Chadstroma
Footballguy
Yea, but most lenders will not have them on the loan to co-sign at that age though you might find one.Kid can drive at 16 or 17, though.
Yea, but most lenders will not have them on the loan to co-sign at that age though you might find one.Kid can drive at 16 or 17, though.
This one's pretty easy - estimate 0% (real, or tracked with inflation nominal). That matches historical for housing returns
Quote from Robert Shiller below, where he expounded on the point - "Don't invest in housing"
Not speaking for Wilked, but i don't think you can assume anything with respect to residential real estate...especially in a relatively short time frame. There are so many peaks and valleys and there are different local factors involved everywhere. If you want to be conservative, plan for the worst.Well, what I am really trying to figure out is where my expected breakeven point would be at 7 years in the future, based on the amount of equity accrued between the down payment and the mortgage payments, such that I wouldn't have to take a loss if I wanted to sell at that point. Obviously nothing is set in stone and I would have to account for a variety of scenarios, but are you saying that for this purpose you would assume that the house would sell for the amount for the same as the purchase price?
What you are doing, then, is to evaluate rent vs buy for a period of 7 years.Well, what I am really trying to figure out is where my expected breakeven point would be at 7 years in the future, based on the amount of equity accrued between the down payment and the mortgage payments, such that I wouldn't have to take a loss if I wanted to sell at that point. Obviously nothing is set in stone and I would have to account for a variety of scenarios, but are you saying that for this purpose you would assume that the house would sell for the amount for the same as the purchase price?
Exactly. In the worst case scenario, we could just stay, it would be fine, or maybe consider renting it out. It's not like we have any firm plan, but I like the idea of the flexibility for when my daughter is done high school. (but trying to balance against the possibility that we wouldn't move anyway and the tangible/intangible value of home ownership over the next 7 years. (We have both owned, rented, and rented out properties in the past, so we know a lot about the costs/benefits.)Not speaking for Wilked, but i don't think you can assume anything with respect to residential real estate...especially in a relatively short time frame. There are so many peaks and valleys and there are different local factors involved everywhere. If you want to be conservative, plan for the worst.
Plus, for the first 7 years, you're going to be paying majority interest anyway (assuming regular down payment and 30 year mtg)
thank you, I will play around with that.What you are doing, then, is to evaluate rent vs buy for a period of 7 years.
This is widely agreed to be the best calculator for this exercise
http://www.nytimes.com/interactive/2014/upshot/buy-rent-calculator.html?_r=0
A couple of things on that. 1) Most lenders have moved away from just adding people to an existing card as a signer though you can as an authorized user (difference in ownership and in this discussion in regards to credit). 2) Most lenders (and I believe the credit bureaus as well- not sure on that but I know there was a lot of discussion a while back on it) don't grandfather in the credit history once added as a signer on a card. Meaning- if the card was opened in 2010 you use to be able to add someone as signer on that card and they magically had credit since 2010. I don't think that that happens anymore.My parents added me to their credit card when I was 16, "so I wouldn't be stranded out of gas with no money somewhere". It might be possible to add a child to a credit card even younger than that. And it definitely helps the kids credit rating (assuming the parents have good credit and never screw up that card). That card still shows up on my credit report 20+ years later with an excellent rating (it's still active, and my name is still on it but I don't have the physical card). When my credit was pulled for a mortgage, the guy at the bank quickly asked how I have a credit line stretching back to when I was 12 (age when the card was opened, before I was signed onto it), but otherwise it didn't raise a flag.
Personal opinion, I don't know how much you each make or your pensions/other retirement assets, but I would recommend maxing your 401k/403b or getting very close to it before doing 529s. You may be missing out on a 20% state tax credit for 529s but you're missing out on hidden deductions on reducing your taxable wages with 401k/403b contributions.Related to the 529 discussion:
Dentist mentioned (and others reinforced) that funding 529s should be way down the list of things to take care of, so I wanted to get feedback on my approach.
We have a 529 account for each kid because we get a 20% state tax credit up to $5,000 in contributions to a 529, so we thought it was throwing away free money not to contribute up to that amount. The contributions are split evenly between the two.
