Family loan must be formalized

May 5, 2013

Q: My son graduated from law school in 2006 and owes about $206,000. I want him to pay off one of his loans (about $50,000 with the interest rate of 8.25 percent). I want to give him $13,000 and loan the rest with the condition that he pays it back when he can. What are the tax consequences with this arrangement? – T.M., Orlando

Roth IRA rules based on income

April 28, 2013

Q: My company has a defined pension plan that it funds entirely. In addition, I contribute 16 percent of my salary to its matching 401(k) plan. Can I also contribute to a Roth account? If so, how much? — J. E., Davenport

Make kids beneficiaries of IRA

April 21, 2013

Q: I am a recent widow and have an IRA. Now that my husband is no longer a beneficiary, should I name my three children as beneficiaries or name the estate as a beneficiary? — D.L., Lake Mary

Factors abound in pension payout

April 7, 2013

Q. I'm retiring soon from my employer of more than 40 years with a defined benefit pension plan. How can I maximize my monthly payment while still providing adequately for my wife in the event of my death? — M.K., Orlando

A lesson on 529 vs. prepaid plans

March 31, 2013

Q: I'm interested in setting up a college plan for my grandson in California. Is a state prepaid plan or the 529 plan the better way to go? — J.M. Winter Springs

Couple should shore up insurance

March 17, 2013

Q: My husband and I are both working part-time jobs with no benefits, and we have two young children. We have $600,000 in old 401(k) accounts, $130,000 in cash from a land sale and $5,600 in credit card debt. What should we be doing with our cash? — E.M., Orlando, 58

School plan won't affect IRA

March 10, 2013

Q. I work for a public school district, and it is required that I participate in the retirement plan that it provides. Can I still contribute to an IRA? — S.F., Orlando

Take the monthly pension payment

March 3, 2013

Q: I am 65 and getting ready to retire with a pension plan. Should I take a lump sum or a monthly payment? We have other resources available, Social Security and my husband's pension. — D.M., Orlando

Bank deposit insurance is $250K

February 24, 2013

Q: I have money I would like to keep at a bank. What's the most that will be covered under federal deposit insurance?

Explaining how Roth IRA works

February 17, 2013

Q. What exactly is a Roth IRA?

Explaining various Medicare plans

February 10, 2013

Q: What is the difference between a Medicare Supplement and Medicare Advantage plan?

Don't hide your health issues

February 3, 2013

Q: I need long-term care insurance but have a health history that could prevent me from being approved. If I don't tell the agent and a two-year exclusion period ends, would I have coverage?

The basics on reverse mortgages

January 27, 2013

Q: I am 54 and want to have income in retirement. I'm interested in reverse mortgages. Can you explain them?

RMD depends on account value

January 20, 2013

Q: I will be 70 and a half in February. When and how much must I start withdrawing from my retirement account?

Consider diversifying bond funds

January 6, 2013

Q: I am invested in a high-yield municipal bond fund. I've had some great gains, but wanted to know if this is a good time to sell or should I continue to hold as a long-term strategy?

Few guarantees in investments

December 30, 2012

Q: Is there any investment that pays at least 3 percent interest with a 90 percent guarantee?

Care insurance also has death benefit

December 23, 2012

Q: I am 76 and interested in long-term care insurance. I have a proposal where I would pay $50,000 to an insurance company. There are rider charges that I don't understand. What should I do?

Settlement not subject to taxes

December 16, 2012

Q: My 21-year-old received a legal settlement for an auto injury this past March (the injury was in January 2011) of about $4,000. I think he has to file a federal tax return for this year since he was finally well enough to work for a few months. Does he have to claim that settlement for an injury that kept him out of work for a year?

Setting up death-transfer account

December 9, 2012

Q: I have about $100,000 that I would like to leave to my children. What would be the best method to do so without going through probate and having my children owe taxes on their inheritance?

Don't lock into annuity right now

December 2, 2012

Q: I just retired and have a 401(k) with my former employer. I will not need the funds for at least 10 years, and I am not concerned about risk. I have been thinking of moving my 401(k) to our IRA in a fixed annuity. Is that a good idea?

How CD-locator firms work

November 25, 2012

Q: A financial firm in Orlando is advertising 12-month Certificates of Deposit with 3 percent interest. They say they are FDIC insured. Most 12-month CDs I see are hardly paying 1 percent. How do they do that?

Social Security and the long run

November 18, 2012

Q: I'm single and plan would like to retire as soon as I can but I'm concerned about my income. When should I begin to collect Social Security?

Sell those 4 houses to diversify

November 11, 2012

Q: I own four homes in addition to the one I live in, which is worth $500,000. I want to leave a legacy to my children. Should I sell the other houses now?

Beware trying to time the market

November 4, 2012

Q: A friend tells me I should pull my money out of the stock market before the election, since it is likely to drop afterwards. Should I?

