Below is a transcript of the recent 'Retirement: Saving,spending, planning' online chat conducted March 31st onWAVY.COM.
Brooks KXAN: Hi, and welcome to Part II of our retirementchats! We'll start in three minutes.
Melissa Schenker, Work/Life: Hi. Ready when you are.
Brooks KXAN: Hi there! We have a financial expert joining ushere in a few minutes - Jayne de Vincenzo - she's been here before,but it's been a while!
Jayne Di Vincenzo, Lions Bridge Financial: Good afternoon!Looking forward to hearing what concerns and questionsviewers/participants have!
Brooks KXAN: Hi everyone! Thanks for being here! We have ourfinancial expert Jayne from Lions Bridge, and our moderator/careercoach/life coach Melissa Schenker from Work/Life Austin. Thanks forjoining us everyone!!!
At what age do you plan to retire?
( 11% )
( 11% )
( 44% )
( 33% )
( 0% )
( 0% )
Melissa Schenker, Work/Life: Glad to be here, and glad youcould join us Jayne. Last week's conversation generated a lot offinancial questions.
Brooks KXAN: Last week, we talked about preparing your mindand life for the transition into retirement. THIS WEEK - we look atthe money.
While we wait for our first readers to start commenting withquestions, I'll start by posting some questions that came up lastweek....
Brooks KXAN: Here's one: "I am in my early 30s and amdefinitely worried about having enough retirement - already. Whatis the estimated amount a person retiring in approx. 30 yearsshould have saved to retire 'comfortably'?"
Jayne Di Vincenzo, Lions Bridge Financial: The answer dependson several things...;
Jayne Di Vincenzo, Lions Bridge Financial: Depends on how youplan to spend retirement-- at home, traveling, starting a smallbusiness.
Jayne Di Vincenzo, Lions Bridge Financial: Recentcalculations/estimates indicate that folks now in their 30s and 40s(depending on their goals and if have college to pay for) should besaving more like 18-24% of their incomes..
Jayne Di Vincenzo, Lions Bridge Financial: NOT just the old10% or just the minimum-- a company match only.
JackieKXAN: CNN Money provides a nifty retirement planner!Check it out:http://cgi.money.cnn.com/tools/retirementplanner/retirementplanner.jsp
Jayne Di Vincenzo, Lions Bridge Financial: Most folksretiring now need to have 1,000,000 in vested to give them $50k ayear spending money (spending off just 5% a year so the portfoliolasts). Obviously, the more you hope to spend in retirement thebigger that number should be.
Brooks KXAN: That's $1m?
Brooks KXAN: Yikes.
Brooks KXAN: Here's another from last week: Retired Govt:
We sold our where we lived and put it in savings. It isenough to cover our house we purchased a few yrs ago in Tx. Shouldwe use that money to pay our house we now live in retirement.
Jayne Di Vincenzo, Lions Bridge Financial: NEVER walk awayfrom free money at work. If your company matches (as most plans donow), you need to contribute as much as you can to the 401K thereand get ALL the match dollars.
Jayne Di Vincenzo, Lions Bridge Financial: If you use ALLyour money to pay off your house, what will you live on??
[Comment From GuestGuest: ] Ha... I had 38K towardretirement... I retired last year at 65 and guess what? It wasnearly gone. I only got 17K.... So what is the sense of investing?I should have put that $100 a pay into the bank and I'd still haveall my money.
[Comment From MandiMandi: ] I guess I'll be the first to posta question. :) My hubby is retiring from the Navy in July and iscurrently working on entering into a Navy civilian career. We areboth in our late 30s, & I participate in a SEP retirement planthrough my work. We have 2 kids, 16 & 10 and a baby due in Aug.Since we already have one retirement pension 'in the bag' per say,at what age should we expect to retire comfortably?
Jayne Di Vincenzo, Lions Bridge Financial: Mortgage rates areat HISTORIC low levels. Right now HELOCs and Mortgages are in the4-5.5% range. After deductions on your returns, you're reallypaying about 2% LESS than mortgage rate.
Brooks KXAN: Applause to Mandi and Guest! Thanks for chimingin.
Brooks KXAN: Jayne - guest has a great question. Lots ofpeople saw their 401K shrink in the last couple of years - ishe/she right? Is it lower risk/ better return to just stick thatmoney into an account?
