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Financial Experts Chat With Viewers
Financial experts answered viewers’ questions during a live chat Thursday afternoon. More than 200 people participated in the chat.
The following is a transcript of the chat.
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heartland(Q) Credit card debt with high interest rate. Is it better to do a transfer to a card with a lower interest rate ... a 0% for 12 months then a lower interest rate or would it be better to do a debt consolidation for the credit card debt?
Kevin_Taylor(A) I would caution anyone wanting to eliminate debt by moving debt. In other words, please keep in mind that the most important thing you could do is work on making more than the minimum payment per month. As for transfering the balance, please consider the rate after your first 12 months, the "alternate" rate they may charge if you are late or your credit score changes.
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heartland(Q) Credit card debt with high interest rate. Is it better to do a transfer to a card with a lower interest rate ... a 0% for 12 months then a lower interest rate or would it be better to do a debt consolidation for the credit card debt?
Eric_Allee(A) In short..yes, it is good get a low interest rate on credit card balances. You should watch out for fees on the tranfer...3%-5% of the balance is typically charged on the transfer. 2 things to watch out for: 1) excessive balance transfers do hurt your credit score slightly 2) be extra careful to not run up the balance again on the credit card paid off Good luck!
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babyem2008(Q) how can u tell if u r spending too much money for car insurance
Eric_Allee(A) make sure you shop around at least every few years. if you do find a lower rate and are thinking about switching, ask your agent what the first year discount is so that you have some idea what it might jump up to the second year.
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phillip(Q) I have up to $10k to invest. I am considering investing $5000 in GE. My second choice at this point is Garmin. Would you consider these to be wise investments?
Kevin_Taylor(A) Although I cannot make specific buy/sell recommendations on stocks, may I make a couple of suggestions? First, when buying a single stock, you can make a killing or get killed. Even with the relatively cheap values in the market, please make sure that you afford the loss. Talk to an advisor if you need someone to help throw ideas off of. There are even discount options that you might find if what you're looking for is occasional advice. All the best to you. Thanks
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imrj8853(Q) My investments are invested as follows 52% bonds and 46% stocks. They are big/blue cap stocks. But I concerned because I am currently retired and don't think I have 20-30 years to wait for the stock to return. If it doesn't fall much more than it is now I can still be comfortable.
Eric_Allee(A) I don't think it will take 20-30 years for this market to recover, however you should be prepared that it will take some time. I like to see retirees with at least 5 years of expected expenses in safe ivestment vehicles, like Money Market funds or CDs. The other prortion of your portfolio is not that out of line with your current allocations, as long as you have that 5 years in safe investments.
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phillip(Q) Another question I have is in regards to my children's 529 plans for college. I put $500 a month in my older son's, and have not gotten around to setting one up yet for my younger son. I have lost approximately $1000 with my oldest's. Would you advise stopping or minimizing the amount I am putting in to the plan, and would you advise holding off on opening a plan for my younger son at this point?
Eric_Allee(A) If you are choose your own investments, you might consider a more conservative allocation, depending on how close your older son is to graduation. I would not recommend backing off on your saving plan.
Linda(Q) Hello! My question concerns my son's Learning Quest 529 plan. He is a senior in highschool and I have the investment going to "conservative" but there is a "very conservative" I can also choose. It is now, after the crash(es) lower than I have originally invested. Your ideas!?!? =)
Kevin_Taylor(A) If you have an event that is a short time away as you have, please don't worry too much about trying to beat the market or "making" a bunch of money. Now might be a time to think about making sure that you keep your money.
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heartland2(Q) I am not seeing any of the responses. Is there something I need to do? I originally signed in as Heartland and sent a question then got a message that I was disconnected. I would like to see the response to my question.
KCTV5(A) All of the questions are listed on the same page of the Web site where you logged in. Also, if you don't see your answer, we will post a copy of the transcript on that same page tomorrow morning.
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Patti_R.(Q) I am 56 years old. Do I leave everything alone and "ride out" this storm....I'm in a very diversified plan. Also is now a good time to refinance a home for a person my age....I have a 30 yr. mortgage with 21 years left to pay and would like to get a 15 yr. mortgage....I'm currently at 7%. Thank you for your help. Patti R.
Eric_Allee(A) Are you within 5 years of retirement? If so, you may need to make some hard decisions about reallocating your portfolio (and possibly selling a portion at deflated levels) so that you have expected expenses needed in the next 5 years in something safe like money market funds or FDIC insured CDs. If retirement is more than 5 years out, I wouldn't make huge changes, but work with your advisor on making some minor changes in your overall allocations, to reflect a more conservative risk tolerance.
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Andrew(Q) All of these "Credit Counseling" firms say that the programs they use are ones "the credit card companies don't want you to know about"...isn't that a fabrication? Couldn't we do just as well by calling the credit card companies ourselves to negotiate settlement of an account?
Kevin_Taylor(A) When talking to a "credit counseling" firm, please look at least a couple of things. How are the compensated. How do they allocate the consolidated payment you send in. No matter how you go about counseling, please know that your credit score can be adversely affected. Also keep in mind that your credit score isn't as important as getting of debt. May I suggest that you start with Consumer Credit Counseling Services in addition to the other firms you're considering?
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shelly70rn(Q) I have several (10 or so) department store credit cards that I do not use, what should I do with them? Can I call and have the accounts closed or does that hurt your credit scores? Any advice?
Eric_Allee(A) If you have credit cards that are not being used, and you do not plan to use them, I would close them. You may take a temporary minor hito your credit, but getting rid of this availability will improve your score over the long run.
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redbearded_biker(Q) I am a high school teacher and have been plowing a LOT of my income into 403(b) and 457 plans. They have lost 30%!! Should I keep investing in these? I am almost 52 and plan on retiring in 10-15 years.
Eric_Allee(A) Yes, these last 12 months took a toll on your accounts. However with at least 10 years til retirement, my opinion is you can recover from this. Remember, if you are investing on a monthly basis, you are taking advantage of these deflated values right now.
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Sandyt67(Q) My mom is afraid her house is going to be foreclosed on...she has poor credit due to some decisions she made after my dad died...will it be hard for her to rent an apartment with these things showing on her credit report?
Kevin_Taylor(A) The key to being in a near foreclosure situation is to act today. The sooner you look at your choices, the more likely you'll have better choices. There are some apartment complexes that look at a credit score and history. May I suggest that you talk to rental agency, that gets paid from the renters who have apartments available, they can run a credit report and see how landlords might respond. If all else fails, seek out individuals who might have places for rent and are not overly concerned about a FICO score.
Mike(Q) My wife and I have regular IRAs showing losses. Can we convert to Roth IRA without paying tax or penalty?
Eric_Allee(A) For 2008 and 2009, you can convert if your income is under $100,000. You will pay tax on the converted balance, so doing it if the balance is down is the right move. In 2010, and 2011, that income limit is lifted, however with a new administration, that may not be true if the tax code is changed by then
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oliver1234(Q) Are you not going to be able to answer my question?
KCTV5(A) We have several questions that remain to be answered, and our financial experts are working as quickly as possible to answer them. Hopefully it won't be too long.
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redbearded_biker(Q) How much should I plow into those accounts? The last two years, I've been plowing the maximum ($20,000 each) into them. I own everything, no house payments, I drove old beat up cars and motorcycles. I seldom take vacations, either. Eric_Allee(A) Generally, fund your retirement accounts as much as you possibly can, while you can. make sure you do have some liquid assets outside of a retirement account for emergencies.....3 to 6 months of expenses kept in FDIC insured money market account or CD.
twolime(Q) Another question... my ARM just adjusted, and my rate went down a quarter point. Good news for me, but I wonder about how long it will last. What is the corelation between the Fed interest rate and the rate banks charge? Should I worry about the rate on my ARM in the next couple of years?
Frank_Lenk(A) It depends on what your ARM is tied to. If it is 10-year Treasuries, there is no direct correlation. But if if is tied to something that is a short-term rate, like the LIBOR, as the Fed lowers interest rates, you should see a decline too. But the Fed will start raising rates as soon as they think the economy is safe. This won't be for at least a year, but when they move, they may move quickly. So you should plan accordingly.
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jackie(Q) i rolled over my mutal funds to money market ..what is best to do to get better interest but not lose my principal...this is my only nest egg and i amturning 65 soon
Kevin_Taylor(A) I can't give specific investment buy/sell recommendations in this format, but I would like for you to understand a couple of important concepts facing seniors. If you are going to be using these assets to live off of, then you'll have to know that inflation can hurt the conservative investors the most. For example, if you find a "CD" that pays a fixed amount to you for the rest of life, then it would be like being on a job for 30 years that never gave you a raise. Please consider talking to an advisor who can talk to you about your risk tolerance and your personal income needs. All the best to you. Thank you,
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arthur(Q) why do i pay social security when i am on SS and will never get back any more that I pay?
