Skip to main contentSkip to main content
You have permission to edit this article.
Money questions? Financial Planners Offer Answers

Money questions? Financial Planners Offer Answers

  • 0
money illustration - saving.jpg

If you have questions about retirement, investments, insurance and other money matters, you’re not alone

The Orlando Sentinel and the Financial Planning Association of Central Florida recently offered a free annual Ask An Expert hotline with certified financial planners.

Here is a sampling of the questions and answers.

Q: How much is enough money to retire?

A: The amount is purely based on how much money you need to live. I recommend speaking to a certified financial planner to create a game plan to help you determine how much you need compared with how much you already have. It is important to know these numbers before you contemplate retirement. — Christopher Dale, Life After Grief Financial Planning

Q: Is it possible to convert a term life insurance policy to a whole life insurance policy?

A: It is, depending on the policy. Most term policies will have a conversion feature allowing you to convert the policy during a certain period. Keep in mind, though, that premiums for a whole life policy will be significantly higher than those of a term life policy. — Derrick Chandler, Moisand Fitzgerald Tamayo LLC

Q. Do I have to have taxes taken out of my pension and Social Security as I receive the money monthly or can I wait until I file my taxes and pay it all at once?

A. There can be penalties to the IRS if you do not pay any taxes throughout the year. I recommend that you either have taxes withheld or pay quarterly payments to avoid the penalty. — Rhonda Shurtleff, Stonebridge Financial Group

Q: I have a lot of student loan debt and am currently in the income-based repayment plan. What should I be considering?

A: The income-based repayment option is nice because it does provide flexibility in payments, and you can still pay based on a fixed schedule when you can. Depending on how many years of payments are remaining, be prepared to have taxable income for the balance after the 20- or 25-year term and to pay tax on it. — Tommy Lucas, Moisand Fitzgerald Tamayo LLC

Q: I have $2 million in my IRA. I have had a financial adviser for several years who I pay to help manage my portfolio. Lately, I’ve been wondering if it is worth it, or if I should just do the investing myself?

A: You should ask yourself what this person brings to the table for the advisory fee charged. Do they assist you with tax planning, estate planning and your overall finances? Do you trust them? Has the performance of your portfolio met or exceeded that of the S&P 500? All of these things go into what makes a successful advisory relationship. — John Cash III, Hub International

Q: I just retired and want to know what options I have for my 401(k) since the returns I’ve been receiving haven’t been that great.

A: Your 401(k) account is the umbrella over your investments within it, so consider looking at other investment options offered by the plan. You can roll over your 401(k) to an IRA, which might give you more investment options. But simply moving the accounts will not improve your returns. The returns are based entirely upon the investments you choose. — Helen Von Doltern-Fournier, AEGIS Advisors LLC

Q: If I have a chunk of money to invest. Should I invest it all at once or space it out over time?

A: Dollar-cost averaging — which is investing funds through increments of time — is the best way to invest a chunk of money because you never know when you might be hitting the best dip in the markets. — Nancy Hecht, Certified Financial Group

Q: I have a single highly appreciated stock and was told I could acquire an exchange fund. What is it?

A: An exchange fund, sometimes called a swap fund, allows shareholders of concentrated stock positions in different companies to pool their shares and exchange their shares for units in the larger pool’s portfolio. You should proceed with caution and understand the time commitment, cost and tax ramifications associated with these funds. They can defer but do not eliminate your capital gains. — Chris Toadvine, Certified Financial Group

Q: My employer has indicated it will be paying sizable bonuses before the end of the year. Can I have all or a portion of my bonus go into my 401(k)?

A: Yes. Since you are age 50, you may, by way of salary deferral, contribute up to $26,000 to your 401(k). If you chose a percentage of your salary to go into your 401(k), the same percentage of the bonus should go into your 401(k), but confirm that with your company. If you would like more of your bonus to go into your 401(k), you need to let your employer know before receiving the bonus. — Jay Stokes, Stokes Wealth

Q: I am a real estate investor waiting for a good deal to come along. How should I invest my cash to get more interest while waiting?

A: Cash is where you should be for the short term. Check rates of online financial institutions for the highest yields. Ultra-Short Bond Funds may be a good alternative. — Gregg Collier, Collier Financial Solutions Inc.

Q: My wife is the primary beneficiary of my IRA. Can she distribute 25% each to my three children upon my death?

A: Your wife could do whatever she wanted with the IRA funds, though taxes would need to be paid on any distribution. I suggest you list her and your three kids as primary beneficiaries. This way the children would all have their own IRAs and be able to decide whether to take a distribution. Your wife might need to give written permission to do this, but it’s perfectly legal. — Dennis Nolte, Seacoast Investment Services

Q: I am nearly retired, age 65, and single. I have an IRA that I would like to start taking money out on an annual basis, but I am worried about the penalty. How much is the penalty based on a 12% marginal tax bracket?

A: There is no penalty if you are fully retired and older than 59 1/2. The money that you take out will be taxed as ordinary income. However, you do not have to take any money out until age 72. After age 72, if you do not take a distribution, you might have to pay 50% of the amount of the required distribution you did not take. — John West III, Spraker West Wealth Management

Q. I am receiving employer stock options and grants as part of my compensation. Is there any strategy for holding or selling those shares?

A. If you have stock that may be expiring as part of your compensation, it is important to work through an income projection on how the vesting of restricted stock, grants, and options will show on your tax return over time. You may find there are years where your income is expected to increase significantly based on expiring options/units so selling those shares over time may be a significant tax benefit to you. — Colby Winslow, Creative Planning Inc.

Q. I am in my 80s, married and have adult children. Do I need estate planning documents? — K.S., Oviedo

A. It never hurts to have estate planning documents. Without them, there are laws that will dictate what will happen to your assets at your passing. The default method for transferring assets to the next generation might not be how you will prefer it and having more control is the primary benefit to having your own estate planning. A more immediate benefit is that they give control to your spouse to interact with financial institutions and health care providers on your behalf while you are living. — Mike Salmon, Moisand Fitzgerald Tamayo LLC

This article was written for the Orlando Sentinel and distributed through Tribune News Service.


Be the first to know

* I understand and agree that registration on or use of this site constitutes agreement to its user agreement and privacy policy.

Related to this story

Most Popular

Get up-to-the-minute news sent straight to your device.


Breaking News

News Alert