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As stocks reach new milestones (Dow 13,000, S&P 500 1400, NASDAQ 3,000), investors are crawling out of their bunkers and moving out of fear mode into action mode. For many "Jill on Money" listeners, that means grabbing hold of their financial lives and implementing a new plan, while for others, it's time to revisit old plans to make sure they are on track to succeed.
Dianne in Nashville and her husband are retiring in the next year and need impartial direction, after receiving financial advice, which she thinks may not have been in their best interest. Here's the tricky part about financial advice: most professionals doling out advice DON'T have to put you first. The only advisors that must put your needs first are Registered Investment Advisors. This is known as a fiduciary duty and investment professionals who aren't fiduciaries are held to a lesser standard, called "suitability," which means that anything they sell you has to be appropriate for you, though not necessarily in your best interest.
Margaret from CT is a retired widow, who has worked hard to reduce all of her debt. She wants to know what to do with the money that remains in her 401K, most of which is earning a whopping 4 percent in the fixed account and how she should manage an additional $140K that she will be receiving.
Anne from Houston, who is a retired veteran of the military needed some help to kick-start her retirement plan, while Andrew from Washington, is active in the military (please always thank these wonderful people for serving!) and wanted advice about investing. I suggested that each of them check out USAA, an organization devoted to the financial needs of military families.
Retirement always spurs lots of decisions: Alan is trying to determine when to retire, while DNT is considering a lump sum from a retirement plan versus a stream of income from a defined benefit plan? Retirement questions are always specific to the caller or writer, so when you hear me recommend a certain course of action, you shouldn't necessarily apply to your situation, without dropping me a line.
Brenda and John each needed with real estate and mortgage questions. Brenda owns three properties, two of which are rentals that create positive cash flow every month, but is not sure whether or not she should sell. Should John tap some of his savings to pay down his mortgage?
Luther from Little Rock and Bruce had tax questions, which resulted in unhappy answers. Patty's tax question about tax withholding was much more pleasant. Remember to use your refund/payment as a guide to help you reach that sweet spot of coming within $1,000 in either direction. Remember, a tax refund is a return of your interest-free loan to Uncle Sam.
Here are web sites and resources mentioned in this week's show:
-- NAPFA: National Association of Personal Financial Advisors (fee-only advisors)
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