In a country where not enough people save, the thought that your saving’s habits could hurt you seems wrong, but its not. Sometime, how you save can be the problem. Let’s look at a couple of examples.
At the beginning of the school year, we have tax free shopping days. There is a lot that can be bought without having to pay the State sales tax. That can be a big savings for many people but do you really need the stuff you are buying? Buying stuff on sale or in bulk just because it is a “bargain” is not a wise use of your dollars or even a way to save if you are buying stuff you do not regularly use. I know plenty of people that will buy just because something is on sale. What I then see happen is they have no room to store the stuff or it ends up rotting because they bought too much. Please don’t fall into this trap.
Over the next few blogs, I will be discussing more saving habits that can be detrimental.

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Tax time is quickly approaching. I will be on Flashpoint with Lauren Rowe talking about our favorite time of year – tax time!

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Especially when it comes to retirement savings in the 21st century. Many of our Mothers are in their 70’s and 80’s now, their retirement world is, and has been, much different than ours will be. Many of our Mothers did not work outside of the house and depended on our Fathers for their complete financial wellbeing. Our Parents put a lot of money into their homes knowing that they would appreciate greatly; they could sell the home and retire in fashion without a care in the world. Our Mothers also lived life to the fullest because they did not know very many people who lived beyond their late 70’s. We live in a different world and cannot afford to follow in our Mother’s footsteps when it comes to retirement planning.

We must assume that our homes will only appreciate 3 – 5% a year. Depending on when we bought our homes, we may never pay them off. A Reverse Mortgage has become the mortgage payoff tool for many of the baby-boom generation. We are also seeing that life expectancy is much greater now for our Parents as well as for ourselves. This fact alone is the primary reason everyone needs to start saving and investing at a much younger age and until the day we retire.

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Q: I have to take distribution of my first Required Minimum Distribution from my IRA and do not have enough cash in the account. I do not want to sell any of my holdings. How can I move the required amount?

A: You can do a transfer in kind of assets to a non-retirement account. What this means is: move stock or mutual fund shares that equal your RMD, intact, to your non- retirement account.

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Roger Johnson, CFP & Nancy Hecht, CFP

On The Money 101:
What is a “Stock Split”?

This Weeks Email:
My wife and I have an adjusted gross income of just over $200k and we both contribute to our 401k’s at work. Can we still contribute to Roth IRA’s as well?
Us a “Backdoor Roth” IRA

Show Topics:

Energy Independence by 2017! What that means to us, the US?

The Market is up! Is it time to sell?
WSJ .com Market beat article April 1st, 2013 “Dow Nearing a Peak” that was 12% ago!

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When this happens, the first thing you need to do is contact the lender. Heirs get an initial 6 months to payoff the loan. Her lender will send out an approved appraiser within 30 days of being notified of her death. The amount that will be due to settle the reverse mortgage will be the lesser of the loan or 95% of the appraised market value of her house. One thing to note is that a reverse mortgage is a “non-recourse” mortgage. This means that if the appraised value is less than the loan balance, then lender cannot go after the heirs for the difference. So what happens next?

If you decide to sell the house, it must be listed for at least the appraised value. Adding an additional 5% to the sale price might help offset some of the costs.

If there is no equity in the house, you might just want to hand the keys back to the lender. This is called a “deed in lieu of foreclosure” and is a perfectly acceptable choice. If necessary, you can request a 90 day extension while trying to figure out what is the best path for you.

Dealing with the death of one’s Mother is never easy. You have to act somewhat quickly when a reverse mortgage is on the property, but with an extension, you can relieve some of the pressure when making the right decision for you.

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This Saturday hear
Nancy Hecht CFP® and
Joe Bert CFP®
co-host our program
“On The Money”!

They’ll be discussing . . .
• Affordable Health Care? How this may impact your retirement planning.
• Listener Question: Q: Should I pull $200k from my 401k to pay off my mortgage?
THIS WEEK’S “On the Money 101”:
What does “Years Certain Annuity ” mean?

Call or eMail
Your Questions:
407-290-0058 OR
1-800-328-5858
Nancy@FinancialGroup.com
Joe@FinancialGroup.com

Listen for details about
our upcoming workshops:

Countdown to Retirement
Saturday, April 26, 2014 – 11:00am – 1:00pm
Hosted By: Roger Johnson CFP® and
Estate Planning Attorney Jodi Murphy, J.D.
A light lunch will be served

Social Security Boot Camp:
Claiming Strategies
Thursday, April 24, 2014 – 6:00pm – 7:30pm
Hosted by: Nancy Hecht CFP®
and Denise Kovach CFP®

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