Have questions about your retirement investments? Poor investment decisions could mean the difference in a happy and plentiful lifestyle and one where financial security is jeopardized, so get your answers from the experts.
You got one chance to get retirement right. Post a question anytime and we will try to answer your question within 48 hrs.
If you rather submit a private question (will not be shown below) you may do so here >>
32 Responses to this post
Leave a comment
Retirement Planning Blog features topics on Safe Retirement Investing. Our Retirement Blog has you in mind with up to date Retirement Reports and tools you need for a better retirement. Use this retirement blog to interact and ask questions! Don't forget to tune to our retired radio playing classic hits from the 50's, 60's and 70's.
| DJIA | 10607.16 | ||
| NASDAQ | 2366.87 | ||
| S&P 500 | 1149.77 | ||
| INTC | 21.22 | ||
| PFE | 17.27 |
| M | T | W | T | F | S | S |
|---|---|---|---|---|---|---|
| Jan » | ||||||
| 1 | 2 | |||||
| 3 | 4 | 5 | 6 | 7 | 8 | 9 |
| 10 | 11 | 12 | 13 | 14 | 15 | 16 |
| 17 | 18 | 19 | 20 | 21 | 22 | 23 |
| 24 | 25 | 26 | 27 | 28 | 29 | 30 |
I have 401 k with a previous employer, an IRA in a bank, a 401 k at work a total of of about 55,000 dollars. Also I have 70,000 in short term CDs plus a money market savings of 16,000. I am 67 and expect to work for another year. My wife and I get a total ss pension of $1700 per month. My goal is to make this money last a lifetime. What do you think should I do?
I suggest you get a financial check up from a financial advisor. Here’s why: your 401(k) at an ex-employer is probably not a good idea — move it to your current 401(k) if possible or combine with bank IRA or put in separate account. Also, since you plan to retire in one year, make sure your 401(k) are not loaded with investments that can go down in value. Your $70K in short-term CDs is boosting your taxable income every year — when do you plan to use this money? Your SS is a bit light…so I assume you started early and that may not have been a good move. See my “Guide to Social Security” — its a real eye opener. Can’t give you an specific advise without knowing a lot more — but can point you toward a financial advisor in your area if interested. Thanks for using my blog and make it a great day.
how do you feel about self-directed IRAs?
I’m a great believer in self-directed IRA — assuming you have some expertise or are willing to do some research. Ironically, I’m currently in the process studying the ERISA provisions about “in-service, non-hardship distribution election” and here is what I am finding:
1. By a simple amendment to an employer-sponsored retirement plan a participant can get some or all of their money out of a 401(k), 403B, 457, TSP, etc. without triggering a taxable event and can still participate in the plan.
2. The IRS allows anyone 59-1/2 to take their money and the employer’s money from a plan while continuing to work and participate in the plan; however, the employer may prevent such unless the plan has been amended to allow “in-service, non-hardship distibutions”.
3. The IRS will also allows an employee to take the employer’s profit sharing and matching contributions, any rollover from another plan moved to the current plan and earnings in the plan at any age if the plan has the “in-service, non-hardship distribution election” amendment.
What this allows is for someone in the red zone before retirement (ages 55 to 65) to get some or all of their money out of the way of a market meltdown by rolling into a self-directed IRA (or Roth IRA if they qualify) and also to position the money to convert to a Roth IRA in 2010 (if they do not qualify now because of the $100,000 annual earning limitation) or pay tax before the tax rates increase.
If your employer does not have an “in-service, non-hardship distribution election” amendment — start lobbying them now. You’ll get pushback from the broker who manages your money because as assets leave the plan they’ll lose commissions. By the way, as assets leave and the plan becomes smaller, the administration fees also drop.
I am receiving a service connected disability of 117.00 per month. I am planning on retiring in a year and i would like to know If i will continue to receive this amount.
Sorry but I cannot answer your question without knowing a lot more about the nature of disability and its fate once your retire.
I am considering moving to Mexico full time and am wondering what kind of experience people have had with the peso as a currency. In recent times have we seen much fluctuation?