I'll make this observation - you don't get the free cash fromwork if you do that, do you?
Jayne Di Vincenzo, Lions Bridge Financial: To $38k Person. Ifthat's all you had, you should have NOT been invested int hemarkets most likely. And, unfortunately, sounds like you got out atthe bottom-- Feb or early March 2009. If you'd stayed in the marketyou'd probably have gotten back most of what you lost on paper.
Jayne Di Vincenzo, Lions Bridge Financial: Hi Mandi, youshould save aggressively if you manage to get two incomes fromspouse and your income. This could allow you to retire muchearlier.
[Comment From GuestGuest: ] I didn't get anything from mywork... I worked for the State.
Brooks KXAN: ah, ok. gotcha
Jayne Di Vincenzo, Lions Bridge Financial: Mandi, "Pension inthe bag"-- that money may not grow as fast as inflation and may notbe enough to support the type of lifestyle and retirement you hopefor. Do you plan to pay for college for your children? Is that asavings goal?
Are you currently contributing to a 401K?
( 83% )
( 17% )
I would, but we don't have one
( 0% )
Jayne Di Vincenzo, Lions Bridge Financial: Many STATES offerPENSIONS if you work long enough. Have you checked the web site andtalked to your HR person?
Jayne Di Vincenzo, Lions Bridge Financial: Many states andmunicipalities also provide the opportunity to participate in 457plans that are like 401K plans... you defer some of your money andin most cases, the states DON'T Match.... but some may. See your HRbenefits person.
[Comment From GuestGuest: ] Stay in the market? But the moneywas for retirement and I saw it shrinking and panicked... I needthat money to pay off my house.... by the time I cashed it in andthe government took their share I was left with only 17. Easy tosay keep it in, when you need it and the purpose was retirement.
[Comment From MandiMandi: ] The grandparents have the collegefund setup.
[Comment From GuestGuest: ] I just want to warn people aboutfinancial investing because I lost mine and it could easily happenagain. What there should be is an insurance against losing itall... I have a pension but I still lost my investment.
Jayne Di Vincenzo, Lions Bridge Financial: For SHRINKING--Again, shouldn't have put money at risk in first place, youprobably would have been able to protect a lifetime income stream alittle better with an annuity that offered LIVING INCOME benefitsthat are guaranteed. Must see prospectus to do and see if right fitfor your situation.
Melissa Schenker, Work/Life: Jayne, Can you provide a littlebit more info on annuities and how they work, what options theyprovide?
[Comment From ScottScott: ] I'm debating now between puttingaside 'extra' money toward a college fund or creating a retirementaccount. Both I and my spouse have 401Ks and she has a smallpension, but I don't think it will be enough. We've heard theargument "you can't take out a loan for retirement, but you can foreducation". Do you agree?
Jayne Di Vincenzo, Lions Bridge Financial: I'm biased ofcourse, but I don't operate on myself (I'm not a surgeon) and Idon't write prescriptions for meds (not a doctor), if you'reserious about retiring, investing appropriately, interview 3 or sofinancial advisors and find one you like who listens to you. Toomany investors go it alone and make huge (often EMOTIONAL)decisions that sabatoge their NEST EGS.
Jayne Di Vincenzo, Lions Bridge Financial: Hi Scott, verycommon question. Yes, loans are an option and often a very sensibleone for college.
[Comment From JohnJohn: ] You talk about 18-24% savings(invested)...how do you do that when you're trying to pay billsyou've had since before you had to take a pay cut from the economyand don't have the option to sell your house to even downsizebecause the market is so bad?
Jayne Di Vincenzo, Lions Bridge Financial: JOHN: Save whatyou can each pay day. If it's only 10%, then do that, and perhapswhen your personal situation improves then you can bump up savings.
Melissa Schenker, Work/Life: Jayne - Do you have suggestionsabout what one should ask when interviewing financial advisors?
Jayne Di Vincenzo, Lions Bridge Financial: SCOTT: Good you'reputting aside 401K money-- I think that retirement is a veryimportant goal to save for and college secondary--afterall, wedon't want to move in with our kids because we didn't save enough!
Brooks KXAN: Lots of us are in that same position, John -I've always been taught (no expert here, just family teachings) toPAY MYSELF FIRST out of every paycheck - even it's $25 - to putinto savings. It adds up and keeps the habit going, is what I'vefound out.
