Finance

Have Finance Questions? Ask a Financial Expert Online.

Ask an Expert,
Get an Answer ASAP!

Finance

I am 51 and live in California. My father recently passed

Customer Question
I am 51 and...
I am 51 and live in California. My father recently passed away and left me an inheritance. Initially, I am opening a beneficiary (inherited) IRA with $400,000. Additionally, my brother and I will split the proceeds from the sale of his house. This should give me an additional $500,000. I have almost nothing saved for retirement and I have 5 year old twins that I want to put through college. My current salary is $72,000 a year. Can you help give me an idea of how to invest to help my kids as well a secure a comfortable retirement.
Submitted: 1 year ago.Category: Finance
Show More
Show Less
Ask Your Own Finance Question
Answered in 9 minutes by:
1/5/2016
Financial Professional: Lane, JD, CFP, MBA, CRPS replied 1 year ago
Lane
Lane, JD, CFP, MBA, CRPS
Category: Finance
Satisfied Customers: 12,994
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
Verified

Hi - I hold a JD (Juris Doctorate, a doctoral degree in the law), concentration in Tax Law & Corporate law, an MBA (specialization in finance & tax), and BBA from Mercer University’s Stetson School of Business and Economics, as well as CFP® and CRPS designations.

...

Wow that's a pretty tall order ... what you're really asking for is a financial plan.

...

I'd be glad to help, (I use a financial planning package that allows the client to see the various outcomes of different scenarios and even play around with the what-if scenarios once the baseline plan has been established - on your end through a cloud based system) ...

...

But we'd need to do do what's called an additional services offer - where a private link here will allow us to share contact information ... that would be needed for the additional data gathering to facilitate this

Ask Your Own Finance Question
Financial Professional: Lane, JD, CFP, MBA, CRPS replied 1 year ago

The variables are, of course, WHEN to retire, How much income you want that retirement to "pay" you, How (at what rate) the investments need to be made, what kind of school costs your wanting to fund, life expectancy, how you're using your qualified plans at work if you have them, etc., etc

...

And of course these are all trade-offs (to some extent), opportunity costs, of each other

...

Then out of that MATH comes they types of ownerships that make the most sense (529 plans for the school funding ? - maybe) ... Roth IRA's can make sense as a way to get tax deferred growth on earnings but access the principal tax free for education funding along the way (because of the Roth ordering rules - principal out first)

...

Analysis of the options you have for taking distributions from the inherited IRA need to be analyzed as well (you can take the dollars out an pay tax - no 50 and 1/2 penalty for inherited IRAs - within 5 years OR you can take out over your OWN life expectancy to defer taxes) ... but that needs to be done within the parameters of your goals here.

...

This may BE excellent timing for dollar cost averaging that cash into the market for some of the longer term dollars (say over the next year) as we will likely see another very choppy flat to slightly down year like the on we had this year ... but as the uncertainly leave (political and global) - regardless of who wins elections, 2017 could be poised for a very good "snap back correction." ... so systematically moning into the market over a 52 week period could make LOTS of sense

...

but if you don't have the stomach for that, you certainly need to do the plan, the math (along with the estate planning, tax planning, and other ares a classic plan scrutinizes) because cash equivalents and even longer term bonds held to maturity won't get you there nearly as quickly... or generate as much coming back at you during retirement (all other things being equal)

Ask Your Own Finance Question
Financial Professional: Lane, JD, CFP, MBA, CRPS replied 1 year ago

We can also go at this in a much more general fashion, continuing here

...

Let me know

...