Frank_Lenk(A) Social security is not a savings program. It is a transfer from current workers to current retirees. Today's retirees actually receive benefits far in excess of what they contributed during their working years, because the benefits are indexed to inflation. Social Security is in trouble because the number of retirees is about to increase significantly due to the aging of the post-WWII baby boom, but the number of workers will not increase proportionately because the baby-boomers didn't have as many kids as their parents.
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redbearded_biker(Q) How much cash in savings or certificates of deposit is "too much?"
Kevin_Taylor(A) I'll give you a couple of guidelines, but each person is different and has a comfort level that is all his own. If you have 6 months worth of living expenses then you're in the recommended "average" for many people. Please keep in mind too that if your income is erratic such as commissioned sales then one might consider having even more in the cash/CD category. All the best to you.
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toni(Q) We have a retirement IRA . We are thinking of liquidating part of it to pay of the balance on our home of 30,000.00 Should we do this or not?
Eric_Allee(A) Are you retired now? If so, this might not be a bad idea, depending on the interest rate on your remaining mortgage and the return you are getting from your IRA. If you are not retired and currently working, and your mortgage rate is a low rate, you can afford the monthly payment, I'm not sure I would sell out of the IRA at these low values to eliminate the mortgage.
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arthur(Q) Frank_Lenk: Social security is not a savings program. It is a transfer from current workers to current retirees. IF THAT IS TRUE, WHY is the contribution capped? Are those over the limit considered drones?
Frank_Lenk(A) I'm not sure why the contribution is capped. One proposal is to uncap it, so that the wealthiest wage earners pay the same proportion of their income that minimum wage people do, instead of less. Whether you think that is a good idea or not depends on your political persuasion, but I think most people view this as unfair.
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michelle_thomas(Q) I have not seen any responses for awhile did you get my question>?
KCTV5(A) We do have several questions still waiting to be answered. It may be a few more minutes before they get to yours, but I promise, we're working on them.
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Mojo(Q) my question got enterend accidently part way thru and then I ebtered the rest ---do I need to reenter the question KCTV5(A) Please do.
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imrj8853(Q) I am invested in AMerican Growth Funds, American Funds Euro Pacific, MFS Value fund and Delaware Duration Bond Funds. These are all non qualifying money. If I sell and move to CD or Money market is the hit for taxes going to be capital gains or losses? If not what would the tax hit consist of.
Eric_Allee(A) That depends, are the values below or above what you paid for them, including capital gain reinvestments? (this is called your basis) If you paid less than they are worth when sold, then you would have capital gains. If held for more than 1 year, the gain would be considered long term, taxed at a maximum 15% federal tax rate.
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Sheryl(Q) We have retirement investments in Allianz, is this company making money and are they stable? We can not withdraw any until we are 70 1/2.
Kevin_Taylor(A) There will be at least a couple of things you'll want to find out about your money and about your own comfort level. If your investment is a variable annuity then your assets are not an asset of the insurance company; if your investment is a fixed annuity then it is an asset of the insurance company. Heaven forbid, if the insurance company should go out of business, there are certain levels of guarantees and assurances. Please call your insurance company and ask the very question that you asked me. Please also consider talking to an independent and trusted advisor to help to with your situation. Thank you,
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Sally(Q) My husband works for Ford. Don't know if they'll stay open. Should we stop paying extra principal on our mortgage or should we start paying ahead?
Frank_Lenk(A) I can't answer the last part of your questions - the other financial advisors will have to help you there. But I can tell you that Ford has reinvested heavily in the Claycomo plant, and that the workers there are among their most productive. This bodes well for the future of its KC operations.
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sueshe(Q) All of my retirement is in my 401k, which like many others has lost a great deal this year. Would it be advisable to redirect my future contributions to an IRA or some other instrument?
Eric_Allee(A) You may have more investment choices in an IRA versus your 401k, but the tax benefits are almost identical. What matters, is the individual investments within the 401k......you need to look at your investment choices and decide if a more conservative balance would fit your risk tolerance better.
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mrs_md(Q) I'm getting kind of worried that my questions have not been received....Please let me know...mrs md
KCTV5(A) Your questions have been received and forwarded to the financial experts. They have several questions waiting, but they should get to your questions soon.
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In_Debt_in_KC(Q) We have managed to accumulate about $20k in credit card debt.
KCTV5(A) Could you please submit your question again in one single entry?
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redbearded_biker(Q) How much cash in savings or certificates of deposit is "too much?"
Eric_Allee(A) Are you married, bith spouses work? A rule of thumb might be 3 months of expenses to cover emergencies or one spouse losing their job. Only one spouse working? 6 months of expenses. These are rules of thumb for the average family with more than 5 years until retirement. Soon to be retirees or those currently in retirement should have 5 years of expenses on cash or cash equivalents.
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Susan(Q) Since the markets have been dropping so low, I have been considering taking advantage of the low stock prices & purchasing $1,000 in stocks thru an online service, and selling those stocks when the markets rise a 1000 pts or so... then taking the money earned from selling those stocks and reinvesting when the market takes another dive. Is this a way to make some quick cash or not? Would a person be able to make a substancial amount or not?
Kevin_Taylor(A) Keep in mind that with single stock purchases that you can make a killing or get killed. Be careful and understand that this money has to be "risk" capital, that is money that you can stand to part with. However, it is great to see you're looking at the value of buying low. All the best to you. Thank you,
bob_b(Q) I HAVE SENT MY QUESTION IN BUT THE COMPUTER FROZE UP AND HAD TO LOG OFF, WILL I SEE THE ADVISOR,S ANSWER?
KCTV5(A) Go ahead and submit your question again if you don't mind.
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cathy(Q) I am paying child support to my e/husband and i am struggling month to month can i get that reduced??
KCTV5(A) I would suggest you consult a lawyer.
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Beverly(Q) I am to inherit 250,000 in November and want to know the best way to protect it. I would like to live off of interest and not the principle.
Eric_Allee(A) A rule of thumb most advisors use is to not draw more than 4% of the original investment, if you are trying to retain the principle. This would provide you $10,000 the first year. Hopefully this allows the principle to grow so that it at least keeps pace with inflation, allowing you slightly higher distributions every year.
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kay(Q) I am married with 3 kids with the oldest going to college next year. We are truely debt free (no mortgage, car payments or credit) Where should we put our monthly savings for the short term to help with college costs
Kevin_Taylor(A) With money that has to be used for an event that is not that far away in time then you're looking at trying to preserve what you have rather than trying to make a "bunch" of money. Many people use a combination of CD's and money markets with CD's coming due as each need comes up. Please talking to an advisor who can look at your personal situation. Great job on living debt free!!
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teresearichardson(Q) Hello is any one going to answer my question?
KCTV5(A) The financial experts are working as quickly as possible, but it may be a few more minutes before they get to your question.
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John(Q) If we the people go out and spend more of our money will the economy be better?
Frank_Lenk(A) It is certainly true that if everyone pulls back on their spending, not just here but throughout the nation, then this will lead to an even worse recession. However, I don't think it is the job of individuals to overspend, and so go deeper into debt, to get the economy going again. It is the job of policy-makers, especially those at the Federal level, to create a new stimulus package that has a longer-term orientation than the last one. This means focusing it on increasing public investments in things like infrastructure and research. Not only does this inject cash into the economy, raising incomes, it does so in ways that produce a long-term return in terms of higher long-run economic growth prospects. Most importantly, public investment helps create an environment where private investment is more likely to be successful, giving private firms the confidence to carry forward their own invstment plans.
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christyebert(Q) I am just wondering if my question has been received, I have been waiting over 30 min
KCTV5(A) We do have several questions waiting to be answered. Sorry for the delay. The financial experts are answering them as quickly as possible.
angelene(Q) I am a retired 69 year old female. House is paid for and I have a fed annuity coming in.My question is: I run about $500 short each month..and have an active home equity loan but wonder if I would be better with a reverse mortgage.
Kevin_Taylor(A) The important thing to remember is to get full disclosure about a reverse mortgage and how they work for you. It is quite possible that you'll have to have your equity line of credit paid off before even getting a reverse mortgage. There is information from HUD that might get you started on learning more about reverse mortgages. Thank you,
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Kyle(Q) I'm about to graduate college and have a few thousand dollars I would like to invest. An immediate return is not necessary. With the stock market so low it seems like a great time to buy stocks. What stocks would be a good investment right now? Or is there a better way to invest my money?
