KG, there are different ways that fee only planners could get compensated. They could charge an hourly fee or charge a % of assets under management. I would call around a few planners in your area to get an understanding of these fees. You can find contact information for fee only planners at NAPFA.org
KG, check out the Garrett planning network or napfa.org
Sarah, I'm working on you. Just a minute
JP, no you cannot wait on the RMDs, you must take them. but you don't have to from current employer
Sarah, it appears you and your husband may have a different view on risk. The plan is not too aggressive as long as you both can stomach the sometimes harsh downturns in the equity markets. If there is any chance you would bale out due to a market decline, then yes your plan is too aggressive. You have a long enough time horizon to weather market storms at this point. Your plan should be reviewed as you get closer to retirement.
Hi Lara, it is best to have atleast six months to a year in living expenses set aside in an emergency fund and to maximize your retirement contributions into your 403b
JP: It may be possible for you to roll your previous plans into one at your new employer and avoid taking RMD. Natalie Choate in Life & Death Planning for Retirement Benefits explains this. To work it has to be allowed by your new employer and if you have reached the time for RMD you will have to take the distribution before moving the accounts.
Lara, your will does not control your IRAs or 403b, the beneficiaries control where the money goes
Hi Simon. For every advisor on this chat room, you will get a different answer.Here's mine. Tax efficient funds in a 403(b) plan don't matter because taxes are deferred until you take them out and then everything is taxed as ordinary income. As for your fund selection, I like the first three but I'm not crazy about sector funds. I do think you should introduce a little fixed income into your overall allocation. Regarding International funds, I seldom suggest more than 20% even for my youngest clients. 15% might be good for you. I see a lot of advisors suggesting higher percentages but International funds have more risk than domestic funds because of currency exchange rates and, besides, the large domestic companies like those found in the Contra Fund have international operations that take advantage of the world economy. Let them worry about currency exchange rates.
Laurie, we're so happy to help!
Hi NEF, you get a tax deduction for the contributions that you make to your traditional 401k but not for the contributions to your ROTH 401k. However, distributions in retirement on your ROTH 401(k) are tax free while distributions from your traditional IRA are fully taxable. If you don't need the immediate tax deduction from the contributions to your ROTH 401(k), I would continue to diversify your contributions into both the traditional and the ROTH 401(k)
Nef, at age 32 I think putting enough into the 401(k) to get the match and then switching to the Roth is a good idea. Time is on your side. The cost of taxes will be overcome over time by return on your investments (assuming you are smart there).
Michelle, she may have to go on a cash basis and cut up that credit card.
Judy, it is also a good idea to delay collecting your benefits for as long as your can and you benefits will also enjoy an automatic 8% increase every year that you delay collecting your benefits past your full retirement age up to the age of 70
N Rodrequez, if we aren't talking about a lot of money, a target date fund might be a good and simple alternative. While many providers offer them, I would look at Vanguard first. That said, 40 is a great age to start a relationship with a financial planner. If you make any needed course changes now, your probability of success is MUCH great than if you wait until retirement to have that kind of engagement.
You are very welcome Bob. I'm glad you took advantage of this wonderful opportunity provided by Kiplinger and NAPFA. Tell your friends.
hi Joe, I would agree that you should increase your bond holding to closer to 40%. And it is a good idea to invest in low cost index funds from companies like Vanguard rather than investing in more expensive actively managed funds
Michelle, I would have your sister contact NFCC, the National Foundation for Credit Counseling. They are set up to help people with debt issues.
Michelle: You certainly are kind to want to help her. An option could be to cover the expenses she can't, that's all. You may want to limit how long you take this on, saying I will do this for xx months. Perhaps assisting her in preparing her skills for another job, a higher paying one would assist her in the future. That's what will help her grow out of this situation.
hi Lee, I would be careful about investing some of your bond allocation money into preferred stocks even if they are paying a nice amount of dividends. At the end of the day, preferred stocks are riskier investments than bonds and a truly diversified and risk adjusted portfolio should maintain a healthy allocation to stocks and bonds
Michelle, the phone number for NFCC is 1-800-388-2227
Lee, preferred stocks can be a good investment or you could use a preferred stock mutual fund. The risk of a single preferred stock is that the company could go bankrupt and you would lose both the interest and the principle. It could be a component of a well diversified portfolio.
Good Afternoon! My name is Phil Hogg. I am a CERTIFIED FINANCIAL PLANNER (TM) Professional with Hogg-Murnighan Financial Planning located in Chicago, IL and the world wide web at www.hmfinancialplanning.com I hope to answer a few of your questions today regarding personal finance and saving for retirement.
Howdy Phil! Happy to have you on board!
Hi, this is Pat Jennerjohn, CFP, with Focused Finances in Oakland California.
Pat and Phil, could you kick off by taking this question from John Idoux: I am over 70 and 1/2 and I still work full-time.I have two 403(b) accounts and a 457 account to which I contribute when employed full-time at my previous employer. Thus, I no longer contribute to those accounts, but since I am stll employed full-time, can I wait to begin RMDs on those accounts until I am no longer working full-time. Thanks.
KG, there are different ways that fee only planners could get compensated. They could charge an hourly fee or charge a % of assets under management. I would call around a few planners in your area to get an understanding of these fees. You can find contact information for fee only planners at NAPFA.org
Hi Simon. For every advisor on this chat room, you will get a different answer.Here's mine. Tax efficient funds in a 403(b) plan don't matter because taxes are deferred until you take them out and then everything is taxed as ordinary income. As for your fund selection, I like the first three but I'm not crazy about sector funds. I do think you should introduce a little fixed income into your overall allocation. Regarding International funds, I seldom suggest more than 20% even for my youngest clients. 15% might be good for you. I see a lot of advisors suggesting higher percentages but International funds have more risk than domestic funds because of currency exchange rates and, besides, the large domestic companies like those found in the Contra Fund have international operations that take advantage of the world economy. Let them worry about currency exchange rates.
For Lee, a thought about sticking with bonds: Why You Should Rebalance Your Portfolio
Good Afternoon! My name is Phil Hogg. I am a CERTIFIED FINANCIAL PLANNER (TM) Professional with Hogg-Murnighan Financial Planning located in Chicago, IL and the world wide web at www.hmfinancialplanning.com I hope to answer a few of your questions today regarding personal finance and saving for retirement.