Thanks
Conner Collins
In your article “Tapping into 401K”, you state a company can amend their withdrawal policy. Was this just referencing their company match contributions (which my company already does) or transfering your entire 401K? I would like to have the option to self direct and ergency is paramount since congress is looking to takeover 401K. Lord help us all if this is implemented.
There are three types of money that can be in a 401(k) and each are treated differently:
If you have a triggering event – death, disability, plan termination, retirement, leaving the employer and financial hardship (if the employer has a hardship provision in the the Plan, and it is their option) – money can be withdrawn or transferred.
Please read the full report on http://www.theretirementpros.com
Hello,
My Dad passed away in 1993. My parents were divorced in 1991 after having been married over 20 years. My Mother has never re-married. She was 52 y/o at the time my Dad passed away. At the time we were told she had no access to my Dad’s retirement or social security. Has anything changed since then? Should I help her look into applying for the benefits? She had to take an early retirement of her own due to medical issues. She is currently in Section 8 housing as well.
Thanks for any advice,
Eddie
Eddie,
Social Security benefits are available to widows who were married for at least ten years, have not remarried and are at least age 60. Granted, your mother could not qualify at age 52 but she is now eligible and should immediately apply by going to the local SS office. She also needs to ask for past benefits. We cannot comment on your dad’s “retirement” but we recommend you make an inquiry at your father’s employer – we sincerely hope the money has not been escheated to the state if she were eligible. See my “Guide to Social Security” — its a real eye opener. We would appreciate how this turn out.Thanks and have a good day.
I have two non-qualified fixed annutities that I’m considering to withdraw on a monthly basis because of the fragil econmic situation. There isn’t any surrender pentaly for these as I just let them sit there and was planning to withdraw at age 66 instead of now at age 62. I have two other annutities that I can’t touch until I am 66-hope they both have money it by then.
You article about fixed annuities has given me some hope; and, perhaps I will change my mind about withdrawing from them just right now.
Yes,I will have to pay taxes if I do begin my monthly withdrawls-that’s life. Is it an ok. thing to begin withdrawing from fixed annuties? I would put the money in the Pentagon Federal Credit Union’s money market as safe keeping because it is FDIC insured and PenFed is doing very well.
My one annutiy has grown to $30,317 and the other one grew to $61,167.
I’m thinking about withdrawing $600.00 a month from each, which would amount to a total of $ 16,400 a year for both of the annuities. The $30,000 annuity would be emptied within 3 years, and the $61,000 between 7 or 8 years.
Although I am worried about our economy and am tempted to withdraw the total of both annutities right now, realizing that I would have a very hefty tax burden for 2009, I want to do what’s good for me and the country, by taking out monthly payments, having some patience, by seeing how the economy works itself out after all the “bailout” packages are implemented and are in force; and, at the same time, leave some money in the annuities and letting what’s left in them to continue earning some interest money.
I really appreciate some solid feedback about my comments.
Please don’t condem me for buying fixed annuities back in 1992 with roll overs in 2000. I was in the Army for a long time and earned Army pay, which isn’t the most pay in the world, and I used the “inch-by-inch” approach to save money from my pay since 1975-way back-in-the-day.
I’m retired with a military pension and receive $ 7,000 a year from part-time income, and I save $200.00 a month as a matter of practical habit and feel guilty if I don’t.
Thank you for taking your time to read my comments and for any wise counsel out there.
Barbara Goldin
Barbara,
First of all, thanks for using our site — please refer us to others who can benefit.
Second, if you don’t need the money from your annuities, why are you going to withdraw? What are the ratings of the companies? If you are worried about the solvency of the insurance carrier, you may be worrying needlessly. If you withdraw from the annuity in any fashion other than “annuitzation”, the last-in (which is interest) is the “first out” for tax purposes — meaning most of your payments will be taxable. By the way, if you withdraw systematically over the next 3 to 7 years, you would not be escaping the risk of the carrier becoming insolvent or the scary economy we’re now in.
From what we know at this point (and to give you good solid advice we’d need to know a lot more), you might want to re-think your proposed actions, e.g., if your annuities are out of surrender and you don’t need the money, you might want to look at the latest version of fixed annuities – they have changed substantially with bonuses, guaranteed lifetime income options, etc. We would recommend you consult with your financial advisor before acting.