Eric_Allee(A) At your age, this is the perfect time to get into the market. I would recommend a broad diversified portfolio of stock mutual funds, trying to add to it on a consistent basis (monthly)....this is called dollar cost averaging. A little large cap, mid cap, small cap and foreign equity exposure is the diversification you need in your 20s.
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Elaine(Q) This is a wonderful public service. Could this be done on a weekly basis every Thursday or another day?
KCTV5(A) I'll make that suggestion to the KCTV5 news managers.
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Daniel_J(Q) I have a 403 B tax deferred annuity with AIG and want to know if it is safe if AIG goes bankrupt. It was not originally an AIG acount or a 403 B. Originally it was just called a tax deferred annuity with Valic.
Kevin_Taylor(A) If your asset is a variable annuity, then it is not a direct asset of the insurance company. If it is a fixed annuity, then it is a direct asset of the insurance company. Keep in mind that many insurance companies have re-insurance and assurances that in the case of their demise. Please call the insurance company the holds your tax sheltered annuity and ask the same question you asked me. Also talk to the advisor who oversees your account. All the best to you. Thank you,
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Selene(Q) Could we have a way to be contacted when our question is answered so we don't have to stay online so long?
KCTV5(A) Unfortunately, I don't have a way to do that, but we'll post a transcript of the chat tomorrow, so you could come back to the same page on the Web site tomorrow afternoon and look for the answer then.
GG(Q) I asked my question awhile back and have not seen the answer to it yet.
KCTV5(A) We do have several questions waiting to be answered. We will post a chat transcript here tomorrow afternoon if you can't wait online for your question to be answered.
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Cape_Investments(Q) I did not see the answer for Cape Investments. Did you post it?
KCTV5(A) Your question may still be waiting to be answered. If you can't wait online, we'll post a transcript of the chat online on the same page by tomorrow afternoon.
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tom(Q) i am 65 need avise as to which would be less likely to lose,but get some inflation interest the mutal fund ,municipal bonds, cd's or money markets.
Eric_Allee(A) CDs & Money Market accounts are truly safe, unfortunately they do not keep pace with inflation. These are really only good for short term cash needs....emergency funds, saving for large purchases, etc. I assume at your age, you are retired or close to retirement. These accounts should be where your money is for expected expenses you will incur in the next 5 years. As far as the rest of your portfolio, you need to have at least some exposure to equities....there is more risk of short term loss, but over the long run these offer you the most chance of growth. remember, a typical retirement could last 20 to 30 years, so you do have time to recoup losses like we are experencing now. The critical component is having the 5 years in safe vehicles....this allows you to ride out bear markets without having to sell at undervaluations.
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out_of_time(Q) what time will the trascript be on line ?
KCTV5(A) We plan to post the transcript online on the same page by noon.
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Ranger_D(Q) Hello would now be a good time to buy a new (08) car? We both have good dependable jobs and all bills are paid. I put money back for our retirment and have since 1996. I ask because my wife needs one and I'm afraid we may get to a point where finance companys will not lend.
Frank_Lenk(A) While it is true that most finance companies have increased their requirements for a loan, money should be available. You might have to wait for the credit crisis to ease a bit more to get the best deal on financing, however. I'm sure there are lots of discounts available now due to weak sales. But car sales are likely to be weak for a time yet, while credit conditions should loosen up over the next few months.
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jenjen(Q) I wanted to know should I move move portfolio mix from Moderately Aggressive to Moderate. I am 32 years old. Thank you.
Eric_Allee(A) Question.....do you lose sleep at night? If so, then you may have a risk tolerance that is more moderate versus moderate aggressive. My opinion, at your age, you can afford to be on the more aggressive side with your retirement portfolio.....you are looking at another 30 years till this money is needed, so that is plenty of time to ride out this bear market and others that we will experience again sometime during the next 30 years.
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In_Debt_in_KC(Q) We have managed to accumulate about $20k in credit card debt. I know we need to stop using these cards immediately, but I'm not sure how to go about getting them paid off. We don't have a lot of expendable income (obviously, that's how we got into this mess), but we do have several different retirement accounts and over $100k equity in our home I'm wondering if we should just try to pay these cards down on our own even if takes a lot of time and we pay a lot of interest along the way or if we should consider a loan (home equity?) or even withdraw some of our retirement funds, even if it means paying penalties. I am in my late 30's and work part-time, my husband is in his early 40's and works full-time. I've considered another part-time job, but just don't know if I can manage it with everything else (kids, house, etc.).
Kevin_Taylor(A) Although this is a big problem to solve in a format like this, I'd like to offer a couple of suggestions: 1. Take a look a look at every dollar you spend to figure out where it is going; this exercise can be depressing and illuminating at the same time 2. If you've figured out that every month you have more bills than money (& it gets worse each month), then a big family change may be needed. May I suggest the "Total Money Makeover" book by Dave Ramsey. Please also consider talking to a debt counseler such as Consumer Credit Counseling. All the best. Thank you,
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redbearded_biker(Q) What is meant by "large cap," "mid cap," etc.?
Frank_Lenk(A) This is refers to the capitalization of companies, which is basically the market value of the company as measured by the value of a share of their stock times the number of outstanding shares. As you probably guessed, "large cap" refers to the largest firms in the market, such as those that compose the S&P 500. "mid-cap" refers to middle-sized companies. I have to confess, however, that I don't know exactly what the dividing line is between a small "large cap" company and a large "mid-cap" company.
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Renee(Q) I owe the IRS over $40,000 thousand dollars. I have been making timely monthly payments until about 2 months ago. Because of some health issues and lack of overtime opportunities at work at this time, I am unable to make the payments per installment agreement. I was told that if they were over 3 years old, I could do a bankrupty and have them discharged. If that is not an option, then what do I do?. Penalty and interest is eating me up, and I am scared I will not be able to ever pay them off.
Eric_Allee(A) You should contact a CPA or tax attorney who deal with IRS issues. Tell them you are interested in an Offer in Compromise. This is an appeal to the IRS to reduce the balance owed, based on your current assets and income level. It does take some time and the fees do add up, but it may be worth it to wipe out a portion of the amount owed.
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Steve56(Q) I want to know if because I started late in 401k , 5yrs ago , I wanted to retire in 15 yrs. Bebause of whats going on now will it be too late to recover and still make plans for 15yrs or is it not enough time
Eric_Allee(A) Its never too late, you just may have to work harder at it versus someone in their 20s. The worst thing you can do is to do nothing, thinking it is hopeless. Work with a planner to help get you back on track.
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Tiffany(Q) Currently we are not behind on an payments, but it seems as if we will get to that point in next few months. We are considering credit counceling as an alternative to bankruptcy. We have a high amount of unsecured debt in which we are having trouble paying down. Would the credit counceling be an affective alternative to bankruptcy?
Kevin_Taylor(A) Credit counseling can be a start to help you get the skills and resources to start knocking down your debt. Please keep in mind that there many organizations the call themselves credit counseling companies. May I suggest that you include Consumer Credit Counseling Services as one of the organizations you consider. Of course you can do this on your own if you'd like. A book that might help you get started is "Total Money Makeover". All the best to you. Thank you,
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Susan_H(Q) I have several thousand dollars in a money market account. I have a charge card with a bit less debt. I don't know if I should pay off the charge card with this money, then pay back the money market with the payments I would have made to the card. What is the better solution?
Eric_Allee(A) Pay off the card unless it has a 0% or very low interest rate (less than 5%)
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asset(Q) well DOW at 8979 !! what is a general asset allocation of stocks, bonds, and cash both for a 401K (Max contributions) and personal money? I have or had a 12 year horizon before I need the retirement money.
Eric_Allee(A) Depends on your risk tolerance.....I would think 40-50% stocks, 50-60% bonds would be appropriate. When retirement get within 5 years, start moving into cash or cash equivalents to cover expenses expected within 5 years.
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GG(Q) We are retired and are living off the income that we have intrusted with a investor. We are afraid that we may loose it all with the way the stock market is going. It is all we have and not all that much. Should we take five years of income out and put it in a CD so we won't atleast loose that or should we just take it all out until this crises is over or just get out of single stocks? We are afraid of running out of money before it tunes around.
Kevin_Taylor(A) Taking out a certain number years worth of income is a method that some investors use and some advisors suggest. It is very important that you get a clear understanding of how the math works for you while using this strategy. Your other assets might have to "work" harder, but at least you'll have some added cushion of time to help you. If you have confidence in your advisor, please talk to him/her and walk through a financial plan that might provide you with investment income projections. All the best to you, Thank you.
