Jump-Start Your Retirement Plan, December 2014 - Live Chats, Q&As: Free Advice on Retirement, Investing, Personal Finance -- Kiplinger

Kiplinger Live Chat

Jump-Start Your Retirement Plan, December 2014

Kiplinger is teaming up with the National Association of Personal Financial Advisors (NAPFA), whose planners will answer questions on retirement planning and other financial challenges. Submit your questions here and get free personalized financial advice on Thursday, December 11, from 9 a.m. to 5 p.m. ET.

  • I just turned 55 this week. I have a small pension from a company I worked for 10 years ago. The company is moving its headquarters oversees and I'm thinking my pension may no longer be available when I am eligible to retire. I want to transfer the pension into another financial institution. I've got the papers I need to make the transfer. How do I go about selecting a financial institution for the rollover? If I error in selecting a company, am I able to do another rollover? To date this is the only retirement amount I have so I want to make sure it keeps making money.
  • That's kind of what I figured, but was curious to see if there were any rules of thumb based on previous experience. I imagine that my question will probably become more common as people with high student loan burdens start contemplating their financial futures. Thanks for the time!
  • Regina, There are various combinations on receiving your social security benefits. At age 66 you will be able to file for spousal benefits now at 1/2 your husband's benefit then you can file for your own benefits at age 70. However, to make sure your situation is addressed, make an appointment with your nearest social security office and they will provide you with information on how to optimize your social security benefit based on your specific situation.

    Retirement Planner: Suspending Retirement Benefit Payments

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  • David, of course, cash will be king again when interest rates rise, but if you want an alternative to the lifecycle fund, real estate funds, market neutral funds (long-short funds) would be worth a look. I am not much of a gold bug, but you could look at GLD if you are so inclined.
  • Ron: You should access the Social Security website for both you and your fiancée to determine your eligible benefits in retirement. Once you have this information, you can determine your approximate income between Social Security and her pension to see if it will cover your living expenses. The main financial thing to consider is, what happens if one of you were to pass away prematurely? Would you receive her pension if your soon-to-be wife passes away? For clients similar to you, financial planners often consider life insurance to insure against an untimely death and the loss of a pension or Social Security benefits.
  • My wife and I presently file jointly, I make ~50K a year where as she works for a nonprofit making ~9.25 an hour 35 hr work weeks typically we come in right around the 70-75 k tax bracket. The non profit has a pension and I contribute 6% with 4% mathc(10%tot) to comp 401k. We can not afford to contribute much more to a retirement, du to my wife's salary only covering her student loans and other bills(half of my pay goes to a mortgage). Are there any tax advantages to we can use as she works for a non-profit(coming up on 4th yr) to help alleviate some of the strain?
  • Hi, I'm 32 and still burdened by student loans (like many folks). I have over $50k in loans, federal and private, serviced by Navient (formerly Sallie Mae). Currently I can't afford to make payments on all of them so I have some in forbearance and some paying interest only. Do you think it might be wise to look into consolidating with a private lender so that I only have one payment?
  • Hi Kelly thanks for answering my question. My wife did work FT for 20 years or so before she got SS disability benefit. That said is she entitle to the regular SS retirement benefit just like me? If so, can she also claim SS Spouse retirement benefit as well? Happy holiday.
  • Christine: Try looking for a discount broker in an online search. Here are a few to look into: Scottrade (if you go to there website, there's a place they list prices at a number of brokerage firms, this is a really good thing to compare), Charles Schwab, ETrade, TD Ameritrade. There's also Vanguard and Fidelity. Try to find one you like as you don't want to keep switching, some funds available at one firm may not be available at another. But yes you could move it.
  • Plan to retire at 68 on Dec 31,2015, my birthday. I have a 457 with TIAA/CREF. Should I roll over to Vanguard. Which plan is cheaper with low cost index funds?
  • Hello! Thanks for this!
    Right now, my wife is a stay-at-home mom, but in a few years, when our youngest kid in in school, she's planning to go back to work, which would pretty much double our salary. Then, we can really shovel all that delicious new money toward sensible financial goals. In the meantime, we're making due as a one-income home.

    All our debts are at fairly low interest rates. A student loan at 1.75%. A car loan at 2%. And our mortgage at 5%. No credit card debts.

    For now, should I be putting little bits of extra money into 529 accounts for the kids' college, into my retirement IRA/401K, or pay down our highest interest debt(our mortgage at 5%)? Or something else entirely?

