA expert financial advisers Patricia Jennerjohn, Adam Leone, Katherine Holden, Delia Fernandez here answering your questions. Thank you all for being here today!
Hi Judi! Do you have a question for our expert panel?
Let's actually start with a question from a previous chat that we were unable to answer due to time:
Hi wreckon! Let us know if you have any money questions the experts can answer.
Reader: I am 46, great health, single, no children, no car payment and a $33k mortgage at 2.6%. I make about $65k per year and I max out in my work's 401-k since they match 100% up to 4% of my salary. Are there any financial vehicles by which I could use to reduce my federal income tax? I live in Texas, state income liability is not an issue.
Great question, Judi -- we've got it on deck!
Reader should check with his employer to see if they offer a Flexible Spending Account for medical costs or a Health Savings Account option for his health insurance. Both offer pre-tax contributions that will help reduce his taxes.
Reader - some employers also offer commuter subsidies - not exactly a tax benefit, but these subsidies let you pay for commute costs with pre-tax dollars.
Wreckon and Kyle, you guys are on deck!
Hi Judi, you have access to several options - you can set up a Solo 401(k), or a SEP IRA.
Welcome Craig, we have your question in the queue.
Judi, Also keep in mind that "saving for retirement" involves savings beyond tax-deferred accounts. Just because a tax deduction is not available does not mean that you can't save. Good luck.
Judi, You cannot contrbute the max amount to both IRAs. You can only split the max amount between types of IRAs.
We have Kyle, Craig, Checkman and Tannon on deck! Thanks for joining, guys!
Wreckon95 -- I really like the Utah plan because it uses low-cost Vanguard funds. And going for growth for an 8-yr-old makes a lot of sense.
Wreckon, Just keep the allocation in mind over the next few years as you may want to dial back the risk as your daughter get older.
Wreckon -- Adam's right. That's why some parents choose the age-banded investment options because the plan does that for you.
Kyle, is that the correct amount for your savings?
Kyle, here's an interesting blog with some tips for you:
Kyle: Until you get a job, being really conservative with your spending is important. It may even be necessary to cut back where you can. Once you get a job continue to grow your emergency savings to at least 3 months of fixed expenses. Once employed participate in the company retirement plan contributing at least enough to meet the company match. And continue to pay off the student loans.