Jewish World Review July 21, 2000 /18 Tamuz, 5760
How can I finally start saving soundly?
DEAR BRUCE: I am a 50-year-old divorced male and am eager to start saving for retirement. I have just finished making child support payments.
I earn $25,000 a year and am renting an apartment. My salary is such that a house and savings for retirement are out of the question. Any suggestions? -- John, Ocean City, N.J.
DEAR JOHN: I am afraid that you are getting into this race at rather a late date. The best suggestion that I can make for you is to find a second job and devote every single penny that the job produces into savings.
Certainly if there is a savings plan at your place of business, by all means take advantage of it. If not, given the size of your income, I would immediately put $2,000 into a Roth IRA and make that contribution every year until retirement time. It is going to be very difficult for you to accumulate any large sums of money, because there simply isn't enough time for the law of compounding to be of great help to you. But a late start is better than no start at all, so get to it!
DEAR BRUCE: I have a quarter of a million dollars to invest so that it will supplement our retirement income. We would like to receive a 10-percent return.
I have considered a fixed annuity. The company does not preset the amount of interest, but it pays out what it receives less costs and so forth. There is a guarantee of 3 percent. Their track record seems to run 8.5 percent to 10 percent. What do you think? -- D.E., Portage, Mich.
DEAR D.E.: I am not a fan of annuities, fixed or variable. It seems to me that you could quite easily, with a bit of attention to your investments, receive a return of between 10 percent and 15 percent. When I say "return," I am talking entirely about growth, not dividends.
The trick here would be to do without the selling of the appreciated securities for at least 18 months. In that way, you would be taxed at your capital gains rate, as opposed to ordinary income rate.
Finding solid companies that are growing between 10 percent to 15 percent a year is really no great chore.
DEAR BRUCE: I've got a problem. I had a loan with one company, and they went bankrupt. Another company has since taken over.
Recently they sent me the title to my car, which was used for collateral for the loan, which has not been paid off.
Do I owe the new company anything or just assume that the loan was paid off because I got the title? -- Reader.
DEAR READER: The likelihood is that a mistake has been made. This in no way diminishes your obligation to the creditor. Whether or not you wish to notify them of their mistake is another matter. The fact that they gave you the title does not extinguish the
Send your questions to JWR contributor Bruce Williams by clicking here. (Questions of general interest will be answered in future columns. Owing to the volume of mail, personal replies cannot be provided.) Interested in buying or selling a house? Let Bruce Williams' "House Smart" be your guide. (Sales of the book help fund JWR).
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06/29/00: How social security seniors should invest
06/27/00: Waiting before re-establishing credit
06/21/00: Insuring an older car
06/19/00: Take the money and run!
06/16/00: Utility company incursion
06/15/00: Insurance settlement is no bargain
06/13/00: A straightforward form of bankruptcy
06/08/00: In the computer's clutches
06/07/00: The trouble with tenants
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06/01/00: The truth about nursing home insurance
05/30/00: Keep mother-daughter loan simple
05/25/00: CDs for security, not investment
05/24/00: Battling with collection agency
05/22/00: Are callable CDs a waste of time?
05/18/00: Building a college fund
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05/11/00: Your heirs, your choice
05/09/00: Mutual-fund investigations
05/05/00: Credit cards vs. debit cards
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04/28/00: A full refund after five years?
04/25/00: Get a homeowner's title policy!
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04/18/00: $10,000 limit on gifts
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04/11/00: Six percent is a pittance
04/10/00: Married couples should share windfall
04/07/00: How not to blow an inheritance
04/06/00: Get genetic screening for Tay-Sachs
04/05/00: Beating the look-back period
04/04/00: Providing for retirement
04/03/00: Readers disagree on time shares
03/30/00: The road back to good credit
03/29/00: Pre-tax dollars in IRA taxed later
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03/22/00: Old cars as hobby, not investment
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03/16/00: How to buy government bonds
03/13/00: Buying treasury instruments
03/09/00: Subcontractors must pay S.S.
03/08/00: Real-estate lawyers are essential
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03/06/00: Too rich for a Roth IRA?
03/01/00: Is time-sharing a scam?
02/29/00: Paying for nursing-home care
02/28/00: Rely on a real-estate lawyer
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02/16/00: Just how important is a 401(k)?
02/14/00: Shaky partnership buying house
02/11/00: Protection by residential zoning
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02/07/00: Ensure your insurability
02/04/00: Absurd community zoning laws
02/02/00: Money or securities?
02/01/00: Can we KO a custodian?
01/31/00: Why sell a home you love?
01/26/00: Everyone needs a will
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01/24/00: Should early retirees contribute to SEP?
01/21/00: Strategies for paying off debt
01/20/00: Is 15-percent growth achievable?
01/19/00: Selling a second home
01/18/00: Running from a time-share
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12/06/99: Maximize your tax shelter!
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12/01/99: Long-distance rentals a bad idea
11/29/99: Mortgage strategy A-OK
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09/29/99: Trusting only one financial planner
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09/17/99: Legal strategy can be a pain
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09/13/99: Always use an attorney!
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09/08/99: How do I roll over my 401(k)?
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08/02/99: Get the survey BEFORE you buy the house!
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07/27/99: If it ain't broke...