Jayne Di Vincenzo, Lions Bridge Financial: SCOTT: Withoutknowing your specific situation, all the figures and college goalsI can't advise specifically. But in geneeral the 529 CollegeSavings Plan is a great vehicle to save for college costs in. Haveyou checked that out?
[Comment From MandiMandi: ] Thanks Jayne. Any certainpercentage or amount we should aim for? The earlier retirement agethe better, obviously. But it will be tough since we have a newbornentering the picture in August.
Jayne Di Vincenzo, Lions Bridge Financial: MANDI, if you wantto replace the income you have now, for example, $80,000 a yearbetween you both, and his pension is $30k of that, you need to savewith an eye toward replacing the $50k difference. Again, I can'tgive specifics without knowing your whole picture.
Jayne Di Vincenzo, Lions Bridge Financial: MANDI and OTHERS:Pay attention to your social security statements--- make sure theannual income matches what was on your tax return/reported income.
Jayne Di Vincenzo, Lions Bridge Financial: Be sure to alsoREAD the first page of your Social Security statement... currentlySocial Security is funded through 2017 and expected to be out ofmoney if Congress doesn't act to fix, in 2041.
Brooks KXAN: Dumb-ish question - for those of us who havenever looked at them, how do we find them?
Brooks KXAN: Great.
JackieKXAN: All about social security statements:http://www.ssa.gov/mystatement/
Jayne Di Vincenzo, Lions Bridge Financial: Go to www.SSA.govand request a statement and they have a great calculator to seewhat your anticipated benefit would be.
Jayne Di Vincenzo, Lions Bridge Financial: For COLLEGESAVINGS Info go to: http://www.savingforcollege.com/ they have alot of info on 529 Plans so you can compare.
[Comment From MandiMandi: ] I do get what you are saying.Thanks.
Brooks KXAN: From Bella, last week: "I'm a little worriedabout the transition. For example, will I have enough money? ShouldI stay in the house I'm in or move to a smaller apartment for one?Very confusing stuff, eh?"
Jayne Di Vincenzo, Lions Bridge Financial: BELLA-- Shedefinitely needs to talk to a financial advisor. If she doesn'tknow the answer how can she even consider retiring?
[Comment From GuestGuest: ] Jayne, if I have a large creditcard debt, doesn't it make sense to put as much money toward thatfirst -- before investing in my future?
Jayne Di Vincenzo, Lions Bridge Financial: BELLA: She needsto look at what the expenses she'll have in retirement are and whather income sources are. If she's going to be short money everymonth staying where she is, downsizing might be the smartest thingto do.
Jayne Di Vincenzo, Lions Bridge Financial: Credit Card GUEST:Credit cards can be like a bad habit-- smoking, over eating,gambling...
Jayne Di Vincenzo, Lions Bridge Financial: I've seen folkstake money from their homes (cash out refinance) pay off creditcards and then GET BACK INTO DEBT a year later.
Jayne Di Vincenzo, Lions Bridge Financial: As a result Ithink you/most people should do both-- pay yourself and pay yourdebts down. That way you're building your net worth each month bylowering debts and increasing your savings. Again, don't know yourentire situation so can't say exactly, but in general this is agood idea.
[Comment From GuestGuest: ] Jayne, would you recommendinvesting in your husband's book, "Buy Ketchup in May and Fly atNoon?"
Jayne Di Vincenzo, Lions Bridge Financial: Hey BUY KETCHUP INMAY, FLY AT NOON guest: OF COURSE! It will save you money, makeyour smarter and save you time! :) And of course, I think it's agreat read!
Jayne Di Vincenzo, Lions Bridge Financial: See my husband/hisbook at http://www.buyketchupinmay.com. OK, done with the plugs!
Jayne Di Vincenzo, Lions Bridge Financial: Do you know what aROTH IRA is?
Brooks KXAN: CAN'T HAVE TOO MANY PLUGS. and while we're atit, Melissa Schenker is at www.worklifenow.com
Brooks KXAN: Wow, buy ketchup in May? Had no idea.
[Comment From GuestGuest: ] Are vacation homes with goodrental possibilities still a good investment?
Jayne Di Vincenzo, Lions Bridge Financial: We get a tax breakfrom the IRS this year-- you can convert your TRADITIONAL IRA to aROTH IRA and push the taxes owed to paying in 2012 and 2013!