Dr. Smith
Dear Sir
I’m 48 live in the Philippines but I’m American and I have a 401k with about 40k in it. I’d like to use that money to buy retirment property in the Philippines. Philippines is one country where you could buy a retirement farm/home for $ 40k as things are much cheaper here and leaving my money in a plan seems risky as it has already devalued substantially and the other shoe hasn’t hit yet–inflation/deflation that all this printing of money will cause.
I heard one could use retirement income before age 59 if it was for retirement purposes which mine would be. Is this possible–would I avoid the taxes? Who could i talk to to execute this strategy.
You cannot withdraw penalty free the voluntary contribution you made to your 401(k) prior to 59½. If the Plan has an in-service, non-hardship withdrawal provision that permits employer matching and profit sharing to be withdrawn at your age, you can withdraw that money but unless put into another qualified account, e.g., IRA, you will pay both a sur-tax of 10% plus ordinary income taxes on the amount withdrawn. If you move to an IRA and the property you want to buy is for investment purposes, you might be able to use your IRA money for the purchase – but you’ll want to get tax and legal advice on this matter. Good luck. – Dr. Smith
I just got lay off because they bought another company and due to economic condition they have to eliminate duplicate position and I have 401K($40.000) with a previous employer.A previous employer, so far they are stable on the stock.
I am 47 and I am a single mother with 2 kids. My concern is to make this money save or last a lifetime/maybe for my saving toward retirement!
Do you think, it’s a good Idea to keep my 401K with a previous employer for another 12 1/2 years more or what do you think should I do?
thank you for your advise
JA
Dear Junny,
We recommend that employees do not leave their retirement money in 401(k) plans at ex-employers. There are several reasons for this which you can learn by going to http://www.theretirementpros.com and reviewing the video and article titled Rolling Over Your 401(k) Money by Dr. Shelby Smith.
If you would like help with this matter we’d be happy to refer you to a financial advisor in your area – there is no cost or obligation. If you would like a referral, please let us know by return e-mail at info@theretirementpros.com. We hope we have been helpful. Have a good day and please refer us to others who can benefit.
Helen Y.
The Retirement Pros
I am concerned that I do not know enough to really determine how my financial advisor is performaing… My friend told me to check his performance out by using http://www.evaluatemyadvisor.com. Do you know anything about this site? It’s $500 but if their report convinces me that he is doing good or bad, I think it might be worth it – just for my piece of mind…
My fiance is considering retirement from his government job. If he retires before we marry, will I be entitled to retirement benefits?
Dear Araina,
We’re sorry but you did not provide enough information for us to provide an answer. If you are planning to be married, your future husband should discuss this matter with the Human Resources director to determine how, or if, you can be included in his retirement benefits should he pre-maturely expire. You should address this situation BEFORE he retires rather than AFTER. Congratulations on you upcoming wedding and good luck in finding a satisfactory answer.
I would like to know how much of my ex husbands social security I can draw. He always made alot more money than I did. We were married for 33 years and I have not remarried. I cannot seem to get a straight answer from the social security office. One person told me it would be what I am due plus 50% of his and then someone else told me they could not release the information to me. I am soon to be 63 years old and would love to know how much I would draw. Thanks for your help.
Dear Barbara,
As an ex-spouse you are entitled to 50% of your ex-husband’s Social Security benefits that he would have received at normal retirement age. If he is not yet drawing his Social Security benefits, you will have to wait until he does or until he reaches normal retirement age. You are entitled to the greater of the benefits you will receive based your own work record or 50% of your ex-husband’s.
If you have worked in a government or teaching profession that did not require you to pay into SS, you may not be entitled to benefits based on your ex-husband’s work record. You should make an appointment with the local Social Security office to apply for benefits – this will force them to give you exact numbers. Be sure and take verification of your marriage, divorce and current unmarried status as you will be required to confirm you were married longer than ten years.
