Q: My husband and I would like your opinion on our current financial picture. We both turned 50 this year. We have a 17-year-old son who will graduate high school in May 2008. He works part-time and is low maintenance for us. He is undecided about college vs. the military. His grades and SAT scores could merit some scholarships, but I see school loans in his future if he goes the college route.
Act Now! Activate a FREE three days trial to FinancialServicesCrossing.com, because you know how important it is to know about all the jobs.
Our net monthly income is $6,500 (jobs and 17-year annuity), with expense payments (mortgage, utilities, vehicles, charity) at $3,500. We each contribute 15% to our 401(k)s ($15,000 year). We are paying an additional $2,400 a year toward our home mortgage balance.
IRA and 401(k) balances are $180,000. Our home value is $170,000, with a $110,000 mortgage. Savings at a local bank is $20,000. Your thoughts would be much appreciated. - L.D., by e-mail
A: Hold your current course and you'll be fine.
Here's the broad-stroke picture. First, your additional mortgage payment should have your mortgage paid off before you turn 65. Your current total savings of about $200,000 appears to be about two years of your gross income. It could grow, on its own, to about $800,000 over the next 15 years. Your $15,000 in 401(k) contributions could grow to another $400,000 if you earn 8%. And Social Security is likely to replace a bit over 40% of your combined earnings, or about $40,000 a year. (To get a less casual estimate, visit www.ssa.gov and use one of its calculators.)
Put it all together and you've got some margin for error. The big question is the quality of your 401(k) plan.
Remember, it is entirely possible for a working couple to start with practically nothing at age 50 and put themselves in good shape for retirement by age 65. In your case, your existing assets and established savings pattern give you a powerful running start.
Q: I have a traditional 30-year mortgage that has 25 years remaining. I went to an investment seminar this week about converting to interest-only mortgages. I am seriously considering converting, due to the tremendous tax advantages and the ability to set up a separate after-tax investment account to have my home equity invested in no-risk tax-free funds. Also, I'll have the flexibility to use that money if needed, for future emergencies (loss of job, illness, etc.).
What are your thoughts about the benefits of an interest-only mortgage vs. a traditional mortgage? - J.W., Rockwall, Texas
A: Interest-only mortgages can be good short-term tools for self-employed individuals who need working capital for their businesses. In that context, I think they can be used by mature, prudent and financially savvy individuals.
That's not a big group.
For the vast majority of homeowners, an interest-only mortgage is a really dumb idea.
Why? Because it is very beneficial to plan to have your mortgage paid off by the time you retire. Remember, the standard mortgage is for 30 years, and the vast majority of what you pay in the early years is just interest. For instance, if you took out a $100,000 mortgage for 30 years at 6.5% today, you would not have paid off 10% of the loan until November 2014. That's just more than seven years from now. While paying down that $10,000, you would have paid $44,976.91 in interest.
(You can check this out and experiment with the impact of additional principal payments by using the mortgage calculator on the Bankrate.com Web site. Here's the link: www.bankrate.com/brm/mortgage-calculator.asp.)
When financial advisers tell you they think your mortgage payment money should be invested in "no-risk tax-free funds," they are about to sell you a cash value life insurance policy, and they will be the biggest beneficiary because they will earn a large commission. Remember, if you pay your home mortgage down or off, you can always have a home equity credit line up to $100,000 to deal with emergencies.
When push comes to shove, it is very, very difficult to beat the benefit of owning your house free and clear because it is delivering genuinely tax-free income in the form of housing services. You will be receiving those services whether your house is financed or not, but the cash flow requirements of financing can be a major burden.
(Questions about personal finance and investments may be sent by e-mail to scott@scottburns.com or by fax to 505-424-0938. Check the Web site: www.scottburns.com. Questions of general interest will be answered in future columns.)
COPYRIGHT 2007 UNIVERSAL PRESS SYNDICATE
This feature may not be reproduced or distributed electronically, in print or otherwise without the written permission of uclick and Universal Press Syndicate.
Jamie , Pueblo West, CO
EmploymentCrossing is a very user friendly website and has a fantastic search engine. I always got quick responses to my search criteria.
Keith , Staten Island, NY
EmploymentCrossing's search engine is excellent. You can search jobs on the basis of specific locations and practice areas.
Carolyn , Harrisburg, PA
I would definitely like to join EmploymentCrossing again if I need to switch my job in future. It was a lot more helpful compared to other websites.
Meg , Oak Park, IL
The email alerts sent by FinancialServicesCrossing are cool. I got a job through this feature of the website. Thanks!
Derek , Arlington, TX
I got a job through FinancialServicesCrossing. It was very helpful as I could focus towards the particular listings I wanted.
To compare FinancialServicesCrossing with other job sites
Bring Order and Structure to Your Financial services Job Search
You have perseverance and can accomplish anything you put your mind to and finding the ideal financial services job is no exception. We have a tradition of helping our members accomplish anything they set their mind to. With complete information about every financial services job in the market at your fingertips you are going to go far.
You have very high standards for the sort of employer you are working for and also for yourself. You are not afraid to work hard to fulfill your duties because you value security and peaceful living. We give you the tools to pursue your dreams for you and your family.
Become part of a tradition of research excellence that has elevated the careers of countless financial services professionals just like you.
Complete the sign up process today and become part of our site today.
Tell us where to send your access instructions:
Total Jobs on FinancialServicesCrossing
118,292
New Financial Services Jobs This Week
30,007
Jobs on EmploymentCrossing Network Available to Our Members
Area Director, MSO Network Operations United States-FL-Miramar
Humana Inc., headquartered in Louisville, Kentucky, is one of the nation's largest publicly traded health benefits companies. Humana offers a diver...
Sovereign bank jobs are easily among most preferred job options for those looking for bank jobs. Sovereign bank careers offer vertical promotion opportunities and lifelong employment for those who prefer to stick to a single employer throughout their careers.
See Every Financial Services Job We Can Find on the Internet!
Unlike other sites, FinancialServicesCrossing works for you and does not charge employers to post jobs and actually goes out and researches jobs for you. The jobs you see are the jobs we find for you and not the ones employers are paying us to post.
To compare FinancialServicesCrossing with other job sites
Top 101 Reasons to Sign Up for FinancialServicesCrossing
Reason 24: Your competitors will find job openings online or in newspapers only if the employers have actively advertised. FinancialServicesCrossing tells you about job openings whether employers want us to or not.
Bring Order and Structure to Your Financial services Job Search
Start doing things the way they should be done.
Make objective career decisions with unbiased research, facts and information about financial services jobs. Your perseverance, follow through and dependability will all pay off when you have access to:
Financial services jobs from every company employer career webpage we can find.
Financial services jobs from every professional job source we can find.
Financial services jobs from every job board we can find.
Financial services jobs from every newspaper classified ad we can find.
Financial services jobs from every specialized financial services publication we can find.
Financial services jobs from every federal, state and local government career page we can find.
Financial services jobs from every public interest, nonprofit and other career page we can find.
Tell us where to send your access instructions:
Today at FinancialServicesCrossing
5,800 - Jobs found in last 24 Hours30,007 - Jobs found in last 7 Days118,292 - Total Jobs Found
Your privacy is guaranteed. We will never give out, lease, or sell your personal information.
FinancialServicesCrossing - #1 Job Aggregation and Private Job-Opening Research Service — The Most Quality Jobs Anywhere
FinancialServicesCrossing is the first job consolidation service in the employment industry to seek to include every job that exists and not charge employers to post jobs on its site.
FinancialServicesCrossing uses sophisticated technology and manual work to comb employer websites and other job boards for jobs and bring them all to its site.