Other details:
My wife and I are 45 & 42. No debt other than our house. We have an emergency fund of more than 12 months of expenses right now. We are paying extra on our mortgage and should have the house paid off in less than 5 years.
My wife contributes 3% to her 401K to get the 3% company match. My company puts in 10% to my 403b regardless of my contribution (I currently don't contribute anything additionally). We max out our Roth IRAs. I contribute the family max to my HSA at work.
Any thoughts or feedback?
I have this potential situation at the moment. I could sell my house to my sister and then buy a house in the development we originally wanted from my friend's dad.FUBAR said:We are absolutely thrilled to be buying without a realtor. Unique circumstances but saving ~$20k is a huge win.
Ditto.phatdawg said:I hadn't given enough thought to reducing taxable wages until paging through this thread. I am certainly going to now.
I introduced a mix of Roth for my 401(k) a bit ago. When my cash flow and debt get into a better light- my plan is to increase the Roth contributions by a lot more. Having a healthy mix basically just gives you more flexibility- I am not worried about balancing them out now as I have a couple of decades before retirement but I do need to increase the Roth side for sure.Ditto.
This thread also is leading me towards putting money in a roth IRA so that I can have some options at retirement based on the tax brackets at that time.
There are real estate lawyers who can do this for an hourly fee, I think, right?I have this potential situation at the moment. I could sell my house to my sister and then buy a house in the development we originally wanted from my friend's dad.
I am pretty sure as time goes on here people will be listing houses more and more without the use of a realtor. As long as your house can be located online somewhere, people will find it.
A while back I asked my realtor how much she would charge me to do the paperwork and complete the sale if I ever found a buyer for my house on my own and she said 2%. I was like waaaaaaaaat????? Seemed rather pricey for her to do just do a few hours of paperwork.
Just to be clear, not all 401k plans offer a Roth option.I introduced a mix of Roth for my 401(k) a bit ago. When my cash flow and debt get into a better light- my plan is to increase the Roth contributions by a lot more. Having a healthy mix basically just gives you more flexibility- I am not worried about balancing them out now as I have a couple of decades before retirement but I do need to increase the Roth side for sure.
yes. That's what we're doing. Title search/exam, insurance, recording, contract, deed, basically everything except appraisal and inspection for under $3k. You might be able to find cheaper.There are real estate lawyers who can do this for an hourly fee, I think, right?
True but more and more do these days. It is becoming pretty common from before where it was fairly rare.Just to be clear, not all 401k plans offer a Roth option.
If Fidelity is administering it- I would be shocked if it does not have the option.Huh, I never even looked to see if there was a Roth option connected to my fidelity 403b. I shall do that now
It did not.If Fidelity is administering it- I would be shocked if it does not have the option.
Your plan is governed by someone at your company; they have the ultimate say in what is or is not available in your plan. Fidelity offers the Roth option but your plan admin have to choose to offer it. If you know who that person is, you can go talk to them and see what they say about having it added in the future.It did not.If Fidelity is administering it- I would be shocked if it does not have the option.
It did not.
Makes sense. I wonder if there is an extra cost to it or who ever made the decision just doesn't care.... most likely a small extra cost and someone just doesn't care.Your plan is governed by someone at your company; they have the ultimate say in what is or is not available in your plan. Fidelity offers the Roth option but your plan admin have to choose to offer it. If you know who that person is, you can go talk to them and see what they say about having it added in the future.
There was no Roth in my investment elections, but like I said, I can just open one up through Fidelity, probably through the same log in I use now. I will have to check that out. Will probably just call and see if there is something they do offer but I am just missing it.
Odd. My old employer 401k through them offered it and I have all my retirement rollover IRA's with them including the Roth. Surprising.
Yea, that is what I did. It still shows my old employers 401k stuff and employee stock purchase program part even though the company has been gone for almost 10 years now. The IRA opens in a new account. I don't remember the original process as I did it a long time ago but I did have to stop by an office to get a few things done which was easy peasy.There was no Roth in my investment elections, but like I said, I can just open one up through Fidelity, probably through the same log in I use now. I will have to check that out. Will probably just call and see if there is something they do offer but I am just missing it.
