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Jill on Money: Real Estate, rollovers

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With the real estate market starting to finally show some progress, we fielded a bunch of calls about housing and mortgage pay-downs. Ann from MO started with a question about real estate investment trusts (REITs), after a CFP recommended a non-traded REIT for her $2 million portfolio. While the idea of income from real estate can be alluring, it may be wise to use a liquid, publicly-traded REIT vs. a non-traded one. I also provided Ann a few tips about how to talk to her advisor about the idea.

Both Fay from KY and e-mailer Larry asked about using retirement funds to pay off their outstanding mortgages. The problem with using retirement accounts to pay off a loan is that doing so means you would have to incur a tax liability, which is a heavy price to pay for the emotional relief of having no mortgage.

Carol wonders whether she should maintain a second home on her own, in the aftermath of her divorce. While she can qualify for a new mortgage on her own, she acknowledges that she can only use it every other week. Phyllis wants to know the tax liability associated with selling her house, which gave me the opportunity to explain the rules around capital gains exclusions associated with real estate. Meanwhile Sean is 30 years old and about to buy a home. Once he does take the plunge, he will have an extra $30,000 in cash and is not sure what to do with it.

Pete from KY called in to discuss retirement options and when to take Social Security. Given his ample retirement savings ($1.2 million) and pension income, the longer that Pete waits to claim Social Security benefits, the better. It would also be wise for Pete and his wife to see a fee-only advisor to make sure the retirement funds are properly allocated.

Speaking of diversification and allocation, Bill from WA has a $300K invested in a 401 (k) and has $250K in cash and wants to know what to do it. Given that the 401 (k) is 100 percent in stocks, which is why I suggested that Bill consider using bonds with the cash.

After a long time in the business, I have found that the boring advice really does work! I hauled out some old favorites for e-mailers Karl and Randy. Karl listens to the show on WCCO in Minneapolis and wanted to know whether or not his wife should roll over her old retirement plan. Meanwhile Randy is "playing with" $5,000 of individual stocks (boo!) and may be making another classic investor mistake: judging mutual funds based on short-term performance.

Robert wrote in asking about the taxes associated with whole life insurance and when it should be used as an investment vehicle. TJ wrote in about his 91 and 95 year-old parents and how to manage their remaining assets. Should they gift assets to the kids?

Here are web sites and resources mentioned in this week's show:

-- Jill's Blog

-- NAPFA: National Association of Personal Financial Advisors (fee-only advisors)

-- Social Security: Manage your account online

-- Social Security estimator

-- When to take Social Security?

--Social Security: File and Suspend

-- Social Security: Double-Dipping

-- Retirement Calculator

-- Life Insurance calculator

--Financial documents: What to shred, what to keep

-- Estate Planning: the Documents You Need

-- Re-Fi Calculator

-- Another Re-Fi Calculator

Thanks to everyone who participated and to Mark, the BEST producer in the world. If you have a financial question, there are lots of ways to contact us:

Call 855-411-JILL and we'll schedule time to get you on the show LIVE

Send an email:

Tweet me: @jillonmoney

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