    What should change when she goes back to work?
  • Hi Jarrod -- Here are some tips we've compiled on repaying student loans: Things You Didn't Know About Paying Off Student Loans.
  • EME091: I am not aware of any tax strategies or breaks for employees of non profit organizations. It is a labor of love. If you do your own taxes on turbo tax or something similar, you can research on the program, but they would have directed you to any breaks. Are you taking advantage of interest rate deduction on student loans? Thanks for joining us today
  • Hi retirein2year- Your wife is entitled to regular SS retirement benefits on her own earnings record, but Social Security takes the average of the highest 35 years of earnings. Since she only has 20 years of earnings, you will have to check with Social Security to see what her benefit will be on her own record. Then, compare that number to half of what her SS Spousal benefit would be, and she can select the higher of the two (not both benefits). Hope that helps- so it's either her SS retirement benefit or half of yours.
  • Sarah: Congratulations on your pending retirement, one year to go! Both TIAA Cref and Vanguard are not-for-profit investment firms, and both are great companies. Vanguard tends to have lower costs, but don't let this be the only factor. Since you have a year, do some homework on both by visiting their web site and/or make a call to get an indication of their ability to answer your questions. IN any case make sure you put together a well-diversified portfolio that fits your tolerance for risk, but provides a return to enable you to retire comfortably
  • I am a federal government employee living in Oklahoma. I max out my TSP every year. My wife has recently gone back to work and is going to increase my tax burden. I have some cash available at the end of this year that I could use to reduce my tax liability. What would be one or a few good options for me to do that would help ease the amount of taxes I will have to pay this year? I don't think a Roth will help in this area, maybe a 529 for the kids? What would make most sense? Thank you.
  • Hi, I just got married and I need an idea where can I start investing for retirement. We have a savings account but me and my wife would like to have an investment funds but we don't know where to start. Should we get a mutual fund bonds etc..?
  • Hi Jarrod, I'm sorry to hear about all that debt. You certainly are not alone.
    Consolidating your debt will not reduce your debt. In fact depending on the refinancing arrangement your interest costs could be higher even though your monthly payments could be lower. Without knowing the specifics of your loan arrangements, I would suggest keeping your current loans separate. This may allow you some flexibility in repayment especially for your current government student loans.
  • I am 62 my wife is 59. I plan on retiring at 66. I need help on withdrawal of savings at 66. I am taking SS at 66 and delaying my wife's SS until she can draw %50 spousal benefit, I am at full SS benefit. I am debating a lump sum vs 100% spousal benefit annuity. It would be $540,000.00 lump sum vs $2,850.00 monthly benefit at 66.
    I have a $750,000.00 IRA and $250,000.00 in emergency fund/cash/ bonds/insurance, all items are accessible and total return of 4.5% and I forecast that will be my return during retirement. My expenses are $71,000.00 a year and I will save $24,000.00 a year over next 4 years.
    What is a good plan? Hope I gave you everything needed. I am fully insured in LTC/Health/Disability/Life and I have estate planning completed except a trust and do I need a trust and what kind and will I have to continue LTC Insurance?
  • Martha: If you can do both that would be great, if not would you want to pay the student loan, and save for college. I don't know how high the student loan is so further recommendations are difficult to make. Ideally it is a great if you can buy a car without a loan, this isn't always possible. As far as paying off the mortgage it helps if that's paid off by retirement. Remember you can take a loan for college but not for retirement. Though you want to save for college, retirement should come first.
  • Is it prudent for a mother to gift $230,000 to a son and daughter in law prior to her death, if there is concern that the money( which is held in an acct in the mothers name but POD to the son and D in Law) would be owed to creditors?
    In other words, can the mother avoid having that money go to creditors by gifting the money now vs. after her death having the account transfer by P.O.D..
  • Lance: Congratulations, and best of luck in your marriage. If both of you are working, the best place to start is with your employers retirement plan, if available. Any contributions you make are often pre-tax, so you get a benefit immediately. All plans have investment options that allow you to put together a well-diversified plan, but if you are just starting then look for a target dated or age-based option based on your age an/or retirement date. If no retirement plan is available, then you can open an IRA at Vanguard and begin investing there. They also have target date funds available.
  • I am 83 & my wife is 75. We have most of our savings in Various types of annuities and Govt Index Bonds. Naturally, at our age we are invested mostly for income. My question is that when we occasionally add to our investments would we be better off adding to or taking out new annuities ( I get a commission on these as an agent) or buying more index bonds or ?????
  • Hi Frank, You're coming up soon! We have a long queue and are taking questions as they are received.
  • Newly-married. Wife and I live in the condo that she bought 5 years ago. In late 2015 we'd like to sell the condo and buy a larger detached home. In the meantime, we're paying PMI on the condo mortgage. We'd like to stop paying PMI. On the original mortgage, she has less than 20% of the principal paid. However, the value of the property has gone up significantly, so we'd have more than 20% equity (less than 80% of the property value mortgaged) if we had the mortgage company re-appraise the property. Questions: If we re-appraise the property, would the property taxes also be adjusted higher? Also, mortgage company is suggesting we *refinance* in order to eliminate the PMI, instead of re-appraise the property. If the homeowners are thinking of selling a property within 12 months, does it make sense to refinance? Do the refinance fees generally outweigh the benefits in that time period?
  • Jason, a 529 will only reduce your tax burden long term on the earnings from investments. I would recommend that your wife max out her retirement as soon as possible. Take some losses from stocks if you have any. you can sell them and buy them back within 31 days if you like the fund/stock. Gifting to charity is another way to get a deduction. Good luck, wish I had more for you.
  • Chris F.- If a mother gifts funds to her son and daughter-in-law during life, yes the funds are not subject to her creditors. But she loses all control over the money. Also- keep in mind since this amount is over the annual gift exclusion, a gift tax return will need to be filed. There are several trust strategies that can also shelter the money from creditors. The best option is to contact and estate attorney and they can strategize on gifting and trust creation.
  • i am 41, have about $12k in savings accounts (another $220k or so in various retirement funds), and make $85k per year. Question is: leave the $12k in savings, or move some to other options (cd, money market)? thanks
  • Mike D. The mortgage company's interest is only in making money for them..refi would do that and is inappropriate for you given your timeline. If they reappraise, it would be for internal use only I think, even if it raises property taxes, it would be for only a year. Ask the mortgage company who they share appraisal figures with. Great question!
  • I have a fixed rate mortgage and a secondary Interest only loan on my house. Due to the housing market I have no equity in my house. Is it better to pay extra on my primary and then refi when I do get equity or, pay extra on the interest only loan?
  • Donald: Even though you get paid a commission, I would not contribute to the annuities since the expenses tend to be high; however, your other alternative is not great either considering the current state of the bond market (i.e., rising interest rates may depress price appreciation of bonds, lessening the "total return" aspect). I am unsure of your tax bracket, but nonetheless, I would also consider state-specific shorter dated muni bonds
  • No debts (besides mortgage) [no car payments/credit cards/student loans]. My company currently puts 7.5% of my salary into 401k. What would be a good goal from my end to put into retirement (post-tax), e.g., percentage-wise? 2.5%? 5%? 7.5%? Other? TIA!
  • Hi DThompson: You can look up some online high yield savings account to earn some interest on your $12k of savings. A cd would be a good option if rates were higher, but I there isn't a compelling reason because although you can withdraw from the CD, you will likely face a penalty- which is usually the interest paid.
  • Do you think a ROTH IRA or 529 is better for saving for college?
  • Hi Lance -- Check out our Retirement section on Kiplinger.com for tips and advice on everything from how much you'll need to retire to costly retirement surprises.
  • Hi Bill,

