Ah Dick P, I wish I could tell you but it depends on so many things: how much will your insurance pay?; do you have long term care insurance?; what about your health and family history? One of the groups I belong to has asserted that being in bad health when you retire could cost you as much as $250K extra in addition to your expected retirement expenses. I think that most people get tripped up by assuming Medicare will pay for everything. It doesn't. This is especially important if the need for long term care arises. Remember, we don't sell insurance, as we are fee only advisors. But we do want you to have the coverage you need. If you don't have long term care, you might price it as you are young and rates should be lower. There are now all kinds of policies: those that allow you to share a pool of benefits, those that are life insurance with the ability to fund some long term care. I'm concentrating on Long Term Care as that is typically what can be the most devastating to the best laid retirement plans.
Gloria: That's hard to say. A financial advisor can create a plan to help you answer this. Often folks underestimate the length of time they could spend in retirement and costs that could be incurred for long term care. You could live to 85, maybe 95. It is a great idea to pay off your home before you retire.
Gloria, you are doing great! Do the catch ups now since you are over 50. A fee-only planner can help you with the retirement scenario.
Sky, it sounds like you need a planner! I also know there was an Wall st journal article about constructing your own annuity (thus no annuity fees), so check that out.
Hi Kevin, consider working with a fee only planner who can analyze all the investment options in your 401k and ROTH IRA and help you create a diversified mix of U.S.
and International Stocks as well as U.S. and international bond funds/ETFs to invest in.
Sky, It's hard to answer your question in a chat room like this. You said you are worried and you want to go down the right path. I believe that a good balance of mutual funds will work for you and maybe an annuity or maybe not. I'm going to suggest that you invest some time and a little money and engage a financial planner who will do a thorough analysis of your needs and advise you accordingly. There are planners who charge advisory fees and there are those who charge hourly fees. I think going on your own to save advisory fees when you are not comfortable may not be a smart thing to do. Check out the Find a Planner service at NAPFA.org.
Kevin, you are doing great. It would probably work out for you, but a better approach would be to put together an actual retirement plan. That way you can track your progress year to year to make sure you are on track. You could discuss the retirement plan with a financial advisor.
Kevin, good that you are getting full match. Now consider fully funding that Roth IRA- $5,500.ETF's are fine and low cost, but look to diversify that portfolio also, Fidelity can help you with that or hire a planner
Sky, I think it could be difficult for $1 million to fund the difference on your withdrawals over your life time. Remember, financial planners don't just help you allocate investments; they help you model situations like yours. The sooner you determine what overall plan will work for you the better, even if you have to spend a little money on a fee only advisor. That said, I do think an annuity could be part of the solution....a LOW COST immediate annuity. The older you are and the higher the interest rate when you purchase, the larger the benefit. Be sure to use a low cost provider when you do make the purchase to avoid the high commissions many annuities incur (which reduces the lifetime benefit). As for the additional money, an advisor can help you figure that out according to your need. The annuity will serve as a fixed income asset when making the allocation. I hope this helps.
rr: My understanding is that the 5 yr holding period stars on January 1 of the year you make your first contribution to the Roth IRA. There is only one holding period.
Savannah, do you have enough to live on in retirement? Paying off the mortgage eats up liquidity that you may need. However, if you have enough saved, then paying off the mortgage is a great goal.
Hi Joseph, try contacting the plan administrator ( ex. Fidelity, Vanguard etc.) to start rolling over your defined contribution plan. The only reason I can think of for this delay with your employer could be that they haven't yet finalized their profit sharing contribution for 2013
Hi billie. I'm afraid I'm not familiar with either of those companies but I have clients who like to play the market with individual companies and I tell them it is okay as long as it is with money that they can afford to lose. You said you don't need the money but your cost basis and how you feel about holding on to those stocks should guide you in making your decision.
Hi Connie -- Your questions today were fielded by advisers Brent Perry, Bobbie Munroe and George Middleton.
Hassan: You can use a total bond index, but first look at it's holdings. Often holdings cover government, mortgage, international, corporate bonds, high yield and others. If you don't feel the bond index covers different type bonds then you could look into individual funds that cover the areas mentioned. You could also have an advisor help you create a bond ladder that matures over many years.
Hassan, the 20% stocks and 80% bonds at age 80 is a rule of thumb which may or may not apply to your situation. The total bond index is a viable option, but as you indicated, it is a good idea to diversify even further with other asset classes such as emerging market debt.
Thank you to everyone who has submitted questions so far today! We're answering them in the order in which they are received, so if you don't see yours right away, don't fret. We will be getting to them as soon as we can. All answers will also be available in the chat transcript later.
Jason, I really don't know what todo about those loans, but talk to the college?
Hi Philly, the managed account provider, who works in partnership with your 401(k) should be able to provide this information and compare your performance to benchmarks. And this information could already be there on your 401k statement.
You can always look up the returns on target retirement funds by visiting the fund company's website.
Hi Tom. The usual withdrawal order is savings, taxable stocks and bonds, retirement funds (don't forget those reqiured distributions at 70 1/2) and pulling up the rear is tax deferred and tax free. Having said all of that, it really depends on your situation. If you are in a year when you are in a high tax brackett and need supplemental income, tax free might be the way to go. Other times you may need to make a special purchase like a vacation or a vehicle. Tax free can pay for those items without increasing your tax liability.
Dennis: The amount held in international funds will vary depending on your allocation and advisors vary on the % to hold. Generally between 9 and 25% stock funds. It used to be that the US and International markets were not as correlated but over the last few years they very much follow each other. That said holding international funds does still diversify your portfolio.
Chris, Walt has actually signed off for the day. We will see if any of the other advisers can respond!
KG, if you can't do the roth, open a traditional IRA and put in non-deductible contributions, doesn't matter what you income is. Later, you may consider converting that money in the trad IRA to the ROth
Jason B. I can't speak on the need for an original ink signature or e-signature. The bigger question is whether you received these loans or not. You'll need to dig through your records to determine which loans were paid for your school expenses. Then, dig deeper into the loans that you can't determine where they came from. Another clue could come from your credit report which will show dates of the loans. You are entitled to a free copy of your credit report each year from www.annualcreditreport.com.