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Bill(Q) I'm 54. Should I do anything with my 401 or ride it out?
KCTV5(A) The financial experts say: If you have an event that's more than 5 years away and lasts more than 5 years -- such as retirement -- history has shown us that staying the course pays off.
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bitsy(Q) Should i have anything in the stock market
KCTV5(A) The financial experts say: If you have an event that's more than 5 years away and lasts more than 5 years -- such as retirement -- history has shown us that staying the course pays off.
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suzyk(Q) we use a cashback rewards creditcard for everything we buy and pay it off every month, is that still a good idea or does it have a negative effect on our credit
Eric_Allee(A) If you have the discipline to pay it off every month, then definately take advantage of the rewards offered. Credit cards are not "evil" like some radio hosts would tell you. Used responsibly, they are merely a tool. Continuously paying your credit card off every month actually helps your credit score.
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christyebert(Q) Could you let me know if my question was received??
KCTV5(A) Unfortunately, I can't tell you whether it was received, but I have no rejected any questions. The financial experts are answering the questions as quickly as possible. We will post a transcript of the chat on the same page on the Web site by noon tomorrow, so if you can't stay online, you can check that transcript tomorrow afternoon.
michelle_thomas(Q) I am just curious I asked my question at 4 when this began I understand their are many questions. Just thought they were being answered according to when they came in.
KCTV5(A) They are. Could you please submit your question again. It may have been inadvertantly overlooked.
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Brown(Q) Brown: I asked this question but did not get a response. I am 65 years old and retired. I have about $10,000 in S&P and am wondering if I should get out before it is all gone.
KCTV5(A) The financial experts are answering the questions as quickly as possible. If you can't stay online to wait for answer, we'll post the entire chat transcript on the Web site before noon tomorrow. It'll be on the same page.
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kathy(Q) I have money save in a TSP and H&R Block Express IRA. I am strapped for cash and need at least $2,000 out of one of these account. Would you recommend me withdrawing funds from either one of those account? If I do, is there a penalty? I do not plan on retiring until another 8 years from the federal government.
Kevin_Taylor(A) Mathematically, taking money prematurely from an IRA can be one of the worst places to get it. However, in worst of times very tough decisions must be made. If taking money from an IRA before age 59 1/2, a person could have a penalty of 10%, federal income tax (20%ish), and state income tax. Please consult a tax advisor who knows all of your details and good luck.
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teresearichardson(Q) Can anyone help me?
KCTV5(A) Sure. Are you waiting for your question to be answered?
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cjp(Q) everyone is saying that it is a good time to invest in the stock market. I would like to but don't know where to start. Who do I see to start investing?
KCTV5(A) The financial experts recommend seeking the help of a professional financial adviser.
Emely7714(Q) Hello, I have some farm land in Iowa that was an inheritance- I am wondering if now would be a good time to sell. Eric_Allee(A) I'm sorry, but I am not familliar with undeveloped land values in Iowa. What is it worth now. Is it in a rural area or suburban? Is there the possibility that this land may be developed....maybe you might be offered a decent price down the road. I would recommend that you discuss these issues with a local real estate professional that specializes in this type of real estate.
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Sammy(Q) I just saw "Sammy", but no answer. It says standard user, idle for 00:5721??? Did I do something wrong?
KCTV5(A) I don't believe so. The financial experts are answering questions as quickly as possible. If you can't stay online to see your answer, you can read the transcript of the chat on the same page on the Web site before noon tomorrow.
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teresearichardson(Q) Does it cost to talk to those type of people?
KCTV5(A) It may. I'd call around and speak to several people before making a decision about who to see and how to invest your money.
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cjp(Q) do you have any recommendations for a financial advisor? Do they all charge a fee?
KCTV5(A) Yes. In different ways. You'd need to check with each individual adviser.
gladstone_voter(Q) I am planning on returning back to work with my former employer. If I do so, and Obama is elected, this will put me and my husband in the elusive 5% income bracket that Obama wants to increase taxes on. Would it be more realistic for me to stay home, miss the 5% increase taxable amount? My income would be roughly $50,000. This increased income would definitely put us over $250,000. Our debt is not great. We almost have the house paid off, my car is paid and total credit card debit is $3,000. In the meantime, due to the industry I worked in, my stock has dropped over 50%. Our combined savings has gone from $500,000+ to $300,000. I know we are better off than most people but we have scarificed and worked darn hard. Should I work or not?? I am afraid if I do work I will just be "giving it away".
Frank_Lenk(A) My understanding is that Obama would raise the tax rate on the top bracket from 35 to 39 percent, so instead of paying 35 percent on $50,000, or $17,500, you would be paying 39 percent, or $19,500. So you are "giving away" an extra $2,000 under Obama's plan. But you still have $30,500 more than you did if you didn't work. Whether this after-tax reward is worth the work you would have to do to earn it is, of course, something only you can decide.
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bubba123(Q) What should i do with my 401k ? I am 62 and looking to retire soon ! (hopefully) Should I keep my money in the market or should I pull it all out?
Kevin_Taylor(A) Bubba, Please consider a couple of things that investors in your situation might be facing: Longevity, if you live the average life expectancy, this money might need to last 30 years. And if that money is only invested in things that don't historically beat inflation it could spell a new kind of trouble...imagine having a job that doesn't provide you a raise for thirty years. That is what having all fixed income investments might do for you. Therefore many investors have done a combo of growth and income investments to last them over the years. Please consider spending time with a trusted adivsor who can do detailed financial plan and risk profile. All the best to you. Thanks,
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timnjen(Q) how do i get the questions and answers already asked?
KCTV5(A) Look back at the page where you originally logged in and you can read them. Also, we'll post a transcript of the entire chat on this same page on the Web site by noon tomorrow.
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mizzoukid(Q) Is there any log or anything that shows all of the questions submitted tonight and the experts answers? I thought that would be really neat--no big deal if not...
KCTV5(A) We will post a transcript of the entire chat online on this same page on the Web site by noon tomorrow.
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bea(Q) if i take out a reverse mortagage do i still own my home?
Frank_Lenk(A) Not an expert on this, but a quick Internet search says yes, you still own your home, and so you are still responsible for maintenance and such.
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KCTV5(P) It’s 6:30 p.m., so our financial experts can no longer accept questions. If you’ve not yet received an answer, you may still. Unfortunately, due to time constraints, the financial experts may not be able to answer every question. They received more than 200, but it’s possible that an answer to a similar question may help you. A full transcript of the chat will be posted on the same page of the Web site online by noon tomorrow.
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Jwakefield(Q) I'm behind on my mortgage by 3 or 4 months. Never late on any other bills I don't have a salary job-- commissionion only. should i file bk or let the house foreclose
Kevin_Taylor(A) This is a good time to do the math. Take a look at the low end of the monthly average of the commission you make and start considering that the new monthly budget you'll be surviving on. If this average is substantially lower than what your usual monthly expenses are then you might consider getting out of that house soon (sale, short sale, foreclosure). If you're also deeply in debt in other areas, you might want to talk to someone such as Consumer Credit Counseling Services. Obviously, this is a very important time in your life and I understand that this format can only just scratch the surface of your personal situation. Take care
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Soapnut63(Q) I have a question,I just paid off my credit cards,& I have been debt-free,& I feel great,but I'm contemplating whether I should apply for just one credit card for emergencies only,what do you think?I have been paying my bills on time,if not early,& I just need to know if it's a good idea or not.
Kevin_Taylor(A) Credit usage is a personal choice, but please consider looking at building an emergency fund equal to about 3 to 6 months worth of living expenses. However, this may take you a while to get to that level. Some people temporarily cut their expenses so they get this balance built faster and then go back to their regular budget. Please be careful if you're looking to start new credit. I hope this helps.
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8558(Q) I am 65 retired living on Pension and SS. I have an ARM that is coming due in '09. Would it be smarter to try to sell or hold out to refinance?
Frank_Lenk(A) I would contact your lender to find out what it will reset to, if it were to reset today. It depends on what the ARM is tied to. In my earlier answer, I suggested many ARMs might be tied to the LIBOR, and historically it has fallen as the Fed lowers interest rates, which the Fed is currently doing. However, somehow I forgot that currently, the LIBOR is at historic highs, so even if it comes down, it has a way to go before it reaches "normal" levels. Also, before you sell, note that housing prices may still be falling, so I would also talk to a realtor who knows at what price houses are actually selling at today. Then you can better evaluate what your house would likely fetch in today's market. Once you have this information, you will be able to make a better decision.