In order to sit for the actual CFP exam you'll need to meet certain qualifications from a coursework standpoint. I'd start with that to see if your education background satisfies it or if you'll need to take courses first.question for the group.
If I wanted to become a certified financial planner / advisor in 1-3 years (upon first retirement), what steps should I start taking? I have almost no formal training but a decent understanding of planning and personal finances. The main part I don't think I'd like in the profession is any push to sell things to people that might not be in their best interest (so the new law is a very good thing IMO). I'd want to be fee-based, not commission.
See articlequestion for the group.
If I wanted to become a certified financial planner / advisor in 1-3 years (upon first retirement), what steps should I start taking? I have almost no formal training but a decent understanding of planning and personal finances. The main part I don't think I'd like in the profession is any push to sell things to people that might not be in their best interest (so the new law is a very good thing IMO). I'd want to be fee-based, not commission.
CFA is Chartered Financial Analyst, a whole world different than the CFP certification. I'm not sure if there's a different certification than the CFP if you're trying to be an advisor or if it's just used interchangeably.
I can't really speak to the steps required for a license, but it seems like a tough retirement gig. Are you looking for full-time work with this? Part time? Doing things yourself? Probably depends on what you're looking to do with it, but it's a pretty tough field to really get into, I think.FUBAR said:question for the group.
If I wanted to become a certified financial planner / advisor in 1-3 years (upon first retirement), what steps should I start taking? I have almost no formal training but a decent understanding of planning and personal finances. The main part I don't think I'd like in the profession is any push to sell things to people that might not be in their best interest (so the new law is a very good thing IMO). I'd want to be fee-based, not commission.
Full time. I'll retire from the army in the next 3 years but only be 40-42. So not ready to stop working but I'll have the flexibility to do what I want, not just find something to pay the bills.I can't really speak to the steps required for a license, but it seems like a tough retirement gig. Are you looking for full-time work with this? Part time? Doing things yourself? Probably depends on what you're looking to do with it, but it's a pretty tough field to really get into, I think.
Yeah, back in the day I called myself an "advisor" because I had a series 6 and 63. Allowed me to do mutual fund type stuff, and variable annuities and variable life insurance (which I never sold any of). That can take just a few months. The "certified" stuff requires quite a bit more. The answer will depend on what you'd like to focus your practice on. Do you want to specialize in helping folks take the steps to start saving for retirement? Do you want to only work with people who have 6 figures of invest-able asset? Do you want to have any insurance related sales (lots of guys in insurance agencies only do retirement based planning ).Difference b/w the advisor and planner here:
http://www.businessinsider.com/difference-between-financial-advisor-and-certified-financial-planner-2014-7
You will want to get licensed as pretty much the first steps towards all of this. To be CFP I believe there is a time requirement of time working- so it is not something you can just do. However, to start the road is fairly easy. You can look to jump on with a financial brokerage like Ameriprise, Morgan Stanley, Edward Jones. Usually these will be pure commission type of positions that you can get hired on directly and get fully licensed. The positions that aren't are usually looking for already licensed individuals with established books of business.Full time. I'll retire from the army in the next 3 years but only be 40-42. So not ready to stop working but I'll have the flexibility to do what I want, not just find something to pay the bills.
Do you (or anyone else) know how to check to see if the pension is underfunded?The starting point to figure this out is the risk tolerance of your parents and what other retirement funds they have or don't have. The pension for life is nice because it is backed by the government (PBGC- kind of like the FDIC but for pensions) so it is pretty much as safe as you can get. If this is pretty much their only income other than social security then they may want to consider staying put. By taking the lump sum, they could potentially end up getting better returns but that opens up various levels of risk to potentially achieve that depending on the products that are invested.
I am not an expert on taxes by any stretch but that could or could not be a huge factor. I believe you can roll the pension over into a retirement account to avoid taxes but I am not 100% sure on that.
