Money Talk: Growth Requires Accepting Some Risk
Question: What is the best way to protect my 401(k) now and in the future when I draw from it for retirement? What is the least risky place to “bank it”? I have a fear of a crashing stock market in the middle of my retirement years. Answer: The bigger risk is that the stock market will crash early in your retirement years. Starting withdrawals from a shrunken pool can dramatically increase the odds of running short of money in your...
Money Talk: Don’t Help Teen Buy Luxury Car
Question: My son is almost 16 and has his heart set on a used luxury convertible. We have found a few that are priced at about $23,000 with about 50,000 miles. We are debating whether this is the right choice for him. The type he wants is not overpowered (it has a six-cylinder engine), has many safety features and gets decent gas mileage. He has worked hard since he was 8 in our business and has saved about half the money needed. (He...
Money Talk:
Question: I have savings bonds that have achieved full face value. What should I do? Keep them indefinitely or cash them in to fund my Roth account or what? Am I correct that once they have matured, there’s no more money to be made off them? Answer: You are correct. Once savings bonds have matured and stopped earning interest, they should be redeemed and the money put to work elsewhere. EE, H and I bonds mature in 30 years, while HH...
Rules for Social Security Benefits
Question: We have two children in college, both entering their junior years. We have two more in high school. The two currently in college need additional financial assistance, as they’ve tapped out their federal student loans. We are middle class, grossing about $125,000 a year, so we don’t qualify for much financial aid. We’re considering a cash-out refinancing of our home, but we feel as though we can do it only once, since each...
