Is something going wrong if your IRAs aren’t making as much as you think they should? Or, how can you save for an upcoming wedding? David answers four questions from the mailbag.
(Click the featured times below to jump forward in the episode)
David gets all sorts of investment questions from clients every day. Today, he answers four listener questions from the mailbag. Do you relate to any of these situations?
Jerry has two daughters and foresees weddings in the near future. How can he save for these weddings? David has three daughters and can relate. While you might not know just how much these weddings will cost, you do want to set that money aside. If it’s in the next 12 months, is it worth putting money for it into the stock market? It comes down to time horizon and your willingness to take risk. Most people feel good about winning but hate losing.
Kate has a catch-22! She has some Apple stock she’d like to sell but is worried about the tax bill. Which is more important, capturing the gains or keeping her taxes low? David explains some of the tax rates and what you might have to pay.
Alec says their IRAs don’t seem to be making much money. Is the broker not paying attention to their accounts? David says to find out what your broker knows about your risk tolerance. Are your returns underperforming because they have you at a moderate risk tolerance? Have a conversation with your broker to find out what they say and make sure you’re on the same page.
Michael is tired of keeping up with all of the different statements from past 401(k) accounts. Can he combine them and should he? David asks if they are all traditional 401(k) or Roth 401(k) accounts. Having them combined will help you better visualize them and understand the risk you are taking with them. Then when you’re retired, it will make it simpler to take out distributions from one place. David shares the one time there’s an exception to this advice.
Listen to the entire episode or skip ahead using the timestamps below.
[1:02] – It’s mailbag time!
[2:03] – Mailbag: How should we save or invest for a wedding?
[5:49] – Mailbag: Should I sell stock or keep my taxes low?
[9:29] – Mailbag: Why aren’t my IRAs making much money?
[12:02] – Mailbag: Can I combine my old 401(k)s?
“Anybody worth working with is going to want to have that conversation with you and get it figured out, because we all like happy clients.”
– David Dickens
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