If you ex-husband is deceased, you are still entitled to benefits based on his work record – in fact, you re eligible for reduced benefits at age 60. Be sure you have the Social Security number of your ex-husband for the interview. We suggest you call 1-800-772-1213 and make an appointment with your local SS office – this will cut your waiting time. Good luck.
What is the maximum social security retirement benefit possible and what are the income requirements to reach that maximum ?
Dear Chuck,
The maximum SS benefits vary by year and at what age they are taken. Rather
than give you the various answers, please go to this web site for all the
details: http://www.ssa.gov/pressoffice/colafacts.htm.
SS benefits are determined by using the top 35 years of earnings — as you
know the maximum salary against which FICA taxes are withheld increases
annually. This information is also on the above web site.
For a guide on social security, please view my guide here >>
Dr Shelby,
Where can I get a list of companies that allow in-service 401(k) nonhardship withdrawls?.
Dear David,
Unfortunately there is no universal list available. You may find a partial list of large companies that have installed an ISNHW provision but it will not be complete. The only sure way to know is review a copy of the latest Summary Plan Document of the employer’s plan.
I can say with certainty that very few small employers have the ISNH withdrawal provision and the large companies with the provision stipulate an age of 59-1/2 which is not very helpful to those in retirement’s red zone. The really interesting aspect of this topic is that Congress is not considering changing law that allows employers (on advice of brokers and money managers) to stipulate older ages for non-hardship withdrawal while working — I suppose the lobbying dollars are freely flowing. I’ve attempted to persuade my Congressional representation to carry this cause but to no avail. Thanks for you question.
I am single age 54.5 and no longer have a 403b or other retirement plan.
I also lost my income property 6/09. I only have a savings account totalling $15,000,and my job(i live in California)my end 2/10.
should this money go into a Roth Ira? what should i do?
Thanks
Dear Imani,
Without knowing a lot more about your financial situation we cannot give you solid advice about the feasibility of converting your $15,000 qualified account to a Roth IRA. If you think there is a good likelihood you’ll need the money in the next few years, it would appear that a Roth is not for you. We would advise you to consult with your financial advisor. Sorry we could not be of more help. Have a great day.
I have a question regarding my retirement account. I am in my mid 20s and work full time for an employer that does not offer a 401k. I already max out my Roth IRA, but I am looking for additional investment vehicles beyond my Roth that may be tax advantaged, if any exist.
I earn $60k from my full-time job and make an additional $15k (approx) in freelance income. Would it make sense / would I be eligible to open an S-Corp for my freelance writing business so I can put my additional income straight into a retirement account? Or would I lose so much money from S Corp taxes that this doesn’t make sense? Would you recommend that I just put the remainder of my savings into Index Funds and ETFs (which will be taxed at both ends?)
Dear Joy,
Without knowing a lot more about you and your aspiration, I cannot give you investment advice. The important thing at your age is to save some of your income. The Roth IRA is a great idea because in effect you can save a larger amount since it is after tax and then grows tax-free. Systematic savings in a market based investment at your age generally make a great deal of sense since you are dollar cost averaging and have lots of time to weather market fluctuations. Tax advantaged savings include annuities, capital gains (risk) and dividend income (again paid by stocks and can be risky). Tax-free is limited to municipal bonds (lower interest rate than taxable fixed income) but suitability depends on your risk tolerance and tax bracket. If married or have dependents, you may want to investigate life insurance. Sorry I can’t help more but without some extended background I can’t really help you.
Regards, Dr. Smith
I have a 403(b) with my previous employer. I worked for them for one year and made monthly incremental payments into the account. When I left the balance that remained was less than $1000. Now, I have had this account for the past twelve years and the balance at this point is still low, less than $2000. My question is should I just leave this money alone in this account where it is or should I go ahead and remove it; possibly roll it over to my present employer retirement account? or is it really not worth worrying about, for lack of a better term, and just go ahead and have them send the check fo rthe funds to me?
Thanks
After finally retiring and turning 62, I decided to start tapping my 401K which had remained with my former employer and was managed by Prudential. Now Prudential informs me that I have to pay a $35 processing fee each time I make a withdrawel! This was never disclosed to me and my former employer says the issue is between me and Prudential. Can Prudential do this?