Jayne Di Vincenzo, Lions Bridge Financial: REAL ESTATE TYCOONwith RENTAL: CAN be a good investment-- obviously depends on thecash flow-- did you over pay/get a good deal? What's your monthlypayment? Condo fees? Maintenance? Can you realistically rent itout?
[Comment From davdav: ] I lost my job how can I put money aside for 401K?
Jayne Di Vincenzo, Lions Bridge Financial: There are somegood breaks for owning/renting real estate. Would be good to talkto your tax advisor/CPA before buying if you're doing for taxreasons.
Brooks KXAN: I don't know what an IRA is but I'm guessing idon't have one.
[Comment From GuestGuest: ] If someone wins the lottery,should they take the lump sum or the annuity? What are the pros andcons?
Jayne Di Vincenzo, Lions Bridge Financial: If you're out ofwork you CAN'T CONTRIBUTE to a 401(k). That's only for currentemployees of the company sponsored plan.
Jayne Di Vincenzo, Lions Bridge Financial: LAID OFF: You cancontribute up to $6k a year to a TRADITIONAL or ROTH IRA if you'reover 50, if under 50 then $5k.
Jayne Di Vincenzo, Lions Bridge Financial: LOTTERY WINNER:LUMP SUM-- IF you can trust yourself/your advisor to come up with abetter income stream than the lottery offers you. UnfortunatelyI've seen lottery winners (BIG WINNERS) spend and give it all awaywithin just a few years and then they are broke again.... SAD!
[Comment From davdav: ] Ok I will look into an IRA, Thanks
Jayne Di Vincenzo, Lions Bridge Financial: DAV-- You can rollyour employer sponsored 401K fund into a Traditional IRA andcontrol/manage the funds or have your advisor help you invest them.Depending on the plan the fees in a 401K can be hefty.
Brooks KXAN: Another question from last week: "Have you heardof a government plan called "Guaranteed Retirement Account" orUniversal 401k?"
Jayne Di Vincenzo, Lions Bridge Financial: LOTTERY: Mostlottery winners have NOTHING LEFT after just 18 months!
Brooks KXAN: So someone who is likely to spend it shouldprobably get the annual payments instead, huh?
Brooks KXAN: <---- pipe dreamin'...
Jayne Di Vincenzo, Lions Bridge Financial: I met aprospective client who went through $8 Million in a very short timeperiod-- relatives and "friends" came out of the woodwork!
Brooks KXAN: oh man. awful.
Jayne Di Vincenzo, Lions Bridge Financial: Brooks: When youwin the lotter you better call me and I'll help you make sure thatit lasts your life time and longer!
Brooks KXAN: 15 more minutes let for questions!
Brooks KXAN: You got it! I'll go to you for financialplanning and Melissa to make sure my head stays in check.
Brooks KXAN: I PROMISE I'LL BE THE SAME NICE PERSON I'VEALWAYS BEEN! I won't let my riches change me.
Melissa Schenker, Work/Life: Brooks - Good thinking!
Brooks KXAN: LOL another word for it: WISHFUL thinking.
/Gotta play to win.
[Comment From GuestGuest: ] As for the Social Security goes,they want to control us. I was on SSD and needed money to pay of my47,000 dollar teen crdit card debt. Once I started to work theytake me off. I go stop work and they pay me to watch tv at home anddo nothing. Should we make the money or take the governments moneyand put this country deeper in DEBT?
Brooks KXAN: Aaaand now we're getting political :)
Jayne Di Vincenzo, Lions Bridge Financial: SOCIAL SECURITYGUEST: I'm not sure WHAT you're asking! Sorry!
Brooks KXAN: I think guest is asking what your politicalposition on social security is. PASS.
Jayne Di Vincenzo, Lions Bridge Financial: Did you rack up$47,000 in debt and then sit at home? If so, should be ashamed ifit was on luxeries/trivial stuff. Different story if for medicalbills or something serious.
Brooks KXAN: :) Nothing personal, but we're here to talkabout personal financial planning! Got something more along thoselines?
Brooks KXAN: *crickets*
Brooks KXAN: Let's get back to this one, Jayne:
Another question from last week: "Have you heard of agovernment plan called "Guaranteed Retirement Account" or Universal401k?"