Even that shouldn't be done without some assumptions

Ask Your Own Finance Question
Financial Professional: Lane, JD, CFP, MBA, CRPS replied 1 year ago

Just to give you a feel for the math part ... I ran a very quick scenario with the following assumptions

Retirement Information and Assumptions

Your current age (1 to 120) ... 40

Current annual income ($) ... 72000

Spouse's annual income (if applicable) ($) ... 0

Current retirement savings ($) ... 500,000

Expected inflation (0% to 10%) ... 2%

Desired retirement age (1 to 120) ... 65

Number of years of retirement income (1 to 40) ... 20

Income replacement at retirement (0% to 300%) ... 75%

Pre-retirement investment return (-12% to 12%) ... 8%

Post-retirement investment return (-12% to 12%) ... 4%

Include Social Security (SS) benefits? ... Yes

Marital status (For SS purposes only) ... Married

Social Security override amount 0
(monthly amount in today's dollars) ($)

Ask Your Own Finance Question
Financial Professional: Lane, JD, CFP, MBA, CRPS replied 1 year ago

Sorry, looks like the formatting is not transferring but even at an 88000 retirement beginning at age 85 the balance (and again only used 500,000 as a starting point) .. the balance still grows to 6,430,581 by your age 85

Ask Your Own Finance Question
Financial Professional: Lane, JD, CFP, MBA, CRPS replied 1 year ago

Changing the returns to the other end of the spectrum (3%) the principal grows to a little over a million and does start to draw down as you start to take that same retirement amount and drops to 917,066 at your age 85

...

SO this tells us that give what you have to work with (if I'm even close on the age and retirement level desired) you DON'T have to be especially aggressive to fund both college AND retirement

Ask Your Own Finance Question
Financial Professional: Lane, JD, CFP, MBA, CRPS replied 1 year ago

AgeAnnual Salary Increasing @ 2%Beginning Retirement BalanceEarnings
Pre-Ret 3%
Post-Ret 3%Estimated Annual SavingsRetirement Income Replace
75%Annual Social Security IncomeAnnual Retirement Account WithdrawalEnding Retirement Balance

40$72,000$500,000$15,000$0$0$0$0$515,000

4173,440515,00015,4500000530,450

4274,909530,45015,9140000546,364

4376,407546,36416,3910000562,754

4477,935562,75416,8830000579,637

4579,494579,63717,3890000597,026

4681,084597,02617,9110000614,937

4782,705614,93718,4480000633,385

4884,359633,38519,0020000652,387

4986,047652,38719,5720000671,958

5087,768671,95820,1590000692,117

5189,523692,11720,7640000712,880

5291,313712,88021,3860000734,267

5393,140734,26722,0280000756,295

5495,002756,29522,6890000778,984

5596,903778,98423,3700000802,353

5698,841802,35324,0710000826,424

57100,817826,42424,7930000851,217

58102,834851,21725,5360000876,753

59104,890876,75326,3030000903,056

60106,988903,05627,0920000930,147

61109,128930,14727,9040000958,052

62111,311958,05228,7420000986,793

63113,537986,79329,60400001,016,397

64115,8071,016,39730,49200001,046,889

6501,046,88931,407088,59358,17930,4141,047,882

6601,047,88231,436090,36559,34331,0221,048,297

6701,048,29731,449092,17260,53031,6421,048,103

6801,048,10331,443094,01561,74032,2751,047,271

6901,047,27131,418095,89662,97532,9211,045,769

7001,045,76931,373097,81464,23533,5791,043,563

7101,043,56331,307099,77065,51934,2511,040,619

7201,040,61931,2190101,76566,83034,9361,036,902

7301,036,90231,1070103,80068,16635,6341,032,375

7401,032,37530,9710105,87769,52936,3471,026,999

7501,026,99930,8100107,99470,92037,0741,020,735

7601,020,73530,6220110,15472,33837,8151,013,542

7701,013,54230,4060112,35773,78538,5721,005,376

7801,005,37630,1610114,60475,26139,343996,194

790996,19429,8860116,89676,76640,130985,950

800985,95029,5790119,23478,30140,933974,596

810974,59629,2380121,61979,86841,751962,083

820962,08328,8620124,05181,46542,586948,359

830948,35928,4510126,53283,09443,438933,371

840933,37128,0010129,06384,75644,307917,066

Ask Your Own Finance Question
Financial Professional: Lane, JD, CFP, MBA, CRPS replied 1 year ago

