66

Do they want your help? Many times parents have difficulty taking advice from those whose nose and butt they wiped. Your accomplishments and investments are independent of the fact. What are their needs? They likely have social security and is that meeting their needs now? What happens after dad passes? Coming up with solid numbers is an important step ...


58

Nobody ever got to retirement age and said "Wow, I saved too much". Your wealth has a direct effect on your quality-of-life in retirement - how much you travel, whether you go to movies vs. the opera, for instance. Near to endlife, it decides how good your situation will be: the quality of your independent living, assisted living, skilled nursing or ...


46

Probably they shouldn't be investing. It's too late for that. And if they aren't investing it's pretty simple: Sell the big property before they urgently need the money because that takes time, then pay off the mortgage on the other house because the mortgage only costs money and they probably can afford to pay it off. In that order so they always have some ...


43

In the US, "Traditional" retirement accounts are generally subjected to something called Required Minimum Distributions (RMDs). For clarity, a "traditional" account is one where there is a tax benefit confered on contribution to the account, but distributions from the account are subject to tax. RMDs exist to force taxable events on these retirement-type ...


26

Explain to your parents what a fiduciary1 is. Tell them that no matter how much they like this guy (gal?) they should only invest with someone that they have a fiduciary relationship with - because they only have one shot left and it needs to be the best thing for them. Steer them to someone who is a certified financial planner or any other ...


23

Let me focus on the retirement number. I wrote a blog post on just that, The Number. In which I offer an easily editable spreadsheet to help users see if they are on track. With a goal of having 20X one's final income(1) at a retirement age of 62, at age 40, you should have just over 5X your annual income saved. If your income is $70K or less, you are doing ...


16

You asked two questions. First, I understand that lenders cannot discriminate based on age, but is there really a data to support that lenders do not do that ? Considering your United States tag, it's worth noting that the Equal Opportunity Credit Reporting Act, the Fair Housing Act,and the Home Mortgage Disclosure Act were intended to prevent ...


15

In the USA, you must take a Required Minimum Distribution (RMD) from your (traditional IRA, 401k, 403b) retirement account starting at age 70.5. If all of your retirement investments are in stock, then you will need to sell stock and move it out of the retirement account (or possibly transfer some of the stock out of the retirement account). Your financial ...


13

I am 56. One year ago, I applied for a HELOC. The terms were 15 year draw, and then a 10 year amortized payoff. In effect, a 25 year loan. I started the conversation (all done over the phone, not live) by saying I was retired, and had no W2s to offer. I was nearly instantly approved, the bank did do a drive by appraisal, and that was it. Ignoring the ...


9

Remember that mortgages are secured loans. Most 30-year mortgages are paid off early when the homes are sold in less than 30 years. So the expectation that the borrower is going to make the last payment 30 years later is not part of the equation. The lender mainly cares whether (1) the borrower can currently afford the monthly payments and (2) the down ...


9

The IRS mandates a Required Minimum Distribution from IRA, 401(k) and 403(b) accounts once you reach a certain age. The quoted pundit says Boomers will be thinking ‘I’ve got too much equities,’ which they do have. All these Boomers allegedly selling a mandatory chunk of stock is what is supposed to make the market drop. It's a reasonable hypothesis, but ...


8

What do you Want from your Money? I hate to answer a question with a question, but really we don't have enough information to tell you if you are "saving too much." Do you want to retire early? You might not be saving enough! Do you want to put your kids through Ivy League college debt free? Maybe you need to shift some of your future savings to a 529 ...


7

A typical "friend who wants to help them with investing" is actually out for himself. The most benign way this occurs is the "friend" recommends them into annuities and load mutual funds that pay him a gigantic commission, at the expense of the value of the investment. For instance I found a Florida investment "counselor" had put my parents into a ...


7

As @BenVoigt alluded to in the comments, you need to look at the portfolio for the fund in question. VFIFX specifically has the following breakdown of funds: Total US Stock Market (VTSMX) - 54.4% Total International Stock (VGTSX) - 35.6% US and International Bonds - 10% The 10% allocation to bonds would cause a slight lag in the growth of VFIFX compared to ...


6

Every mortgage bank in the country is required to send the government information about every loan application they take, every decision they make, and the demographic characteristics of every borrower (or potential borrower) as part of HMDA (Home Mortgage Disclosure Act). All that data is publicly available and the government itself uses the data to ensure ...