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The following is a transcript of the chat.
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heartland(Q) Credit card debt with high interest rate. Is it better to do a transfer to a card with a lower interest rate ... a 0% for 12 months then a lower interest rate or would it be better to do a debt consolidation for the credit card debt?
Kevin_Taylor(A) I would caution anyone wanting to eliminate debt by moving debt. In other words, please keep in mind that the most important thing you could do is work on making more than the minimum payment per month. As for transfering the balance, please consider the rate after your first 12 months, the "alternate" rate they may charge if you are late or your credit score changes.
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heartland(Q) Credit card debt with high interest rate. Is it better to do a transfer to a card with a lower interest rate ... a 0% for 12 months then a lower interest rate or would it be better to do a debt consolidation for the credit card debt?
Eric_Allee(A) In short..yes, it is good get a low interest rate on credit card balances. You should watch out for fees on the tranfer...3%-5% of the balance is typically charged on the transfer. 2 things to watch out for: 1) excessive balance transfers do hurt your credit score slightly 2) be extra careful to not run up the balance again on the credit card paid off Good luck!
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babyem2008(Q) how can u tell if u r spending too much money for car insurance
Eric_Allee(A) make sure you shop around at least every few years. if you do find a lower rate and are thinking about switching, ask your agent what the first year discount is so that you have some idea what it might jump up to the second year.
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phillip(Q) I have up to $10k to invest. I am considering investing $5000 in GE. My second choice at this point is Garmin. Would you consider these to be wise investments?
Kevin_Taylor(A) Although I cannot make specific buy/sell recommendations on stocks, may I make a couple of suggestions? First, when buying a single stock, you can make a killing or get killed. Even with the relatively cheap values in the market, please make sure that you afford the loss. Talk to an advisor if you need someone to help throw ideas off of. There are even discount options that you might find if what you're looking for is occasional advice. All the best to you. Thanks
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imrj8853(Q) My investments are invested as follows 52% bonds and 46% stocks. They are big/blue cap stocks. But I concerned because I am currently retired and don't think I have 20-30 years to wait for the stock to return. If it doesn't fall much more than it is now I can still be comfortable.
Eric_Allee(A) I don't think it will take 20-30 years for this market to recover, however you should be prepared that it will take some time. I like to see retirees with at least 5 years of expected expenses in safe ivestment vehicles, like Money Market funds or CDs. The other prortion of your portfolio is not that out of line with your current allocations, as long as you have that 5 years in safe investments.
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phillip(Q) Another question I have is in regards to my children's 529 plans for college. I put $500 a month in my older son's, and have not gotten around to setting one up yet for my younger son. I have lost approximately $1000 with my oldest's. Would you advise stopping or minimizing the amount I am putting in to the plan, and would you advise holding off on opening a plan for my younger son at this point?
Eric_Allee(A) If you are choose your own investments, you might consider a more conservative allocation, depending on how close your older son is to graduation. I would not recommend backing off on your saving plan.
Linda(Q) Hello! My question concerns my son's Learning Quest 529 plan. He is a senior in highschool and I have the investment going to "conservative" but there is a "very conservative" I can also choose. It is now, after the crash(es) lower than I have originally invested. Your ideas!?!? =)
Kevin_Taylor(A) If you have an event that is a short time away as you have, please don't worry too much about trying to beat the market or "making" a bunch of money. Now might be a time to think about making sure that you keep your money.
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heartland2(Q) I am not seeing any of the responses. Is there something I need to do? I originally signed in as Heartland and sent a question then got a message that I was disconnected. I would like to see the response to my question.
KCTV5(A) All of the questions are listed on the same page of the Web site where you logged in. Also, if you don't see your answer, we will post a copy of the transcript on that same page tomorrow morning.
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Patti_R.(Q) I am 56 years old. Do I leave everything alone and "ride out" this storm....I'm in a very diversified plan. Also is now a good time to refinance a home for a person my age....I have a 30 yr. mortgage with 21 years left to pay and would like to get a 15 yr. mortgage....I'm currently at 7%. Thank you for your help. Patti R.
Eric_Allee(A) Are you within 5 years of retirement? If so, you may need to make some hard decisions about reallocating your portfolio (and possibly selling a portion at deflated levels) so that you have expected expenses needed in the next 5 years in something safe like money market funds or FDIC insured CDs. If retirement is more than 5 years out, I wouldn't make huge changes, but work with your advisor on making some minor changes in your overall allocations, to reflect a more conservative risk tolerance.
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Andrew(Q) All of these "Credit Counseling" firms say that the programs they use are ones "the credit card companies don't want you to know about"...isn't that a fabrication? Couldn't we do just as well by calling the credit card companies ourselves to negotiate settlement of an account?
Kevin_Taylor(A) When talking to a "credit counseling" firm, please look at least a couple of things. How are the compensated. How do they allocate the consolidated payment you send in. No matter how you go about counseling, please know that your credit score can be adversely affected. Also keep in mind that your credit score isn't as important as getting of debt. May I suggest that you start with Consumer Credit Counseling Services in addition to the other firms you're considering?
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shelly70rn(Q) I have several (10 or so) department store credit cards that I do not use, what should I do with them? Can I call and have the accounts closed or does that hurt your credit scores? Any advice?
Eric_Allee(A) If you have credit cards that are not being used, and you do not plan to use them, I would close them. You may take a temporary minor hito your credit, but getting rid of this availability will improve your score over the long run.
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redbearded_biker(Q) I am a high school teacher and have been plowing a LOT of my income into 403(b) and 457 plans. They have lost 30%!! Should I keep investing in these? I am almost 52 and plan on retiring in 10-15 years.
Eric_Allee(A) Yes, these last 12 months took a toll on your accounts. However with at least 10 years til retirement, my opinion is you can recover from this. Remember, if you are investing on a monthly basis, you are taking advantage of these deflated values right now.
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Sandyt67(Q) My mom is afraid her house is going to be foreclosed on...she has poor credit due to some decisions she made after my dad died...will it be hard for her to rent an apartment with these things showing on her credit report?
Kevin_Taylor(A) The key to being in a near foreclosure situation is to act today. The sooner you look at your choices, the more likely you'll have better choices. There are some apartment complexes that look at a credit score and history. May I suggest that you talk to rental agency, that gets paid from the renters who have apartments available, they can run a credit report and see how landlords might respond. If all else fails, seek out individuals who might have places for rent and are not overly concerned about a FICO score.
Mike(Q) My wife and I have regular IRAs showing losses. Can we convert to Roth IRA without paying tax or penalty?
Eric_Allee(A) For 2008 and 2009, you can convert if your income is under $100,000. You will pay tax on the converted balance, so doing it if the balance is down is the right move. In 2010, and 2011, that income limit is lifted, however with a new administration, that may not be true if the tax code is changed by then
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oliver1234(Q) Are you not going to be able to answer my question?
KCTV5(A) We have several questions that remain to be answered, and our financial experts are working as quickly as possible to answer them. Hopefully it won't be too long.
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redbearded_biker(Q) How much should I plow into those accounts? The last two years, I've been plowing the maximum ($20,000 each) into them. I own everything, no house payments, I drove old beat up cars and motorcycles. I seldom take vacations, either. Eric_Allee(A) Generally, fund your retirement accounts as much as you possibly can, while you can. make sure you do have some liquid assets outside of a retirement account for emergencies.....3 to 6 months of expenses kept in FDIC insured money market account or CD.
twolime(Q) Another question... my ARM just adjusted, and my rate went down a quarter point. Good news for me, but I wonder about how long it will last. What is the corelation between the Fed interest rate and the rate banks charge? Should I worry about the rate on my ARM in the next couple of years?
Frank_Lenk(A) It depends on what your ARM is tied to. If it is 10-year Treasuries, there is no direct correlation. But if if is tied to something that is a short-term rate, like the LIBOR, as the Fed lowers interest rates, you should see a decline too. But the Fed will start raising rates as soon as they think the economy is safe. This won't be for at least a year, but when they move, they may move quickly. So you should plan accordingly.
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jackie(Q) i rolled over my mutal funds to money market ..what is best to do to get better interest but not lose my principal...this is my only nest egg and i amturning 65 soon
Kevin_Taylor(A) I can't give specific investment buy/sell recommendations in this format, but I would like for you to understand a couple of important concepts facing seniors. If you are going to be using these assets to live off of, then you'll have to know that inflation can hurt the conservative investors the most. For example, if you find a "CD" that pays a fixed amount to you for the rest of life, then it would be like being on a job for 30 years that never gave you a raise. Please consider talking to an advisor who can talk to you about your risk tolerance and your personal income needs. All the best to you. Thank you,
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arthur(Q) why do i pay social security when i am on SS and will never get back any more that I pay?
