Hi Leigh,
Sounds like you are doing a great job at agressively saving at this point in your life - rough 23% of your income. To add to Bethany's excellent points, I would suggest considering getting a small LTC policy knowing that it will not fully cover your costs, but that will help you with them. It allows you to have smaller premiums now, however, should you ever need it, it will give you more options for how to manage cash flow at that time. Moreover, should you even need to spend down all of your assets, having LTC can help position you in a better facility to start with. I hope that helps!
Leigh, It sounds like you are thinking about all of the right things! In recent years, LTC policies have seen a significant jump in premiums and a reduction in benefits. You may want to request a LTC quote based on preliminary health information and consider the benefits available. 'Self-insuring' with a Roth could be an alternative to an LTC policy if the premiums are too pricey. Thanks for the article, Rachel!
For Leigh, here's an article about navigating long-term care that explains some of the options available for covering those costs...http://www.kiplinger.com/article/insurance/T066-C000-S001-navigate-a-course-for-long-term-care.html
And Kate, whenever you're ready, here's one from Cadee
Hi Cadee - It is always difficult for advisors to answer questions like this, because nothing is for sure, and what was working last year, can stop working this year.
I would look for a mutual fund that invests in high quality dividend paying stocks with a reasonable long-term track record, and a reasonable expense ratio of less than one percent.
Cadee - As always, please make sure your portfolio is well diversified in other asset classes such as bonds and cash.
Cadee - if you read Kiplinger, then you know that a well-diversified portfolio is what you should be trying to build. I would think seriously about a mutual fund that owns a basket of stocks because hand-picking one or two stocks is just too risky. You should probably have some bonds and cash, not just stocks.
Bethany, here's another one for you from Stam123
Stam, to make sure I am answering your question correctly. Do you mean websites to suggest strategies for the best accounts to withdrawal money from first, or something else?
Kate, here's one for you from DaveL
Hi DaveL,
Good job on saving for your children's education! A couple of things to keep in mind with the two vehicles you are using. 1) 529 plans get hit with a penalty and taxes if not used for education expeneses, 2) UGMAs are legally your child's asset to do with as they wish at their age 18 or 21 depending on your state laws. These two pieces of informaiton can inform a family on the order in which they want to use these funds. If your concern is your child will blow the UGMA money once they are of age if can make sense to use that for tuition, etc now and save the 529 for grad school or to transfer it to another child, yourself or your spouse, or a niece or nephew. If on the other hand you are confident in your child's money management skills it may be best to use the 529 to pay tuition first and have the remainder available for them for buying a home, starting a business, etc.
And Chris, you can take this one from Terry
Terry, you use an interesting term "pitching" I'm not a big fan of Variable annuities because of the hidden commissions and high fees that eat away at investor profits.
Terry, I'd recommend you find a fee-only planner so you can get a second opinion. An immediate annuity might give you the predictable income you want in addition to a diversified portfolio.
Planners, when you're ready, here's our last question of the day from Cachin
Hi Cachin - It probably makes sense to allocate a certain portion of you bond portfolio to the shorter end of the scale. Long term bonds stand to lose value when interest rates return to more normal historical levels. There isn't much yield in the short-term bonds, but they won't lose as much value when the interest rates begin to rise.
Alright, we have time for one more question today from Donna
Donna, you may be a good candidate for a "file and suspend" strategy. Taking your 1/2 of your spouse's SS benefit now and then your's later.
Donna, ...the SS office or a fee only planner could help you here.
Unfortunately, we are out of time for today's chat. If you did not receive an answer to your question, or have other questions to ask, we will be back again next Tuesday, February 12. Same time, same place. If you submitted a question and didn't receive an answer, we will re-submit it for you during next Tuesday's chat -- and you will be first up!
A big thank you to everyone who submitted questions today!
And a special thank you to all the NAPFA planners who helped out! We really appreciate it!
We will be posting transcripts of today's chats later this evening -- we will post questions and answers next to each so that it's easier to read. You will find transcripts at this same URL. Thanks for sticking with us today! And be sure to join us again next Tuesday!
Hi Leigh,
Leigh, It sounds like you are thinking about all of the right things! In recent years, LTC policies have seen a significant jump in premiums and a reduction in benefits. You may want to request a LTC quote based on preliminary health information and consider the benefits available. 'Self-insuring' with a Roth could be an alternative to an LTC policy if the premiums are too pricey. Thanks for the article, Rachel!
Hi Cadee - It is always difficult for advisors to answer questions like this, because nothing is for sure, and what was working last year, can stop working this year.