6

I would argue that in a world of compounding interest, that is, where time beats interest rates (as long as your investment vehicles don't fail to beat inflation) there is no such thing as "saving too much". Without knowing your goals (maybe you're up to an early retirement?) it is impossible to tell. I have around 30k in a regular savings account along ...


6

In my opinion it's not possible to contribute too much to a 401K. (Unless you don't have enough money left over to pay your bills.) The max you can contribute in 2020 is $19,500. The main reason to contribute to a 401K is because of the tax savings. You can choose to put money into a traditional 401K and pay less taxes this year by deferring that tax, and ...


5

Don't make it too complicated, the $500 bump is for inflation and it's not every year. Just ignore it and do all your calculations in real dollars. That will also give you the current value of what the future money is worth. Note that a million dollars in 40 years will buy much less than it will today. For 2019 it's actually $6000 to start and the return ...


5

Are there any restrictions on the types of the accounts that can be rolled over? Yes only qualified accounts can be put into a rollover. Is there a limit to the number of accounts that can be rolled into a single IRA (whether all at once or over the lifetime of the IRA)? No. Is there a limit to the number of times accounts can be rolled over (...


5

This is a complicated tax issue that has a lot of implications. The draw to retirement accounts is preferential taxation. But preferential taxation assumes other jurisdictions will honor that preference. You have various citizenships or work visas. You need to understand what obligations those citizenships place on you to report income and pay taxes. A ...


4

As a US citizen formerly living in the Netherlands, I looked into some aspects of this. The short answer is that it is extremely complicated and full of potential pit falls. Your best bet is to find a unicorn tax adviser who is familiar with the ins and outs of each of the three locations. Finding ones with knowledge of the US and the Netherlands is not ...


4

I can just buy some index fund shares and sell them at any time in case I need some money, right? If this is your investment goal, pension products (regardless of whether they are private or subsidised) don't suit you. Pension products like Riester or Rürup (and other products insurance companies can sell you) should be held until you go into retirement. ...


4

I have no idea about retirement in Japan, but.... In the US you can have retirement accounts that actually contain your own money. That tends to not be the case in Europe. In Europe you get retirement insurance taken out of your pay and then you get paid in retirement depending on how many years and at what salary you worked in the country. Seeing how you ...


4

At this point investing is too late. After being in a similar situation and hiring an elder care lawyer my self, here's my advise. If you had 5 years of good health on parents part you could put all there assets in a trust and protect them, but this doesn't seem like a viable option. You probably want an eldercare lawyer. As they age taking care of the ...


4

Spreadsheets are really handy for this!! I calculated my hypothetical initial retirement budget based on my current budget adjusted for: what my father currently pays for Medicare Advantage (we're in the US), what expenses I think might disappear, what new expenses I think might appear, how taxes are calculated, years until retirement, and estimated ...


3

Given his TFSA is entirely maxed out, it is not necessarily true that he shouldn't contribute to his RRSP; the benefits will just be smaller than they would be under different circumstances. The benefit of an RRSP contribution today, is an immediate deduction from his income on this year's tax return. The penalty of an RRSP withdrawal in the future, is that ...


3

That's somewhat misleading. What is true is that age 70-1/2, they must start withdrawing a fraction of their traditional IRA, traditional 401K, 403B, etc. every year. This does not apply to Roth versions of these assets. However, this does not oblige a stock sell-off. Because nothing prevents the owner from simply selling the stock in the IRA, ...


3

You are correct. Better explanations of the 4% rule don't say "current expenses," rather they say expenses needed in retirement, expenses right before retirement, or some other wording to help address the issue you just highlighted. Simply applying the inflation rate for the number of years until retirement is probably a pretty good approach to keeping ...


3

Some points: When the company offers you a match, not contributing to your 401(k) is -- in no uncertain terms -- a pay cut. If this is your first home purchase then you'll be able to exclude $10K from the 10% penalty you'll pay on the 401(K) withdrawal. You'll have to pay income tax on the whole value of your 401(k). Thus, put aside 20-25% of the value of ...


3

Without the exact numbers, nobody can tell. Depending on their age difference, it can be advantageous to draw two independant payment, or tag one onto the other (take 'half of spouse'), or delay one and/or the other spouse's benefits. Without all the exact numbers, it is impossible to say which option is optimal. You can download a little program from the ...


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