Frank_Lenk(A) Social security is not a savings program. It is a transfer from current workers to current retirees. Today's retirees actually receive benefits far in excess of what they contributed during their working years, because the benefits are indexed to inflation. Social Security is in trouble because the number of retirees is about to increase significantly due to the aging of the post-WWII baby boom, but the number of workers will not increase proportionately because the baby-boomers didn't have as many kids as their parents.
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redbearded_biker(Q) How much cash in savings or certificates of deposit is "too much?"
Kevin_Taylor(A) I'll give you a couple of guidelines, but each person is different and has a comfort level that is all his own. If you have 6 months worth of living expenses then you're in the recommended "average" for many people. Please keep in mind too that if your income is erratic such as commissioned sales then one might consider having even more in the cash/CD category. All the best to you.
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toni(Q) We have a retirement IRA . We are thinking of liquidating part of it to pay of the balance on our home of 30,000.00 Should we do this or not?
Eric_Allee(A) Are you retired now? If so, this might not be a bad idea, depending on the interest rate on your remaining mortgage and the return you are getting from your IRA. If you are not retired and currently working, and your mortgage rate is a low rate, you can afford the monthly payment, I'm not sure I would sell out of the IRA at these low values to eliminate the mortgage.
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arthur(Q) Frank_Lenk: Social security is not a savings program. It is a transfer from current workers to current retirees. IF THAT IS TRUE, WHY is the contribution capped? Are those over the limit considered drones?
Frank_Lenk(A) I'm not sure why the contribution is capped. One proposal is to uncap it, so that the wealthiest wage earners pay the same proportion of their income that minimum wage people do, instead of less. Whether you think that is a good idea or not depends on your political persuasion, but I think most people view this as unfair.
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michelle_thomas(Q) I have not seen any responses for awhile did you get my question>?
KCTV5(A) We do have several questions still waiting to be answered. It may be a few more minutes before they get to yours, but I promise, we're working on them.
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Mojo(Q) my question got enterend accidently part way thru and then I ebtered the rest ---do I need to reenter the question KCTV5(A) Please do.
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imrj8853(Q) I am invested in AMerican Growth Funds, American Funds Euro Pacific, MFS Value fund and Delaware Duration Bond Funds. These are all non qualifying money. If I sell and move to CD or Money market is the hit for taxes going to be capital gains or losses? If not what would the tax hit consist of.
Eric_Allee(A) That depends, are the values below or above what you paid for them, including capital gain reinvestments? (this is called your basis) If you paid less than they are worth when sold, then you would have capital gains. If held for more than 1 year, the gain would be considered long term, taxed at a maximum 15% federal tax rate.
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Sheryl(Q) We have retirement investments in Allianz, is this company making money and are they stable? We can not withdraw any until we are 70 1/2.
Kevin_Taylor(A) There will be at least a couple of things you'll want to find out about your money and about your own comfort level. If your investment is a variable annuity then your assets are not an asset of the insurance company; if your investment is a fixed annuity then it is an asset of the insurance company. Heaven forbid, if the insurance company should go out of business, there are certain levels of guarantees and assurances. Please call your insurance company and ask the very question that you asked me. Please also consider talking to an independent and trusted advisor to help to with your situation. Thank you,
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Sally(Q) My husband works for Ford. Don't know if they'll stay open. Should we stop paying extra principal on our mortgage or should we start paying ahead?
Frank_Lenk(A) I can't answer the last part of your questions - the other financial advisors will have to help you there. But I can tell you that Ford has reinvested heavily in the Claycomo plant, and that the workers there are among their most productive. This bodes well for the future of its KC operations.
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sueshe(Q) All of my retirement is in my 401k, which like many others has lost a great deal this year. Would it be advisable to redirect my future contributions to an IRA or some other instrument?
Eric_Allee(A) You may have more investment choices in an IRA versus your 401k, but the tax benefits are almost identical. What matters, is the individual investments within the 401k......you need to look at your investment choices and decide if a more conservative balance would fit your risk tolerance better.
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mrs_md(Q) I'm getting kind of worried that my questions have not been received....Please let me know...mrs md
KCTV5(A) Your questions have been received and forwarded to the financial experts. They have several questions waiting, but they should get to your questions soon.
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In_Debt_in_KC(Q) We have managed to accumulate about $20k in credit card debt.
KCTV5(A) Could you please submit your question again in one single entry?
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redbearded_biker(Q) How much cash in savings or certificates of deposit is "too much?"
Eric_Allee(A) Are you married, bith spouses work? A rule of thumb might be 3 months of expenses to cover emergencies or one spouse losing their job. Only one spouse working? 6 months of expenses. These are rules of thumb for the average family with more than 5 years until retirement. Soon to be retirees or those currently in retirement should have 5 years of expenses on cash or cash equivalents.
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Susan(Q) Since the markets have been dropping so low, I have been considering taking advantage of the low stock prices & purchasing $1,000 in stocks thru an online service, and selling those stocks when the markets rise a 1000 pts or so... then taking the money earned from selling those stocks and reinvesting when the market takes another dive. Is this a way to make some quick cash or not? Would a person be able to make a substancial amount or not?
Kevin_Taylor(A) Keep in mind that with single stock purchases that you can make a killing or get killed. Be careful and understand that this money has to be "risk" capital, that is money that you can stand to part with. However, it is great to see you're looking at the value of buying low. All the best to you. Thank you,
bob_b(Q) I HAVE SENT MY QUESTION IN BUT THE COMPUTER FROZE UP AND HAD TO LOG OFF, WILL I SEE THE ADVISOR,S ANSWER?
KCTV5(A) Go ahead and submit your question again if you don't mind.
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cathy(Q) I am paying child support to my e/husband and i am struggling month to month can i get that reduced??
KCTV5(A) I would suggest you consult a lawyer.
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Beverly(Q) I am to inherit 250,000 in November and want to know the best way to protect it. I would like to live off of interest and not the principle.
Eric_Allee(A) A rule of thumb most advisors use is to not draw more than 4% of the original investment, if you are trying to retain the principle. This would provide you $10,000 the first year. Hopefully this allows the principle to grow so that it at least keeps pace with inflation, allowing you slightly higher distributions every year.
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kay(Q) I am married with 3 kids with the oldest going to college next year. We are truely debt free (no mortgage, car payments or credit) Where should we put our monthly savings for the short term to help with college costs
Kevin_Taylor(A) With money that has to be used for an event that is not that far away in time then you're looking at trying to preserve what you have rather than trying to make a "bunch" of money. Many people use a combination of CD's and money markets with CD's coming due as each need comes up. Please talking to an advisor who can look at your personal situation. Great job on living debt free!!
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teresearichardson(Q) Hello is any one going to answer my question?
KCTV5(A) The financial experts are working as quickly as possible, but it may be a few more minutes before they get to your question.
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John(Q) If we the people go out and spend more of our money will the economy be better?
Frank_Lenk(A) It is certainly true that if everyone pulls back on their spending, not just here but throughout the nation, then this will lead to an even worse recession. However, I don't think it is the job of individuals to overspend, and so go deeper into debt, to get the economy going again. It is the job of policy-makers, especially those at the Federal level, to create a new stimulus package that has a longer-term orientation than the last one. This means focusing it on increasing public investments in things like infrastructure and research. Not only does this inject cash into the economy, raising incomes, it does so in ways that produce a long-term return in terms of higher long-run economic growth prospects. Most importantly, public investment helps create an environment where private investment is more likely to be successful, giving private firms the confidence to carry forward their own invstment plans.
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christyebert(Q) I am just wondering if my question has been received, I have been waiting over 30 min
KCTV5(A) We do have several questions waiting to be answered. Sorry for the delay. The financial experts are answering them as quickly as possible.
angelene(Q) I am a retired 69 year old female. House is paid for and I have a fed annuity coming in.My question is: I run about $500 short each month..and have an active home equity loan but wonder if I would be better with a reverse mortgage.
Kevin_Taylor(A) The important thing to remember is to get full disclosure about a reverse mortgage and how they work for you. It is quite possible that you'll have to have your equity line of credit paid off before even getting a reverse mortgage. There is information from HUD that might get you started on learning more about reverse mortgages. Thank you,
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Kyle(Q) I'm about to graduate college and have a few thousand dollars I would like to invest. An immediate return is not necessary. With the stock market so low it seems like a great time to buy stocks. What stocks would be a good investment right now? Or is there a better way to invest my money?
