We've teamed up with the Dallas-Fort Worth Financial Planning Association to answer your financial questions.
March 2010
Recent Posts
Shoud I Annuitize an Annuity to Roll it Over to an IRA? Tax treatment of an inherited annuity and IRAs
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March 2, 2010
Question: We have about $136,000 in flexible premium deferred annuities. The rate of new money is 3.50%, however it quickly becomes "old" money and is giving about 1% of interest. Can we annuitize this money and roll it over to an IRA or Roth IRA without having to pay taxes on it? We are 65 & 64 and retired educators working part-time with an annual income of about $115,000. We live debt free and own a home valued at about $200,000. We have CD's and an emergency fund totaling about $150,000 Kaye Click below for answer ![]() ![]() The entry "Shoud I Annuitize an Annuity to Roll it Over to an IRA?" is tagged: Annuitize , Annuity , Investment , IRA , Retirement , Returns , Roth IRA
Question: We recently inherited a life annuity and two IRA's, total amount about 400,000. Both were purchased by my Father in Law with after tax funds. He purchased the funds in the 1990's. He was 89 years old at the time of his death, and has been taking the mandatory withdrawals. The funds show as equal beneficiary's his three children, one of which wishes to withdraw their portion this year. It is my understanding that an immediate withdrawal will make the amount the fund or annuity has earned taxable, while the original amount is not taxed. Is this correct? My wife and I wish to avoid paying any unnecessary taxes, not to mention increasing our tax rate for the year. We are considering continuing the IRA and Life Annuity with our portion of the inheritance, which I understand we can do. Will you please provide us with advice on what you think our next step should be? Horace Click below for answer ![]() ![]() The entry "Tax treatment of an inherited annuity and IRAs" is tagged: Annuity , Inheritance , IRA , Taxes March 1, 2010
Question I got laid off in 2009. At the time, I had been contributing to a SEP. I still have money in it. Can I take deductions from my 2009 taxes for contributions made to the SEP in 2009? Thank you ![]() ![]() The entry "Deduction of SEP contributions" is tagged: income tax , SEP , SEP IRA
Question Would you recommend? Thanks for your help. L.R.
Question Debt free Is this company ok to work with bulldoze my debt. ![]() ![]() The entry "Debt free" is tagged: debt settlement companies February 26, 2010
Question: My father-in-law is 85 yrs old and has 12,000 dollars that he wants to put into something relatively "safe" but that gains more interest than a CD. Do you have any recommendations maybe some sort of mutual fund? This is not money that he needs at the moment for income. He also has 20,000 in an annuity that is about to expire. Again, he doesn't really need the monthly income from his annuity. Would it be better to take the 20,000 out of the annuity and put it somewhere else or should he leave it in and start taking monthly payments? What are the tax implications? --Gary "Click below for Answer" ![]() ![]() The entry "Advice" is tagged: annuity taxation , Emergency Fund , Retirement Income February 25, 2010
Question My wife and I have had our taxes done by H&R Block Premium the last few years, after having our first child and hiring a nanny for childcare. Our tax preparer was providing us info on how to handle the tax implications of being an employer, but after much confusion this tax season, we feel our preparer is not adequately informing us and is really just preparing our taxes instead of guiding us to the most financially beneficial decisions regarding how we deal with our 'employee'. Josh ![]() ![]() The entry "Taxes and Nanny Issues" is tagged: financial planning , income tax , tax planning
Question I want to provide a steady monthly income for my wife. I have 150,000 plus to start with but can add $2000 per month if it is possible. The problem I face is that I am 79 years old (30 years older than her) and in good health I do not owe any debts the house is paid for and clear. My income will stop upon my death and I want to provide approx. $2000 per month. I have been adding the maximum to an IRA for her each year but she will not be able to use this due to her age. Louis ![]() ![]() The entry "Income for wife" is tagged: budgeting , investing , money income February 24, 2010
Question I have a short question, should I pay all my utilities for the rest of year, and therefore pocket my social security, check, knowing it is mine, till December 2010 ![]() ![]() The entry "Prepay Utilities Bills" is tagged: budget , prepay February 19, 2010
QUESTION: We are 59 and need help with our large debt. My husband is currently unemployed and we have only $30,000 in savings. I have about $65,000 in mutual funds. We have 2 kids in college and have taken a lot of student loans. We have a lot of debt on credit cards. We now cannot sell our house worth about $360,000 and down size because we can't get a loan. We have already taken a lot of equity out of our house. I am a school counselor making about $60,000. I know there are consolidation programs and people that can help but I don't want to go through a lot of history and it end up costing us money. Where can you direct us? A. G. Click below for answer ![]() ![]() The entry "What Should We Do With Our Debt Situation?" is tagged: debt , mortgage , Unemployed February 18, 2010
Question: In 2009, my company laid me off in March. I got a W-2 for January through March. With the work that I had done while employed during that time, will I be able to take the EITC credit? Click below for answer
![]() ![]() The entry "Earned Income Tax Credit" is tagged: Earned Income Tax Credit February 17, 2010
QUESTION: This year I will have to take my first RMD for my traditional IRA. Should I sell stocks that have gained or lost for the distribution? P. W. Click below for answer ![]() ![]() The entry "What Should I Sell To Provide For My Required Distribution?" is tagged: IRA , IRA Withdrawals , required minimum distribution , RMD February 16, 2010
Question: My daughter is a full time student and has Series EE savings bonds Jo Ann Click below for answer ![]() ![]() The entry "Higher Education Tax Benefits for Series EE Bonds" is tagged: benefits , Higher Education , Tax , U.S. Series EE Bonds
