Jill on Money: Savings, retirement, grading financial advisors

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Paula in KY asked about an adequate emergency reserve fund. Usually, I recommend keeping 6 to 12 months of living expenses in a safe place, like savings, checking, money market or short-term CDs - not a mattress! Still, Paula's case was a little different and as a result, she probably doesn't need quite as much.

On the other end of the spectrum is Donna in CA, a commission-based employee, who needs a much larger reserve fund to bridge good and bad months. She was seeking advice on how she can create more growth in the $200,000 that is above and beyond the reserve.

Joe in MD and his wife have done an excellent job of saving for retirement, which has provided them terrific options about managing their investments and weighing retirement plan options. They are weighing whether to take an annuity payment or a lump sum from a retirement account.

Marvin in CA asked a great question: how do you know if your financial advisor is doing a good job? I told him to ask his advisor for a report from the inception of the relationship that measured the account performance versus the relevant benchmark index (S&P 500 for growth, bond index for income or blended index for balanced).

While consumer borrowing increased as of the last report, JOM listeners are still interested in paying down outstanding debt. Teresa in MI asked whether she should pay off her mortgage, while Omar in NJ was wondering whether he should use a recently-received lump sum to pay off a low-interest car loan or whether he should it in a money market account or short-term CDs.

Trish from Seattle wanted advice on how to claim the loss of an investment in a defunct private company. I wasn't 100 percent certain, so after the show, I put Trish's question to TurboTax VP and CPA Bob Meighan who said that if Trish only invested in stock of a company that became insolvent then she could take a deduction for a loss in worthless securities. Worthless stock is also claimed in the year they become worthless (i.e., the year it is found that the company files bankruptcy). Trish probably does have to amend her tax return for the year that the company became worthless.

Fernando in CA asked about peer-to-peer lending (I'm luke-warm on these), and maxing out retirement accounts (an enthusiastic yes) and consolidation of accounts in the future.

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

Jill's blog

9 Questions to Ask a Financial Advisor

What Your Financial Advisor Gets Wrong

Best CD Rates

Where to Stash Your Cash

How to generate income from your portfolio?

Why You Shouldn't Pay Off Your Mortgage (and Why I Did Anyway)

Why you Should Pay Off Your Mortgage (and I Why I Took One Out Anyway)

Social Security estimator

Best Credit Card Offers 2012

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: askjill@moneywatch.com

Tweet me: @jillonmoney

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    View all articles by Jill Schlesinger on CBS MoneyWatch »
    Jill Schlesinger, CFP®, is the Emmy-nominated, Business Analyst for CBS News. She covers the economy, markets, investing and anything else with a dollar sign on TV, radio (including her nationally syndicated radio show), the web and her blog, "Jill on Money." Prior to her second career at CBS, Jill spent 14 years as the co-owner and Chief Investment Officer for an independent investment advisory firm. She began her career as a self-employed options trader on the Commodities Exchange of New York, following her graduation from Brown University.