A big benefit for the lump sum is being able to leave that lump sum to whomever she wishes while pensions usually only available to spouses and usually have to take a lower payout for those options.
Once you decide risk acceptance level then you can figure out what potential products to invest in and likely return on those. There is no real 'right' answer- it is the right answer for your parents situation, wants and needs.
You should be sent an annual prospectus. If not, call your pension fund and have them email you one. That status is typically stated very clearly in there.Do you (or anyone else) know how to check to see if the pension is underfunded?
VanguardI need to set up an IRA quickly to deduct from 2015 taxable income. Where to start?
Unless you already have an account with Vanguard, I would go with something like Fidelity just to make sure the account is funded by 4/18. Vanguard is slow.Vanguard
Submitted my 2015 IRA contribution on 4/5 and it funded on 4/6.metoo said:Unless you already have an account with Vanguard, I would go with something like Fidelity just to make sure the account is funded by 4/18. Vanguard is slow.
Also related to this. Any insight as to where to start looking for health insurance in retirement? They are very concerned with this and asked if I knew anything about it (which I do not).My mother just informed me she is retiring next year. She asked what I thought she should do with her pension (factory worker at Honda). Her options are 1784/mo (and some other options for a beneficiary) for lifetime or 285K payout. Is there a clear winner in this situation? What else needs to be considered? What are the tax implications for each scenario?
She will be 65 and is in good health. Her mother is 86.
They have no debt and decent savings.
does Honda offer anything to their retirees?Also related to this. Any insight as to where to start looking for health insurance in retirement? They are very concerned with this and asked if I knew anything about it (which I do not).
They've got a few options (I say "they", I assume your mother and father both on the plan?). They should be allowed to remain the plan for up to 18 months via COBRA (may be the best choice). Alternatively, if your dad has an option for coverage with his job - both can go there.Also related to this. Any insight as to where to start looking for health insurance in retirement? They are very concerned with this and asked if I knew anything about it (which I do not).
Also, did you get an adequate answer to your pension question of theirs. It's a good chunk of what I do and would be happy to discuss options (unless they've already decided).Also related to this. Any insight as to where to start looking for health insurance in retirement? They are very concerned with this and asked if I knew anything about it (which I do not).
Very undecided. They somewhat need the money on a monthly basis to cover living expenses (which is probably the biggest part that needs addressed - but my father is very private with finances, so its tough to discuss this part with them). Would love to hear your thoughts.Also, did you get an adequate answer to your pension question of theirs. It's a good chunk of what I do and would be happy to discuss options (unless they've already decided).
Submitted my 2015 IRA contribution on 4/5 and it funded on 4/6.
I believe pensions are required to provide information on their funding annually. Shouldn't be too hard to get a copy of the report by asking whomever administers the pension.Random said:Do you (or anyone else) know how to check to see if the pension is underfunded?
Well, if she's in good health and there is a history of longevity in the family (there seems to be), then more often then not the monthly pension will ultimately win out over the lump sum. Companies actually like the lump sum as it's gets a "promise" off their books. They've "promised her" 1,784 a month (likely index at least a bit for inflation, most are) for her lifetime. That could be a very, very long time. Say it's just a 3% inflationary kicker - it's only a $21,408/yr promise now, but at her age 85 it's a $37,539/yr promise and growing. She makes it to age 90, and they've paid out over $825k. You don't give up a "promise" of a lifetime income unless you're coming out way ahead.Very undecided. They somewhat need the money on a monthly basis to cover living expenses (which is probably the biggest part that needs addressed - but my father is very private with finances, so its tough to discuss this part with them). Would love to hear your thoughts.
As I just told them over the weekend (they had gone to a few banks/retirement planners) I just dont see how the cash option wins here (unless they dont need the money). It looks to me like it will only produce 10-15k/yr (at 4% withdraw rate) vs 20K/yr for the pension.
Depends on quite a few factors. I just ran a very, very basic and fast quote. At best health, 65 year old woman could get 200k for 4,577 a year. That could be more than they need/want; or not enough.Ok, so just curious. If you dont mind, what would a permanent life policy cost for a healthy 65yo female?