Question: I was laid off from my job in 2009. I applied to my mortgage bank for a loan mitigation. After 6 months my bank turned my request over to a loan mitigation processing company. The loan mitigation company reviewed my application and determined that I do not qualify for a loan mitigation according to Fanny Mae rules. They will not explain why I do not qualify and are reluctant to give me written notice. Is there any way to get access to the rules? Thank you. Click below for answer ![]() ![]() The entry "Loan Mitigation Rules and Procedures" is tagged: Foreclosure , Mitigation , Modification , Mortgage , Refinance February 15, 2010
Question I am using TurboTax to file my taxes and generally don't have a problem understanding the interview questions but not on this issue. My wife and I both work. I answered the questions on the interview noting that neither of us received SS, railroad or veterans benefits from Nov 2008 - Jan 2009. TurboTax shows my wife and I are eligible for $689 in Making Work Pay Credit. It goes on to say that most people already benefit from this credit by lower federal income tax deductions on payroll. I work for a major company but have no idea if my company has already figured the tax reduction in my withholding or not and I don't know how TurboTax would know that either. Based on what I entered it says I'm eligible for the credit. Is there something I'm missing here or just more of the government handing out money to us we will eventually have to pay back with higher taxes? Thank you Confused in Rockwall
![]() ![]() The entry "Making work pay credit - 2009 Income Taxes " is tagged: IRS , Making Work Pay credit
Question: I know that the limit for an HSA contribution for 2009 was $5950 and I contributed the full amount. ![]() ![]() The entry "HSA Question" is tagged: Heath Savings Accounts
Question: I'm getting close to retirement (within 1 year) and I am confused about asset allocation. I sometimes think I currently have my 401k allocated very aggressively for my age. I have always considered social security and the pension I will receive to be part of my "overall" portfolio, although I realize that these 2 parts are not anything I can self direct or re-allocate. As a result, I've kept my 401K allocation roughly 80-20, (equities-bonds). I'm diversified in my holdings with domestic and international stock funds. Should I be considering the pension and SS this way? Why or why not? Thank you in advance and I'm really enjoying the "Your Money" section in the paper. This type of information is in desperate need in my opinion. -Bruce "Click below for Answer" ![]() ![]() The entry "Asset Allocation in Retirement" is tagged: asset allocation , Retirement Income February 14, 2010
Question My wife and I would like to reduce the amount invested with our FA to save on annual fees. She currently bills us at .90 against our total. This costs us roughly $6000 a year plus we still have to pay load fees etc. on actions taken. About 1/3 of our account is in an IRA which we heard we can remove from the account without penalty but we don't know if the information is true. Nor do we know how to go about actually doing this. We have had an account with our FA for a bout 4 years and feel we want to control some of our own money. Can you help with a suggestion to go about this. ![]() ![]() The entry "Move money without penalty???" is tagged: Financial Advisor , investment fees , load funds February 13, 2010
Question I have an IRA with KBS REIT. I paid $10 per share for 1900 shares and it was worth $19000. In November 2009 I received a statement saying shares were now $7.00 and value $13000. My financial advisor said not to worry, but I am worried. Should I take my money out or stay in this investment? Additional Question: I know you haven't had time to reply but this is my second request. My question is should I roll over what's left into something else, or leave it there as my advisor says. Thank you. Sara, Senior Citizen ![]() ![]() The entry "Worried about my REIT Investment" is tagged: investment , REIT , retirement
Question I read your (Pamela Yip) column regularly but there is a topic that no one seems to want to address. There are many of us in this economy that have had to dip into or completely exhaust their retirement savings. My future retirement, should I do nothing to recover, will rely on my monthly SS check and renewals from my insurance agency. I will be 65 this month, and am earning at a good level again now and I want to start to contribute at least $500 a month into some vehicle. I am healthy and can continue to operate my insurance agency for the foreseeable future. The savings plans I've investigated pay a whopping 1-2%. Do you have any advice to those of us that are starting over instead of retiring? Thanks. Marc ![]() ![]() The entry "Starting over instead of retiring" is tagged: budgeting , financial planning , saving
Question ref: http://homebuying.about.com/od/buyingahome/a/21808_taxcredit.htm ![]() ![]() The entry "Question re: $6500 Tax Credit for repeat home buyer" is tagged: home buyer credit , tax credit , taxes
Question My wife and I have not been good stewards of our finances over the last 20 years. We pay our bills, but, ever since I was unemployed for 9 months two years ago, (I'm employed now), we are paying right on the due date, or a few days late. We have called our mortgage company about modifying our loan, but, we make too much money. We have a high debt to income ratio and we just cannot seem to get ahead. What can we do to put ourselves in a better financial position? ![]() ![]() The entry "How to improve our financial position" is tagged: budgeting , financial planning , savings
Question I was laid off from my job in 2009. I applied to my mortgage bank for loan mitigation. After 6 months my bank turned my request over to a loan mitigation processing company. The loan mitigation company reviewed my application and determined that I do not qualify for loan mitigation according to Fanny Mae rules. They will not explain why I do not qualify and are reluctant to give me written notice. Is there any way to get access to the rules? Thank you. John ![]() ![]() The entry "Loan Mitigation" is tagged: loan modification , mortgage February 11, 2010
Question: I have several CD's that I need to move into something that has a better return. Do you have any suggestions? Also, what is the best way to help my grandchildren save for college? ![]() ![]() The entry "Savings" is tagged: Annuities , CDs , investments , savings
Question: My husband and I are both retired with a combined income of over $50,000 from pensions. We have no debt, and we have over $200,000 in CD's. Also, we have about $40,000.00 in Pioneer Mutual Funds. He is 72, and I am 70. Also, we keep about $30,000 in checking accounts. Is there any better place for our money that we put in CD's? Is there any safe annuity? --Linda "Click below for Answer" ![]() ![]() The entry "Financial Planning" is tagged: investments , retirement |