Farnoosh Torabi's Blog, page 74
August 8, 2011
Today: Saving Safely
This morning on NBC's Today Show, Ann Curry and I discuss how Americans can protect their retirement portfolios in the wake of the country's debt downgrade and major stock market drop.
Visit msnbc.com for breaking news, world news, and news about the economy
August 6, 2011
Retiring With a Full House
It's one thing when the kids return home after college. It's another when you're about to retire and suddenly you've got a full house again. The latest wild card in retirement is not social security or life expectancy. It's the number of dependents retirees may have. According to a new survey by SunTrust, more retirees are suddenly taking into account having to support aging relatives, adult children, grandchildren and siblings. Half of respondents in the survey said they expect to provide this support – much of it going to adult children due to a foreclosure, job loss or other financial troubles.
Some advice if you suspect this will be you:
1. Be a Resource, Not an Enabler.
There's a fine line between offering help and being an enabler.
You don't want to immediately write blank checks to your children. You may look at this as your obligation to help your children, but that doesn't mean you need to become their personal ATM. Understand what it is that they need first – whether it's money to help pay the mortgage or a credit card balance – and become a source of ADVICE FIRST, MONEY SECOND. The first thing you should do together is to try to brainstorm other potential solutions and resources – for example, calling lenders and asking for loan modifications or discussing alternative college options with your grandchildren such as going to community college for the first year or two, if paying tuition is going to prove difficult.
2. Avoid Tapping Your 401(k)
If you've yet to retire and suddenly need to help your adult children with their finances, avoid making advance 401(k) withdrawals. You'll have to pay income tax on the money, as well as a 10% penalty, meaning you could easily wipe out half of that money you've worked so hard to save. Pretend that money just doesn't exist and don't consider it an option for now. Once you retire and you're able to withdraw that money penalty-free, you may decide to allocate some of that towards helping your family.
3. Discuss Retirement Plans With Your Adult Children
You may think that just because you are in your early 50's or 60's that there's no need to have a serious talk about your finances and retirement plans with your children yet. But the sooner you start, the better especially if one parent has an illness or is disabled. Let them know how you've been saving all these years, what your hopes are in retirement, as well as a list of all your doctors, lawyers, accountants, etc. By having your children witness all the careful planning you've done, they may develop a newfound appreciation for the help that you're providing them – and will hopefully be inspired to take more control of their lives independently.
4. Develop a System of Bartering
If your adult children suddenly move in – and they're not able to help contribute to the monthly housing costs, gas or groceries – you should be getting something in return – maybe not money, but definitely some help around the house. After all, you've reopened your home – not a hotel. Have a conversation before family moves in about expectations and what everyone can do to help. Take turns preparing meals, doing the laundry and babysitting. Grandma should not have to stay home every Friday night watching her grandkids. You need give and take when living with family.
5. Invest in Long Term Care Insurance
Only 10-12% of those aged 65 and up have long term care insurance. That's dangerous. Paying for long-term care on your own can be financially ruinous. Assisted living facilities cost an average $40,000 a year and nursing homes can cost more than double that per year – and many of these costs are not covered by Medicare. With long-term care insurance you ensure that your children – who are perhaps not in the best financial state — won't have to pay out of pocket if you choose to get assisted living or live in a nursing home one day.
6. Plan for Increased Future Costs
For retirees who are suddenly facing the possibility of taking care of their kids and their grandkids, the concern is not just paying for more groceries, but perhaps also college costs for your grandkids. Know that you can open a 529 plan or contribute to an existing plan. You may also want to revisit your life insurance policy and make sure there's enough there to cover those that are suddenly re-dependent on you. Your policy may have only addressed your expenses as husband and wife. Now it may need to address your dependent adult kids and possibly grandkids.
More Retirement Advice
Student Loans Versus Retirement
Maximize Your 401(k)
Planning For Retirement
Be Careful With Your Company's Stock
July 28, 2011
ABC Nightline: Debt Ceiling & You
Last night on ABC's Nightline, I sat down with correspondent Terry Moran to discuss what a debt downgrade will mean for everyday Americans. Here's the clip, in case you missed it.
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July 25, 2011
Today: Hump Day Deals!
This morning on the NBC Today Show I discuss the best day to shop online and off to earn the steepest discounts on food gas, travel and more. This segment actually stems from my Yahoo!Finance segment a couple weeks ago that became one of the site's most popular videos. Check out the full story here.
Visit msnbc.com for breaking news, world news, and news about the economy
July 22, 2011
ABC: Boomerang Advice!
Living at home with mom & dad after college can be a great opportunity, but only if you play it right. I dropped by the set of ABC News Now earlier this week with some advice on how families can make the most of an otherwise tricky situation.
Check out the clip below!
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July 21, 2011
Curb Impulse Spending: 3 Tricks
This week in AM New York, I discuss three simple ways to curb impulse spending – from that $5 bottle of Kombucha to the discounted tango lessons from Groupon. Impulse buys feel great, at least for a little bit…so how to control the urge?
Mind Your List.
Sticking to a strict shopping list is one of the best ways to stay on budget and avoid buying the unnecessary. Why? It mainly has to do with the fact that when we limit ourselves to a list, we narrow our options. We stay sharply focused on what we need, rather than what we want. In fact, behavioral studies show that when face endless options, we get confused and make irrational – and regrettable – decisions. Think: kid in a candy store.
Stay Hydrated.
Believe it or not, the need "to go" can actually help you save money. Researchers in The Netherlands have discovered that bladder control helps delay gratification. In their study published earlier this year, they found that those who drank either 50 ml or 700 ml of water – and waited 45 minutes – were more likely to curb impulse choices. And with the current heat wave, this shouldn't be too hard a task!
Take a Breather.
The salesperson says you look "amazing" in those jeans and they're 30% off! But, instead of ringing them up right away, try this: take a 5-minute walk around the block, bring down your adrenaline and think about the purchase in a more objective environment. Ask yourself: Can I afford it? What else can I do with the money? What's the trade-off? You may discover that you don't care for the jeans or they're not really worth it.
July 19, 2011
Yahoo: Make Easy Money
In this economy, with escalating food and gas prices and stagnant wages, who wouldn't want to make extra money on the side? The trick, of course, is creating an additional revenue stream that requires little time or energy, as our lives are already jam-packed with work and responsibilities. Check out our latest Yahoo! Finance video with tips on where and how to make easy money!
July 12, 2011
Yahoo: Best Day to Shop
In this week's Financially Fit video, we take you through all the deals and discounts available on ONE particular day. Watch the video to find out more!
July 10, 2011
Today Show: Boost Your Credit Score
Friday on the NBC Today Show, we discussed ways to give your credit score a boost this summer. Check out the clip below!
Visit msnbc.com for breaking news, world news, and news about the economy
July 6, 2011
Today Show: Money 911
This morning on Money 911, we tackled a few of our viewers' questions – from 403(b) rollovers to refinancing a car loan in order to help pay off a credit card. If you have personal finance questions for me, don't hesitate to send me a message!
Visit msnbc.com for breaking news, world news, and news about the economy