3 distributions may be needed

April 15, 2012

Q: I have an IRA and two 401(k) accounts. At 70 ½, do I have to take a Required Minimum Distribution from each account, or can I combine them and take one distribution?

Ex-spouse can claim higher benefits

April 1, 2012

Q: My ex-husband and I were married 10 years. Is it true that I can choose to take his Social Security benefits ( if it is more) rather than mine when it comes time for me to retire? He has since remarried.

Check your nest egg twice a year

March 25, 2012

Q: I have less than $250,000 in my 401(k), and my wife has less than $60,000 in savings. Our gross income is close to $100,000 per year. Should I have my 401(k) reviewed more than once a year, if that?

Job No. 1: Pay down that debt

March 4, 2012

Q: I would like to start investing in the stock market. I am 25 years old, have $20,000 in student loans left and I also owe $15,000 in credit card debt because of being unemployed. I now have a good job and want to start saving. My employer offers a 3 percent contribution in its 401(k). W.C., Orlando

Do retirement plan first

February 26, 2012

Q: Now that I have my savings account and life insurance taken care of, I want to start putting away some money. I'm torn between a 529 plan for my child's college education and a Roth IRA for my retirement. What should I fund first? — J.D., Winter Springs

Options for inherited 401(k)

February 19, 2012

Q: I am the non-spouse beneficiary of a 401(k) plan. Do I have to take it all as one distribution and then pay taxes on it? I am 35 years old, and the person I inherited it from was 54 years old.

2 percent payroll tax hike looms

February 5, 2012

Website can help with advice

January 22, 2012

Even in wild times, diversity's key

January 15, 2012

Refinancing can save thousands

November 20, 2011

Q: I am single with no kids. My current mortgage has a balance of $101,000 and a remaining term of 21 years. At my current rate of 5.87 percent, I should consider refinancing?

Even young folks need a will

October 2, 2011

Q: Someone told me that I need to set up a will, but we are a young family and have few assets. Do I need to worry about a will at a young age?

Get some free financial advice today

September 26, 2011

Can't jump-start your retirement savings? Still confused by Roth IRAs or other 401(k)s?

Figuring basis on inherited stock

September 18, 2011

Q: We inherited stock that was purchased for more than $70 a share. The original company was absorbed by a larger company and the stock split a few times. We sold a portion for $40 a share. Can we claim a loss using the original share price vs. the sale price? — D.M., Mount Dora

Home equity credit line might fill financing gap

February 27, 2011

Q: I own my own home. I have less than stellar credit, but I do have some cash. I would like to buy two rental houses using financing. Would I be able to get a mortgage? — S.V., 54, Clermont ƒz A: With the recent tightening of mortgage lending, you might not qualify for a mortgage on an investment property. However, you might be able to use a home equity line of credit to assist you in meeting your goals. Visit your bank or a mortgage broker to find out more. — Beth Fleming Brown ƒz Q: I've been seeing advice to put more investment savings into dividend-paying mutual funds rather than equities -- at least for those of us near or in retirement. Would mutual funds containing large-cap, dividend-paying companies be similar to other good, large-cap funds? — S.C. ƒz A: Using large-cap mutual funds with a high dividend objective can be advantageous. Large cap equity mutual funds generally have a value approach that performs well in certain market conditions. However, since all approaches come in and out of favor, your total portfolio volatility can be reduced by employing other styles of funds, such as growth, including mid- and small-cap and international. Many of these may have some dividend income as well. It's also advisable to hold bonds, cash and certain alternative investments. Consult a certified financial planner to help you figure out the appropriate mix for your situation. — Thomas Fleishel ƒz Q: I made a will years ago leaving everything to my brother. Since that time I have married and now listed my wife as beneficiary on everything and put her name on the house. Should I somehow cancel the will? — T.S., Lake Mary ƒz A: I would change your will to reflect you new beneficiary. If you wish to keep your brother as beneficiary on some items, the will is where you would do this. Your beneficiary designations on accounts and title changes such as joint with rights of survivorship will supersede the will, but the will can cover anything that does not have a beneficiary designation. — Nancy Hecht

Run from advisers who suggest violating the law

February 13, 2011

Q: I want to increase my retirement savings, but I have already reached the contribution limit for my Roth IRA. Two financial professionals have said I should go ahead and exceed the limit because it would take the IRS years to catch the violation. This doesn't sound right to me. — A.L., Orlando ƒz A: I wouldn't take advice from anyone that thinks it is all right to violate the law. Deal only with advisers who are committed to obeying all applicable regulations and stand behind their advice. — Richard Almeida ƒz Q: I have the option of taking my pension out now at $174 per month, or waiting until I turn 65, which will be in five years. If I wait my pension will be $251 per month. My family has a history of longevity, and I don't need the money now. — W.T.S., Orlando