Yes, thought Id try pasting that in ...but as you can see we need a different platform ... be glad to run some numbers for you and discuss the TYPES of investments and ownerships that can make this all work, but this venue is not best suited

Ask Your Own Finance Question
Financial Professional: Lane, JD, CFP, MBA, CRPS replied 1 year ago

Now, if you want to talk about running an actual plan we would use Monte Carlo and other probability based models to analyze best case, worst case, and probability of hitting various goals, based on various portfolios

Ask Your Own Finance Question
Financial Professional: Lane, JD, CFP, MBA, CRPS replied 1 year ago

... just re-read your original statement ... left all variables the same (in the very basic model I'm using HERE) changed current age to 51, and even then (all other things being equal, projecting a 3% return) the balance that started out at 500,000 ended up at 582,816, at your age 85

Ask Your Own Finance Question
Financial Professional: Lane, JD, CFP, MBA, CRPS replied 1 year ago

OK time for you to give me some feedback (refine what you're looking for here, in THIS venue, let me know if you'd like to pursue a more sophisticated analysis, which again would have to be done outside of this venue) ... or something in between

...

feel free to use examples

...

I'll be here

Ask Your Own Finance Question
Financial Professional: Lane, JD, CFP, MBA, CRPS replied 1 year ago

Hi,

...

Did you see my answer?

...

Sorry for the data dump, but there are really a lot of ways to answer that question.

...

If you'd like more simply to ask questions about types of accounts, types of investments, ways of owning these things, look at each goal independently, we can go at it that way as well.

...

let me know

...

Lane

..

Ask Your Own Finance Question
Ask Lane Your Own Question
Lane
Lane
Lane, JD, CFP, MBA, CRPS
Category: Finance
Satisfied Customers: 12,994
12,994 Satisfied Customers
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986

Lane is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Rakhi Vasavada

Rakhi Vasavada

Financial and Legal Consultant

2,608 satisfied customers

Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years

Megan C

Megan C

Certified Public Accountant (CPA)

2,218 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

Manal Elkhoshkhany

Manal Elkhoshkhany

Tutor

1,919 satisfied customers

More than 5000 online tutoring sessions.

JKCPA

JKCPA

CPA

844 satisfied customers

Bachelors degree and CPA with Accounting experience.

Eric

Eric

Financial Manager

559 satisfied customers

Loan servicing, counseling and real estate expert. Foreclosure Expert and Financial Planner.

R. Klein, EA

R. Klein, EA

Accountant

480 satisfied customers

TurboTax Expert. QuickBooks Certified Pro Advisor

Dimitry K., Esq.

Dimitry K., Esq.