Eric_Allee(A) At your age, this is the perfect time to get into the market. I would recommend a broad diversified portfolio of stock mutual funds, trying to add to it on a consistent basis (monthly)....this is called dollar cost averaging. A little large cap, mid cap, small cap and foreign equity exposure is the diversification you need in your 20s.
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Elaine(Q) This is a wonderful public service. Could this be done on a weekly basis every Thursday or another day?
KCTV5(A) I'll make that suggestion to the KCTV5 news managers.
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Daniel_J(Q) I have a 403 B tax deferred annuity with AIG and want to know if it is safe if AIG goes bankrupt. It was not originally an AIG acount or a 403 B. Originally it was just called a tax deferred annuity with Valic.
Kevin_Taylor(A) If your asset is a variable annuity, then it is not a direct asset of the insurance company. If it is a fixed annuity, then it is a direct asset of the insurance company. Keep in mind that many insurance companies have re-insurance and assurances that in the case of their demise. Please call the insurance company the holds your tax sheltered annuity and ask the same question you asked me. Also talk to the advisor who oversees your account. All the best to you. Thank you,
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Selene(Q) Could we have a way to be contacted when our question is answered so we don't have to stay online so long?
KCTV5(A) Unfortunately, I don't have a way to do that, but we'll post a transcript of the chat tomorrow, so you could come back to the same page on the Web site tomorrow afternoon and look for the answer then.
GG(Q) I asked my question awhile back and have not seen the answer to it yet.
KCTV5(A) We do have several questions waiting to be answered. We will post a chat transcript here tomorrow afternoon if you can't wait online for your question to be answered.
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Cape_Investments(Q) I did not see the answer for Cape Investments. Did you post it?
KCTV5(A) Your question may still be waiting to be answered. If you can't wait online, we'll post a transcript of the chat online on the same page by tomorrow afternoon.
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tom(Q) i am 65 need avise as to which would be less likely to lose,but get some inflation interest the mutal fund ,municipal bonds, cd's or money markets.
Eric_Allee(A) CDs & Money Market accounts are truly safe, unfortunately they do not keep pace with inflation. These are really only good for short term cash needs....emergency funds, saving for large purchases, etc. I assume at your age, you are retired or close to retirement. These accounts should be where your money is for expected expenses you will incur in the next 5 years. As far as the rest of your portfolio, you need to have at least some exposure to equities....there is more risk of short term loss, but over the long run these offer you the most chance of growth. remember, a typical retirement could last 20 to 30 years, so you do have time to recoup losses like we are experencing now. The critical component is having the 5 years in safe vehicles....this allows you to ride out bear markets without having to sell at undervaluations.
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out_of_time(Q) what time will the trascript be on line ?
KCTV5(A) We plan to post the transcript online on the same page by noon.
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Ranger_D(Q) Hello would now be a good time to buy a new (08) car? We both have good dependable jobs and all bills are paid. I put money back for our retirment and have since 1996. I ask because my wife needs one and I'm afraid we may get to a point where finance companys will not lend.
Frank_Lenk(A) While it is true that most finance companies have increased their requirements for a loan, money should be available. You might have to wait for the credit crisis to ease a bit more to get the best deal on financing, however. I'm sure there are lots of discounts available now due to weak sales. But car sales are likely to be weak for a time yet, while credit conditions should loosen up over the next few months.
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jenjen(Q) I wanted to know should I move move portfolio mix from Moderately Aggressive to Moderate. I am 32 years old. Thank you.
Eric_Allee(A) Question.....do you lose sleep at night? If so, then you may have a risk tolerance that is more moderate versus moderate aggressive. My opinion, at your age, you can afford to be on the more aggressive side with your retirement portfolio.....you are looking at another 30 years till this money is needed, so that is plenty of time to ride out this bear market and others that we will experience again sometime during the next 30 years.
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In_Debt_in_KC(Q) We have managed to accumulate about $20k in credit card debt. I know we need to stop using these cards immediately, but I'm not sure how to go about getting them paid off. We don't have a lot of expendable income (obviously, that's how we got into this mess), but we do have several different retirement accounts and over $100k equity in our home I'm wondering if we should just try to pay these cards down on our own even if takes a lot of time and we pay a lot of interest along the way or if we should consider a loan (home equity?) or even withdraw some of our retirement funds, even if it means paying penalties. I am in my late 30's and work part-time, my husband is in his early 40's and works full-time. I've considered another part-time job, but just don't know if I can manage it with everything else (kids, house, etc.).
Kevin_Taylor(A) Although this is a big problem to solve in a format like this, I'd like to offer a couple of suggestions: 1. Take a look a look at every dollar you spend to figure out where it is going; this exercise can be depressing and illuminating at the same time 2. If you've figured out that every month you have more bills than money (& it gets worse each month), then a big family change may be needed. May I suggest the "Total Money Makeover" book by Dave Ramsey. Please also consider talking to a debt counseler such as Consumer Credit Counseling. All the best. Thank you,
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redbearded_biker(Q) What is meant by "large cap," "mid cap," etc.?
Frank_Lenk(A) This is refers to the capitalization of companies, which is basically the market value of the company as measured by the value of a share of their stock times the number of outstanding shares. As you probably guessed, "large cap" refers to the largest firms in the market, such as those that compose the S&P 500. "mid-cap" refers to middle-sized companies. I have to confess, however, that I don't know exactly what the dividing line is between a small "large cap" company and a large "mid-cap" company.
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Renee(Q) I owe the IRS over $40,000 thousand dollars. I have been making timely monthly payments until about 2 months ago. Because of some health issues and lack of overtime opportunities at work at this time, I am unable to make the payments per installment agreement. I was told that if they were over 3 years old, I could do a bankrupty and have them discharged. If that is not an option, then what do I do?. Penalty and interest is eating me up, and I am scared I will not be able to ever pay them off.
Eric_Allee(A) You should contact a CPA or tax attorney who deal with IRS issues. Tell them you are interested in an Offer in Compromise. This is an appeal to the IRS to reduce the balance owed, based on your current assets and income level. It does take some time and the fees do add up, but it may be worth it to wipe out a portion of the amount owed.
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Steve56(Q) I want to know if because I started late in 401k , 5yrs ago , I wanted to retire in 15 yrs. Bebause of whats going on now will it be too late to recover and still make plans for 15yrs or is it not enough time
Eric_Allee(A) Its never too late, you just may have to work harder at it versus someone in their 20s. The worst thing you can do is to do nothing, thinking it is hopeless. Work with a planner to help get you back on track.
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Tiffany(Q) Currently we are not behind on an payments, but it seems as if we will get to that point in next few months. We are considering credit counceling as an alternative to bankruptcy. We have a high amount of unsecured debt in which we are having trouble paying down. Would the credit counceling be an affective alternative to bankruptcy?
Kevin_Taylor(A) Credit counseling can be a start to help you get the skills and resources to start knocking down your debt. Please keep in mind that there many organizations the call themselves credit counseling companies. May I suggest that you include Consumer Credit Counseling Services as one of the organizations you consider. Of course you can do this on your own if you'd like. A book that might help you get started is "Total Money Makeover". All the best to you. Thank you,
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Susan_H(Q) I have several thousand dollars in a money market account. I have a charge card with a bit less debt. I don't know if I should pay off the charge card with this money, then pay back the money market with the payments I would have made to the card. What is the better solution?
Eric_Allee(A) Pay off the card unless it has a 0% or very low interest rate (less than 5%)
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asset(Q) well DOW at 8979 !! what is a general asset allocation of stocks, bonds, and cash both for a 401K (Max contributions) and personal money? I have or had a 12 year horizon before I need the retirement money.
Eric_Allee(A) Depends on your risk tolerance.....I would think 40-50% stocks, 50-60% bonds would be appropriate. When retirement get within 5 years, start moving into cash or cash equivalents to cover expenses expected within 5 years.
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GG(Q) We are retired and are living off the income that we have intrusted with a investor. We are afraid that we may loose it all with the way the stock market is going. It is all we have and not all that much. Should we take five years of income out and put it in a CD so we won't atleast loose that or should we just take it all out until this crises is over or just get out of single stocks? We are afraid of running out of money before it tunes around.
Kevin_Taylor(A) Taking out a certain number years worth of income is a method that some investors use and some advisors suggest. It is very important that you get a clear understanding of how the math works for you while using this strategy. Your other assets might have to "work" harder, but at least you'll have some added cushion of time to help you. If you have confidence in your advisor, please talk to him/her and walk through a financial plan that might provide you with investment income projections. All the best to you, Thank you.
