Q&A: Questions for a financial advisor

Dear Liz: I have some investments at a financial investment firm. My advisor said that because I am 62, I can transfer money from my 401(k) at my job into my account with his firm. He says he can do better with the amount I currently have in the 401(k). Of course I will continue to work and put in money into my 401(k). Does this sound like bad advice? The amount I would be trying to transfer would be around $62,000.

Answer: By doing better, does he mean doing such a spectacular job of investing that he rivals the legendary Warren Buffett? Because he might have to do just that to compensate for your giving up years of tax-deferred compounding.

Because you’re over 591/2, you can access your 401(k) balance without penalty, but you still must pay income taxes on any withdrawals. Investments in a regular account would be subject to income and capital gains taxes going forward.

It’s possible he wants you to roll the money over into an individual retirement account instead, which would spare you the tax bill and allow the money to continue growing tax-deferred. But unless you have a truly awful, high-cost plan, it’s hard to see how he can promise better results.

The Labor Department just approved a rule that requires advisors to adopt a fiduciary standard when providing advice about retirement funds. “Fiduciary” means the advisor is required to put clients’ interests ahead of his or her own. You might ask him if this advice aligns with the standards and if he’s willing to put that promise in writing. If not, you could be forgiven for suspecting that he’s more motivated by what he can earn via commissions or other fees than by doing what’s right by you.

Q&A: Finding fee-only financial planners

Dear Liz: Every so often your column mentions an organization that lists financial planners that are fee-only. I cannot find this information on your site. Please keep mentioning this in your column.

Answer: You can get referrals to fee-only planners who charge by the hour at www.garrettplanningnetwork.com. If you’re looking for fee-only planners who charge a retainer or a percentage of assets, you’ll find those at

Thursday’s need-to-know money news

2Today’s top story: How the new advisor rule will effect your retirement investments. Also in the news: Why a better FICO score leads to a better retirement, how to avoid retirement rip-offs, and protecting your tax returns from criminals.

What the New Advisor Rule Means for You, Your Retirement Investments
Introducing the fiduciary rule.

How a Better FICO Score Leads to Better Retirement
What you save in interest could improve your retirement.

5 ways to avoid retirement rip-offs
Choose wisely.

How criminals could steal your tax return
Criminals are going tax phishing.

Friday’s need-to-know money news

Today’s top story: How to tell when financial advisors are worth the fee. Also in the news: Making your personal finances fun, how to prepare financially for starting a family, and uncovering tax myths.

Are Financial Advisors Worth the Fee?
When it’s time to call in the pros.

4 Ways to Make Your Personal Finances Fun
Gamifying your savings.

How To Prepare Financially For Starting A Family
Taking the important first step.

5 Myths About Taxes
Uncle Sam wants money from those weekend side gigs.

Wednesday’s need-to-know money news

Zemanta Related Posts ThumbnailToday’s top story: Last-minute tax moves to make on December 31st. Also in the news: How to tell if your financial advisor is giving you good advice, why you should consider freezing your credit reports, and the top 6 financial resolutions for the new year.

4 Last-Minute Tax Moves You Can Make on Dec. 31
Tick tock!

How To Tell If You’re Receiving Good Advice From Your Advisor
Making sure you’re getting your money’s worth.

Why you should consider freezing your credit reports
Preventing identity theft.

Top 6 financial New Year’s resolutions and how to fulfill them
Making resolutions that last.

Wednesday’s need-to-know money news

Today’s top story: How to break up with your financial advisor. Also in the news: How to save on remodeling costs, what happens to your debt after you die, and the perfect stocking stuffer for your future investor.

Breaking up with your Financial Advisor
Protecting your best interests.

Remodeling? Refinancing With a 203(k) Loan Can Help
Better interest rates could make remodeling more affordable.

What Happens to Your Debt After You Die?
You can’t take it with you, so to speak.

A Stock Gift Card for Your Little Investor
A great STOCKing stuffer.

6 Strategies to Get Out of Debt
Finding the one that works for you.

Four ways to get a jump on tax season

bigstock-U-s-Income-Tax-Return-Form-28476797-e1390508229663Taxpayers face a cliffhanger again this year as Congress dithers about extending more than 50 expired tax breaks, including popular deductions for college tuition and fees, mortgage insurance and sales taxes.

As we wait for lawmakers to act, though, we still have time left in the year to make adjustments based on changes that have already happened. In my latest for Reuters, I share four ways to get a head start on tax season.

In my latest for Bankrate, how to find an honest financial advisor.

Tuesday’s need-to-know money news

imagesToday’s top story: Financial behaviors you don’t want to pass on to your kids. Also in the news: Facts that will change how you think about money, how to find a financial advisor, and how to choose between saving or paying off debt.

11 Financial Behaviors You Don’t Want Your Kids to Learn From You
Setting the right example.

6 facts that will change how you think about money
Game changers.

How to find a financial advisor
Finding the right one.

Save or Pay Off Debt? How to Make the Tough Choice
Which works best for you?

Thursday’s need-to-know money news

debt collectorsToday’s top story: How a single missed student loan payment can damage your credit. Also in the news: Finding a financial advisor who won’t rip you off, how tax liens can affect a spouse’s credit, and seven fall budget moves you need to make before the holidays begin.

Most Students Don’t Get How Bad It Is to Miss Loan Payments
A single missed payment could take a severe bite out of your credit score.

How to Hire a Financial Advisor Who Won’t Rip You Off
Due diligence is key.

Life Insurance Agents and Commissions: What You Should Know
Beware the sales pitch.

How Tax Liens Affect a Spouse’s Credit
Community property states mean trouble for both credit scores.

7 Fall Budget Moves You Need to Make Now
Get busy before the holidays.

Friday’s need-to-know money news

2Today’s top story: Knowing when it’s time to talk to a financial advisor. Also in the news: Money tips for college students, why you might need life insurance if you’re getting divorced, and five reasons why you have a bad credit score.

7 Times You Need to Talk to a Financial Advisor
Going it alone isn’t always a good idea.

Back-to-School Money Tips for College Students
How to avoid going broke in the first month.

Getting Divorced? You Might Want — or Need — Life Insurance
Covering your financial obligations.

5 Reasons You Have a Bad Credit Score
Time for credit check.