Attorney

332 satisfied customers

NASD Licensed Rep, 1997-2001, Business Attorney

< Previous | Next >

Related Finance Questions
I have a self directed Roth IRA with TDAmeritrade, can I buy
Hello, I have a self directed Roth IRA with TDAmeritrade, can I buy and sell stocks without capitol gains, as long as I don't cash out or reinvest ?Thanks, Ken… read more
PDtax
PDtax
Owner
Master\u0027s Degree
1 satisfied customers
I had a question on moving an IRA account from a bank IRA to
I had a question on moving an IRA account from a bank IRA to a brokerage IRA. My uncle went to his local bank and let them know he wanted to move his account. They issued him a check but it's thebfina… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,581 satisfied customers
I inherited my father's IRAs. I have accounts with Fidelity
I inherited my father's IRAs. I have accounts with Fidelity and Schwab. One of my Schwab accounts is titled Inherited; the other is listed as a Roth. The Fidelity account is listed as an IRA. My quest… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
I have a question on SEP IRAs? i have income from both a
i have a question on SEP IRAs? i have income from both a single member LLC and straight up schedule C self employment income. … read more
abci168
abci168
Principal
27 satisfied customers
Please help, I have a seld-directed IRA and I have questions
Please help, I have a seld-directed IRA and I have questions regarding rollovers from my traditional IRA … read more
Chad CFP ®
Chad CFP ®
Certified Financial Planner(R), Pro
Master\u0027s Degree
847 satisfied customers
I have a roth ira account with a bank that i also invest
I have a roth ira account with a bank that i also invest money and buying stocks. I want to know if i can attach a credit card to that account so i can buy bigger quantity of stocks straight from cred… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
I am interest in having my client conversion of Trad IRA to
I am interest in having my client conversion of Trad IRA to Roth IRA. Does the transfer have to be in cash or can we transfer securities and current market value?This is how I do the client Trad IRA R… read more
TaxRobin
TaxRobin
Vocational, Technical or Trade School
1 satisfied customers
Quick Question on IRA withdrawals and deposits. Here is the
Hi. Quick Question on IRA withdrawals and deposits. Here is the scenerio: Withdrawals were made $3k/withdrawal for bills, etc., on the following dates: Nov 11, 2016 Nov 20, 2016 December 3, 2016Total … read more
TaxRobin
TaxRobin
Vocational, Technical or Trade School
1 satisfied customers
Ministers Retirement Plan. How is a Roth IRA setup for the
Ministers Retirement Plan. How is a Roth IRA setup for the pastor? Want tax free future income. What would be the best vendor to setup this account. Is there such an account under 403?… read more
TaxRobin
TaxRobin
Vocational, Technical or Trade School
1 satisfied customers
Is an individual retirement annuity considered an Ira?
Is an individual retirement annuity considered an Ira? Trying to help my mother move this to her IRA that she has at another institution. Never heard of the term before but it has the acronym of an Ir… read more
Mark Taylor
Mark Taylor
Certified Public Accountant
Masters
2,251 satisfied customers
Recently, my stepdaughter inherited a roth Ira from her
Recently, my stepdaughter inherited a roth Ira from her mother, in the amount of $34000. Her Adjusted Gross Income for this year if expected to be $20000. If she takes a lump sum payout this year, can… read more
TaxRobin
TaxRobin
Vocational, Technical or Trade School
1 satisfied customers
I have taken deep losses on my Roth IRA. Approximately 80%.
I have taken deep losses on my Roth IRA. Approximately 80%. I have read if I close the Roth IRA I can write off a portion of these losses. How does this work?… read more
Mark Taylor
Mark Taylor
Certified Public Accountant
Masters
2,251 satisfied customers
I have a self directed roth ira llc and am interested in
I have a self directed roth ira llc and am interested in coinvesting the funds with my personal funds to write a single note. I would like all of the returns on the note to go to the roth because of t… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
I made 2 $5500 contributions to my Roth IRA in Sep 2015. I
Greetings I made 2 $5500 contributions to my Roth IRA in Sep 2015. I just discovered the error and am trying to figure out how to fix the issue. I did not contribute anything to my Roth in 2016. … read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
How much % should I save in my 401K for Roth IRA & pre-tax
How much % should I save in my 401K for Roth IRA & pre-tax if I'm making $130K + per year to have the most efficient tax break?I also have a house which I can deduct the interest rate.… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
I am curious in investing with my Roth IRA. I have a few
I am curious in investing with my Roth IRA. I have a few questions. * I will need to set up a Roth IRA llc account, which depending on the state pay those state fees. Along with a bank account in that… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
Regarding my Roth IRA, on December 9th of last year my then
Hi, regarding my Roth IRA, on December 9th of last year my then LinkedIn shares were sold as I believe Microsoft bought them (bought the company LinkedIn) and I was provided a cashout that was put int… read more
ABC Accounting Group
ABC Accounting Group
Bachelor\u0027s Degree
682 satisfied customers
I have a question about roth IRA for non working spouse. I
Hello,I have a question about backdoor roth IRA for non working spouse. I am a married self employed physician with high income. My wife had a job early this year but quit in the summer to take care i… read more
TaxRobin
TaxRobin
Vocational, Technical or Trade School
1 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x