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Bill(Q) I'm 54. Should I do anything with my 401 or ride it out?
KCTV5(A) The financial experts say: If you have an event that's more than 5 years away and lasts more than 5 years -- such as retirement -- history has shown us that staying the course pays off.
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bitsy(Q) Should i have anything in the stock market
KCTV5(A) The financial experts say: If you have an event that's more than 5 years away and lasts more than 5 years -- such as retirement -- history has shown us that staying the course pays off.
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suzyk(Q) we use a cashback rewards creditcard for everything we buy and pay it off every month, is that still a good idea or does it have a negative effect on our credit
Eric_Allee(A) If you have the discipline to pay it off every month, then definately take advantage of the rewards offered. Credit cards are not "evil" like some radio hosts would tell you. Used responsibly, they are merely a tool. Continuously paying your credit card off every month actually helps your credit score.
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christyebert(Q) Could you let me know if my question was received??
KCTV5(A) Unfortunately, I can't tell you whether it was received, but I have no rejected any questions. The financial experts are answering the questions as quickly as possible. We will post a transcript of the chat on the same page on the Web site by noon tomorrow, so if you can't stay online, you can check that transcript tomorrow afternoon.
michelle_thomas(Q) I am just curious I asked my question at 4 when this began I understand their are many questions. Just thought they were being answered according to when they came in.
KCTV5(A) They are. Could you please submit your question again. It may have been inadvertantly overlooked.
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Brown(Q) Brown: I asked this question but did not get a response. I am 65 years old and retired. I have about $10,000 in S&P and am wondering if I should get out before it is all gone.
KCTV5(A) The financial experts are answering the questions as quickly as possible. If you can't stay online to wait for answer, we'll post the entire chat transcript on the Web site before noon tomorrow. It'll be on the same page.
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kathy(Q) I have money save in a TSP and H&R Block Express IRA. I am strapped for cash and need at least $2,000 out of one of these account. Would you recommend me withdrawing funds from either one of those account? If I do, is there a penalty? I do not plan on retiring until another 8 years from the federal government.
Kevin_Taylor(A) Mathematically, taking money prematurely from an IRA can be one of the worst places to get it. However, in worst of times very tough decisions must be made. If taking money from an IRA before age 59 1/2, a person could have a penalty of 10%, federal income tax (20%ish), and state income tax. Please consult a tax advisor who knows all of your details and good luck.
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teresearichardson(Q) Can anyone help me?
KCTV5(A) Sure. Are you waiting for your question to be answered?
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cjp(Q) everyone is saying that it is a good time to invest in the stock market. I would like to but don't know where to start. Who do I see to start investing?
KCTV5(A) The financial experts recommend seeking the help of a professional financial adviser.
Emely7714(Q) Hello, I have some farm land in Iowa that was an inheritance- I am wondering if now would be a good time to sell. Eric_Allee(A) I'm sorry, but I am not familliar with undeveloped land values in Iowa. What is it worth now. Is it in a rural area or suburban? Is there the possibility that this land may be developed....maybe you might be offered a decent price down the road. I would recommend that you discuss these issues with a local real estate professional that specializes in this type of real estate.
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Sammy(Q) I just saw "Sammy", but no answer. It says standard user, idle for 00:5721??? Did I do something wrong?
KCTV5(A) I don't believe so. The financial experts are answering questions as quickly as possible. If you can't stay online to see your answer, you can read the transcript of the chat on the same page on the Web site before noon tomorrow.
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teresearichardson(Q) Does it cost to talk to those type of people?
KCTV5(A) It may. I'd call around and speak to several people before making a decision about who to see and how to invest your money.
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cjp(Q) do you have any recommendations for a financial advisor? Do they all charge a fee?
KCTV5(A) Yes. In different ways. You'd need to check with each individual adviser.
gladstone_voter(Q) I am planning on returning back to work with my former employer. If I do so, and Obama is elected, this will put me and my husband in the elusive 5% income bracket that Obama wants to increase taxes on. Would it be more realistic for me to stay home, miss the 5% increase taxable amount? My income would be roughly $50,000. This increased income would definitely put us over $250,000. Our debt is not great. We almost have the house paid off, my car is paid and total credit card debit is $3,000. In the meantime, due to the industry I worked in, my stock has dropped over 50%. Our combined savings has gone from $500,000+ to $300,000. I know we are better off than most people but we have scarificed and worked darn hard. Should I work or not?? I am afraid if I do work I will just be "giving it away".
Frank_Lenk(A) My understanding is that Obama would raise the tax rate on the top bracket from 35 to 39 percent, so instead of paying 35 percent on $50,000, or $17,500, you would be paying 39 percent, or $19,500. So you are "giving away" an extra $2,000 under Obama's plan. But you still have $30,500 more than you did if you didn't work. Whether this after-tax reward is worth the work you would have to do to earn it is, of course, something only you can decide.
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bubba123(Q) What should i do with my 401k ? I am 62 and looking to retire soon ! (hopefully) Should I keep my money in the market or should I pull it all out?
Kevin_Taylor(A) Bubba, Please consider a couple of things that investors in your situation might be facing: Longevity, if you live the average life expectancy, this money might need to last 30 years. And if that money is only invested in things that don't historically beat inflation it could spell a new kind of trouble...imagine having a job that doesn't provide you a raise for thirty years. That is what having all fixed income investments might do for you. Therefore many investors have done a combo of growth and income investments to last them over the years. Please consider spending time with a trusted adivsor who can do detailed financial plan and risk profile. All the best to you. Thanks,
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timnjen(Q) how do i get the questions and answers already asked?
KCTV5(A) Look back at the page where you originally logged in and you can read them. Also, we'll post a transcript of the entire chat on this same page on the Web site by noon tomorrow.
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mizzoukid(Q) Is there any log or anything that shows all of the questions submitted tonight and the experts answers? I thought that would be really neat--no big deal if not...
KCTV5(A) We will post a transcript of the entire chat online on this same page on the Web site by noon tomorrow.
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bea(Q) if i take out a reverse mortagage do i still own my home?
Frank_Lenk(A) Not an expert on this, but a quick Internet search says yes, you still own your home, and so you are still responsible for maintenance and such.
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KCTV5(P) It’s 6:30 p.m., so our financial experts can no longer accept questions. If you’ve not yet received an answer, you may still. Unfortunately, due to time constraints, the financial experts may not be able to answer every question. They received more than 200, but it’s possible that an answer to a similar question may help you. A full transcript of the chat will be posted on the same page of the Web site online by noon tomorrow.
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Jwakefield(Q) I'm behind on my mortgage by 3 or 4 months. Never late on any other bills I don't have a salary job-- commissionion only. should i file bk or let the house foreclose
Kevin_Taylor(A) This is a good time to do the math. Take a look at the low end of the monthly average of the commission you make and start considering that the new monthly budget you'll be surviving on. If this average is substantially lower than what your usual monthly expenses are then you might consider getting out of that house soon (sale, short sale, foreclosure). If you're also deeply in debt in other areas, you might want to talk to someone such as Consumer Credit Counseling Services. Obviously, this is a very important time in your life and I understand that this format can only just scratch the surface of your personal situation. Take care
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Soapnut63(Q) I have a question,I just paid off my credit cards,& I have been debt-free,& I feel great,but I'm contemplating whether I should apply for just one credit card for emergencies only,what do you think?I have been paying my bills on time,if not early,& I just need to know if it's a good idea or not.
Kevin_Taylor(A) Credit usage is a personal choice, but please consider looking at building an emergency fund equal to about 3 to 6 months worth of living expenses. However, this may take you a while to get to that level. Some people temporarily cut their expenses so they get this balance built faster and then go back to their regular budget. Please be careful if you're looking to start new credit. I hope this helps.
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8558(Q) I am 65 retired living on Pension and SS. I have an ARM that is coming due in '09. Would it be smarter to try to sell or hold out to refinance?
Frank_Lenk(A) I would contact your lender to find out what it will reset to, if it were to reset today. It depends on what the ARM is tied to. In my earlier answer, I suggested many ARMs might be tied to the LIBOR, and historically it has fallen as the Fed lowers interest rates, which the Fed is currently doing. However, somehow I forgot that currently, the LIBOR is at historic highs, so even if it comes down, it has a way to go before it reaches "normal" levels. Also, before you sell, note that housing prices may still be falling, so I would also talk to a realtor who knows at what price houses are actually selling at today. Then you can better evaluate what your house would likely fetch in today's market. Once you have this information, you will be able to make a better decision.
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