Wait before taking mortgage to pay for kids' college

February 6, 2011

Q: I own several homes free and clear, including my primary residence. Since the mortgage rates are low, should I obtain a mortgage so that I can use those funds to send my children to college? They are currently in secondary schools. — B.M., Leesburg ƒz A: Although interest rates are at an extremely low point, I don't recommend taking a mortgage on your home or rental property if the money is not needed. Once your children are closer to college age, and you have explored all options, then this may be an option to review. — Christina Pinto ƒz Q: I plan on retiring in two years when I am 62 and receive my Social Security payments. My wife is retired now and is on a disability pension from teaching. Will she be eligible for a Social Security payment of 35 percent of what I receive? She will be 63 then. — D. R. ƒz A: If you begin your Social Security benefits at age 62, they will be reduced by a factor for each month you begin before your full retirement age. At full retirement age, your spouse could collect 50 percent of your benefits, but hers will be reduced if she begins to collect the benefits early. If her disability payments are through Social Security, that will also affect the retirement benefits that she receives. — Dianne Webb ƒz Q: What should I invest in if I want my money to last for 20 years? I am 80 years old and am concerned about inflation as well. — B. N., Orlando ƒz A: There are several options that could work if you only take the interest out, leaving you with your entire principal in 20 years. If you choose an immediate annuity and are concerned about inflation, you can look for one that is inflation adjusted, or have other investments on the side to supplement the fixed income. — Cynthia Price

401(k) withdrawals can be made without penalty

January 16, 2011

Question: I retired from Lockheed Martin this year, I am older than 55 but younger than 59 1/2. Can I make withdrawals from my 401(k) that are not equal periodic payments without paying a 10 percent penalty? — J. V., Orlando ƒz Answer: You can avoid the 10 percent early distribution penalty so long as you left your job during or after the calendar year you turned 55. In addition, it is important to note this exception applies to qualified plans such as your 401(k), but does not apply to IRAs rolled over after you retired. You should consult your tax adviser for further clarification and assistance with reporting distributions properly. — Chris Toadvine ƒz Q: When we sold our house five and a half years ago, we held the mortgage. Recently the buyer wanted to refinance so we got a payoff for what was owed to us. Will we have to pay taxes on the payoff? — B.T.

Facing job loss, pay off high-interest credit card

January 9, 2011

Q: My husband might lose his job soon. How can we handle the $15,000 we still owe on three credit cards? We can pay extra toward the balance, and one card has a smaller balance than the other two. — R. M. C., Winter Park

Bonds could be tax-free when paying for college

January 2, 2011

Q: I have EE Savings Bonds and would like to know if I can use them for my son's education without having to pay taxes on them. M. H., Oviedo

Can existing plan be transferred to retirement account?

December 26, 2010

Q: Can I roll my 457 plan — a non-qualified, deferred-compensation plan — from the city of Orlando into an individual retirement account? I receive Social Security and two pensions. My 457 is in a stable-value fund, and I don't like risk. Is there a penalty if I do roll it into an IRA?

Finding '60s stock prices won't be an easy task

December 5, 2010

Q: How do you find the market price (for IRS purposes) of stocks before they became worthless in the 1960s and had no transfer agent, since the companies issued their own stock?

Yields will often vary on funds, CDs, bonds

November 21, 2010

Q: Do money market funds, certificates of deposits and bonds pay the same amount of interest?

Short sale will not affect 401(k)s, IRAs

November 6, 2010

Q: Are retirement accounts such as IRAs and 401(k)s exempt from consideration during a short sale? Also, can a lender attach any funds associated with retirement accounts?

Forgiven mortgage debt can be excluded from income

October 16, 2010

Q: I executed a deed in lieu of foreclosure this year. I received the original mortgage document filed with the county stamped paid in full. Will I still receive a 1099C for the forgiven debt, even though the note is marked paid in full? If so, will the 1099C be issued after the property is sold and closed, or this year? — B.H., Altamonte Springs

Inherited property creates capital loss in this case

October 3, 2010

Q: My mother died in November 2009, and I inherited her house. The house was put in my name, and I was able to sell it in early 2010. Because of market conditions, the sale price ended up below value and I had to pay about $8,500 in closing fees. Would these fees be considered as a capital loss for tax purposes? — C.S., DeBary

Heir will have to pay income tax on mom's IRA

September 11, 2010

Q: I just received $84,000 inheritance from my mother's estate. About $4,000 came from her IRA. How much in taxes am I going to owe on this money? — C.H. Altamonte Springs

Leave $150,000 IRA alone, don’t pay off mortgage

May 1, 2010

Q: I have $150,000 in an inherited IRA. Would it be better to withdraw $50,000 and pay off my 5.5 percent mortgage or leave it invested in mutual funds and bonds inside the IRA? — D.D., Altamonte Springs

Ask an Expert: Opting out of Social Security benefits

September 6, 2009

Q: In 1997 at age 65 I was employed and opted not to take Social Security benefits. I was told that delaying payments would increase the amount I would eventually receive. At age 70 I applied for the benefit and was told that I had lost a lot of money by not taking the benefit at age 65. Can I do anything to get this lost amount?