Ask Money - Most Recent
You answered a question on the air from a young soon to be married person regarding life insurance. You advised that the standard 1x salary being offered by his employer is probably "enough", but you never asked if he had any outstanding debts. What for example, happens to student loan debt if a person dies? I'm aware that student loan debt can't be discharged in bankruptcy, but can it be discharged in death? Would a surviving spouse then be responsible for the student loan debt? Other debt, I am certain would become the responsibility of the surviving spouse, such as a car loan or credit card debt, but I have no idea what happens with student loan debt...Shouldn't debt also be considered when considering life insurance? We always hear about how do want to "take care of" after death, such as funeral expenses, and supporting our survivors' life style for a period of time or if there's children helping them to pay for their education, but I've never hear anyone speaking of discharging the debt as something that also needs to be "taken care of".
I am retiring on January 1. I have to select how I want my defined pension amount monthly. One option is to have the same amount paid no matter if my wife or I die first. The amount will always stay the same until we both die. The second option is to receive higher amount until one of us die. After that, the amount goes down by one third. The second option would give me about $6,000 more annually, but about $22,000 less when one of us dies. I am thinking about doing the first option to keep pension constant for both of us. Any suggestions?
I'm deathly afraid of over-funding my children's 529's for college. Right now we're aggressively funding their 529's to help cover most of their undergraduate educations. However, if either of them don't spend much for college (maybe they go to trade school, earn tons of scholarships, etc.), then we will have this money locked into these 529's and penalties to pay on the way out! Our financial adviser says that the money can always be used for a relative, but I'm not sure I want to give $20,000 to a niece or nephew (who are already well-funded). Should we be saving a portion of college-earmarked funds elsewhere?
We currently have over $140,000 sitting in our (very low) interest-bearing checking account: .85% if we keep it over $100k, .80% for 50-99K. I know I should do something with at least $40K of this money. Plus we may sell property we own soon and will then have an additional $130,000 to invest. I know this is a good situation to be in, but I'm paralyzed by not knowing what to do with it. We just paid off our mortgage and we do have healthy 401K & 403B accounts and we're in our early 50's. I believe we're maxed out (or close to it) on our 403b contributions. My only investment experience to date is within our retirement accounts and bank savings/checking accounts. Our income is close to $200K so I know I need to consider tax consequences of any investments. I've considered CDs, but the rates aren't much higher than my checking account. What to do?
My wife and I are in the planning stages of a garage project that will net us an apartment to reduce our living expenses when we move in and rent out our home. Not accounting for returns, we can save the funds needed in about two and half years. We're currently trying to figure out where to put this money (the account and fund type). We want something low risk, but with higher returns than a savings account, and tax implications are important. We're considering using three Roth IRAs for this and withdrawing the base to complete the project, leaving the gains in the accounts when we do so. What would you recommend we do with the money?
I have two friends who have new brand new babies in their families. My best friend is a grandmother to a new baby; and my niece has a new baby. I would like to give them a small gift -- $25 to my friend and $50 to my niece -- to start or add to a college fund for the new babies. I am 65 years old, and don't want to control the fund once I give the gift. Education is very important to me, and I want the money securely held for college expenses for these babies and not available for anything else. I suspect my niece (she's a PA and her husband an engineer) already have a college fund established. But I suspect the daughter of my best friend (who's very financially responsible herself) hasn't even thought of a college fund. How can I do this?
I recently purchased some furniture and in order to build a good credit history, I purchased the furniture on credit. I was unaware I will be issued a credit card for the same. Now I am stuck with a credit card which I do not really see using in the future. I would like to get rid of this furniture credit card and in lieu, perhaps, get another good offer credit card from Marriott which has great perks that I would use.
How would this situation show-up on my credit history?
I'm 29, finishing a Master's program in Rangeland Ecology and Management. I'm down to thesis writing, so I haven't been a full time student for a bit and my student loan grace period is up. I have about $40,000 in student loans, APR 6.8%. I have no income at the moment, but I'm optimistic that I will be finished with school and have a job by May. So I'm not worried about making minimum payments, possibly making big payments depending on the quality of the job.
Thing is, I happen to have about $17,000 just sitting in a Roth IRA. Does it make economic sense to be sitting on this when I have a sizable debt?
The student loans are the only debt I have.
Currently I am 28, married and have a daughter who is 10. The only debt I have is my home, which I currently owe $300,000 on. We have $100,000 in equity. We do not have any investment accounts now and have $400,000 in our checking account (yep, I know it's crazy!). I want to put money away and begin compounding interest.
My 2 main questions are:
1) where should I put the money? I want to retire around 50, so 20 years from now.
2) what percent gains on average can I expect each year? I've done the compounding interest calculator and it really begins to put out large numbers once its gets over 10% a year or so.