Federal student loans can provide payment relief. Depending on your specific loans and situation, this may be worth exploring.
And next week we expect to launch a list of great mutual funds for dividends. Stay tuned to Kiplinger.com for that.
Susan and Richard, you are on deck! Thanks for your questions.
@Sushiland. I think you'll be fine with an international large cap. Vanguard has an emerging markets ETF >> symbol is VWO that you can consider. Vanguard also has a small value, ETF symbol is VBR
Good call on VBR, Philip. That's the fund that Steve Goldberg recommended in the column I just shared.
Sushiland. The Kiplinger resources provided are great for income investments. My preference is to stick with funds to maintain diversification. Something like Vanguard's High Dividend Yield Index fund, Vanguards High-Yield Corporate and Vanguard REIT Index could be appropriate. Check with the advisor that is managing your other account to prevent overlap and creating a concentrated position.
Carlos, extending the payments on the loans will ultimately mean that you may pay more in interest over time. If cash flow is tight, which I gather it may not be, since you are contemplating saving for retirement, you might consider repayment relief. Otherwise, y
ou may want to pay down the loans at 5.25% interest on standard repayment to get through the principal more efficiently.
Two hours down and we are switching gears. A big thank you to the advisers who were on hand to answer your questions this morning. On hand for the next two hours will be Shannon Lunsford, Pat Jennerjohn, Frank Boucher, Robert Schmansky and Debbie Frazier. Welcome!
Susan, Investing in specific companies can be complex and time consuming. That is why mutual funds and exchange traded funds can be helpful. When you say 5.9%, do you mean dividend or total return. It also depends on the industry..you expect larger returns from technology type companies, but also large swings in returns, a utility company will give you a smaller total return, but most likely a smoother ride. This also applies to mutual fund companies. Look at companies or mutual funds that are like or similar to the one you have invested in and see it this investment is more, less or the same as it's peers.
Hi, this is Pat Jennerjohn with Focused Finances in Oakland, California
Here's another reader-submitted question:
Reader: I'm single. I filed for Social Security benefits at age 62, and now am 64. I am returning to work, and I don't need my benefits for a while. Can i suspend them and then accrue extra benefits?
Reader. I think that you can withdraw your application before you reach full retirement age, BUT, you have to pay back all of the money you have received.
I agree with Pat. The file-and-suspend strategy only works for those who originally file at full retirement age.
However, file and suspend is a tactic for married couples, to maximize the spousal benefit, and Reader is single, and started their benefit two years ago. So the 12 month rule applies in terms of paying back your benefit, which is not quite the same as file and suspend.
Reader, let the Social Security office know that you are working again and they will reduce your benefits, and/or suspend them. Before full retirement age (66), if you earn more than $15,480 (2014), then your benefits will be reduced $1 for every $2 you earn over this limit. Once your hit age 66, the Social Security Administration will recalculate your benefit amount for the months your benefits were reduced, even if they were reduced to $0.
Shannon is right, you can simply suspend benefits if you have returned to work - my bad.
Gail and Scott, you are up next.
Richard, if you are referring to a SEP-IRA account, one option would be to roll this over to a Rollover IRA account instead of cashing it out as a distribution.
Richard, I tend to prefer mutual funds to ETFs personally. With ETFs, you have to watch the premium you may pay for the stock, and you never know when you rebalance if the fund will be trading at an equally advantageous premium or discount. In general, if this is a plan that is going into a taxable account I prefer equity funds in taxable accounts. A good domestic stock fund, which could be a dividend fund, would be my preference if it fit your needs. My personal preference is Vanguard funds or ETFs.
Agree with Shannon if this is a SEP-IRA to roll it over and manage distributions; I did find with a quick search online a Supplemental Employee Investment Plan (SEIP) that may not be qualified to rollover.
Richard, I read your original question and it seems that this account is a taxable account. I don't know what your cash flow needs are, but funding 10 years is a big task. I would recommend a balanced portfolio of a variety of investments. the problem with one type of fund or ETF is that the category could get hammered. Vanguard dividend growth fund is a terrific one and could be a good starting point.
Gail, if your husband is still employed then you can contribute to spousal IRAs (traditional or Roth). In terms of your 401k, if you have good investment choices in your current plan, it doesn't hurt to leave it there for a while. However, if you want more control of the account, then you could roll it to your IRA. There is no fixed rule as to what to do with an old 401k plan, however, rolling it to an IRA will simplify things - fewer statements to track.
Gail, you can still contribute to IRAs, on your own earnings for 2014, then on spousal for beyond if you do not work. The issue of rolling over the 401(k) depends on the company used. Fidelity or Vanguard would be ones I would continue...insurance type companies such as Valic, Lincoln or others, I may want to advise a rollover.
Gail, You can contribute to Ira's as long as you have earned income. If you are not working, you can set up a spousal IRA that your husband can contribute to. As far as rolling over your 401(k), I generally think it is a good idea because expenses are usually lower in an IRA and you have an unlimited number of investment options and you have a lot more flexibility when it comes to withdrawals.
Gail, my preference is to maximize control, and rolling to an IRA provides max control. There may be reasons to maintain the 401(k) however.
Agree with the others on contributions. A good source to review income limits is IRS Publication 590 at www.irs.gov.
I agree with Robert, with the exception of choosing investments. With a 401(k) plan at least all choices are on one site. And no you continue with your current IRA.
Gail, to clarify Deborah's remarks, you continue contributions to your current IRAs. They continue based on the fact your husband has earned income, but to into your existing accounts.