Jayne Di Vincenzo, Lions Bridge Financial: Having a WRITTENRetirement Income Plan is key to successfully planning for it.Without a written strategy and savings strategy and investingstrategy it's like going on a road trip to ALASKA without a GPS orroad map! We'd never do that!
Are you in debt?
( 0% )
( 100% )
( 0% )
[Comment From PeterPeter: ] Social security disabilty is whatI was on due to birth of epilepsey and 2 Brain surgeries in 86, 87at Boston Childrens Hosp MA. Removal of 55% of my brain was alldead tissue. Making me frederal developmental Disabled. However Iam normal and walk norm speak normal. It is a hidden disability
Jayne Di Vincenzo, Lions Bridge Financial: Americans (andmaybe the world) spend more TIME planning VACATIONS than theirretirements! Probably not a shock!
[Comment From PeterPeter: ] The government says they are indebt. Let us disabled work and make christmas, birthday money forgifts money
Brooks KXAN: I see. The issue is that if you work, you loseSSD benefits. Is that what you're saying?
[Comment From patpat: ] How do you find a good financialadvisor for rtirement planning?
Brooks KXAN: Pat's question speaks to melissa's earlier -what are some good questions to ask a potential financial adviser?
Jayne Di Vincenzo, Lions Bridge Financial: 1) How long haveyou been in the business (you'll be surprised by some of theanswers!-- like 1 year, etc....)
Jayne Di Vincenzo, Lions Bridge Financial: 2) How do you makeyour recommendations? What research/sources do you use?
Jayne Di Vincenzo, Lions Bridge Financial: 3) How do you getpaid?
Brooks KXAN: Five more minutes, guys! Get your questions in!
Jayne Di Vincenzo, Lions Bridge Financial: 4) Ask yourfriends for referrals. Then INTERVIEW. Don't make a snap decisionif you have a weird "vibe" like your name is Sam and he keepscalling you Ed, he's not listening.... listen to your instincts.
[Comment From patpat: ] Thanks for your advice and commentson all retirment planning issues!
[Comment From GuestGuest: ] I only have 3,500,000.00 setaside in a bank trust for retirement.
Jayne Di Vincenzo, Lions Bridge Financial: 5) Review therecommendations and hear how they explain them to you. If theycan't explain in laymens terms, maybe they don't understand theinvestment they are recommending themselves!
Brooks KXAN: Uh 3.5 million? WHY DOES THIS SOUND LIKE A HUGEAMOUNT TO ME?
Jayne Di Vincenzo, Lions Bridge Financial: I think someone iskidding.... :)
Brooks KXAN: Guest: Are you single?
Brooks KXAN: <==== gullible.
Brooks KXAN: I was remembering what you said about investing1m to have a $50k-a-year retirement lifestyle or whatever. OK.MOVING ON....
Jayne Di Vincenzo, Lions Bridge Financial: 6) Do they provideperiodic reviews-- I try to see my clients annually if theirsituation isn't complicated, but perfer to do reviews quarterly.
Brooks KXAN: Time to wrap it up, everyone! That went quick!Thanks so much for all your questions, and to Melissa for helpingmoderate this week - and parrticularly to Jayne for her incrediblyhelpful information.
Got any closing thoughts you guys?
[Comment From patpat: ] I'M SINGLE!!!!!!!
Brooks KXAN: I'm not. GOTCHA!
Brooks KXAN: pat = gullible :) LOL
Brooks KXAN: :)
Jayne Di Vincenzo, Lions Bridge Financial: Marriage isn't agood savings plan, but STAYING married is! :)
Brooks KXAN: Did you hear that, JESSE JAMES?
[Comment From tanatana: ] some people find not gettingmarried would have saved them more! :)
Jayne Di Vincenzo, Lions Bridge Financial: I'm finding thatMORE and MORE of my clients are single... so most of us (52% ofhouseholds in US) need to plan to take care of their retirementplan on their own.
Jayne Di Vincenzo, Lions Bridge Financial: TANA-- SO True,Sorry Sandra Bullock!
Brooks KXAN: No. Kidding.
Jayne Di Vincenzo, Lions Bridge Financial: Thanks Everyone!Lots of fun. Appreciate the invitation to participate today!
Brooks KXAN: We want to thank our panelists and ourcommenters for some fantastic info! Always, you can come back andread this chat for hte links and advice - it lives here foreverright where you found us!!
See you next time!!!
OVER AND OUT.
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