    If you are not comfortable managing a large lump sum, annuitizing may be beneficial from the standpoint that you will know that the monthly income will be there for you and your wife. However, if the monthly payments are fixed and not indexed to inflation, your income may not be enough later in retirement. Keep in mind, that many folks are retired for 25 to 30 years. At an average inflation rate of 3.6% a year (assumed so I can keep the math simple), everything will cost twice as much in 20 years. Your situation is complex and should be evaluated in detail. I would recommend a fee-only financial planner who will be able to dig into the details and provide you with recommendations after developing a financial plan.


  • Hello Frank: Congrats on no debt...good for you! If I read your question correctly, it looks like your company matches up to 7.5% of your salary. If this is the case, as long as you can "afford" to, I would contribute up to the match percentage of 7.5%. What is TIA?
  • Why roll over a 401K to an IRA if your 401K includes access to TD AMERITRADE or has plenty of options? Is your 401K protected from lawsuits more than an IRA?
  • I am a recent college grad making just under 75k a year. I am lucky enough to have a stable job with growth potential, and am slowly building an emergency fund of 10k (~8 months expenses) (my financial priorities took a little longer to get straight than planned). I currently save 13% and get a 4% company match in my 401k, and max out my Roth IRA and HSA. Should I continue saving aggresively for retirement and try to max out my 401k, or can I afford to start saving seriously for a house. I would like to buy one in a few years with 20% down, but it seems like that will take years if I save more for retirement than for a house! However, my rental expenses are really low, and don't want to sacrifice my retirement just to buy a house sooner.
  • Stuck, I do not like interest only loans. Having said that, whichever has the highest interest rate is the one I would tackle first with extra payments. If one is variable or has a balloon payment, pay that with extra money available. You want to have only fixed interest rate loans in this interest rate environment. Thanks for your question.
  • Question: I've heard... a while ago.. that annuities are one of the worst investments out there. However, I've also heard that they've changed. Where's a good place to get an unbiased explanation of annuities and is there a best use case for owning one? Thanks Kiplinger for hosting!
  • Do I have have to wait until after tax season to make 2015 contributions to my roth ira or can I make contributions earlier than that?
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