Archive - August 2011

529 plans are one of the most popular investment vehicles for junior’s college because of their tax-deferred savings, but are they truly all that they are cracked up to be?

According to Tom Posey, CFP®, the biggest catch with a 529 plan is that if the money is not used specifically for educational expenses, your investment earnings are not only now subject to your regular income tax, but also an additional 10% penalty.

And what if your child doesn’t even attend college?

Then you have a lot of money in a 529 plan that if withdrawn for non-educational expenses, is …

There’s something magical about reaching the $1M mark for your retirement. Although $1M isn’t quite what it used to be, it will still afford many a very comfortable retirement.

While it sounds like a nice number to reach, how exactly do you get to $1M by age 65?

Timing Matters:

Assuming your investments average a return of 6% per year and you started saving at age 25, you need to save $6,461 each year (or $538 per month) for 40 years. If you are like most and waited until you were age 35, you would need to save $12,649 each …

Today, millions are deep under water on their homes and the probability of getting back out of this whole for many seems highly unlikely.  In this scenario, when does it make sense to just “walk away”?

Cathy Curtis, CFP® says it may make sense to walk away from your mortgage when one or more of the following are true:

• The value of your home is way less than the mortgage balance
• You do not have sufficient equity in the house to refinance to lower rates
• The rent you receive does not cover your mortgage expenses
• Selling is not a viable