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Your thinking does show, to me, the biggest disadvantage of a one portfolio view. In the example above, it had $100K in a taxable account. If you needed $50K at some point, no problem because you have double that amount in your taxable. But what happens if the market takes a bad turn and you lose $...

Your thinking does show, to me, the biggest disadvantage of a one portfolio view. In the example above, it had $100K in a taxable account. If you needed $50K at some point, no problem because you have double that amount in your taxable. But what happens if the market takes a bad turn and you lose $6...

At this point, what should be done is based upon a few factors. 1)Is financial aid a concern? 2)Are the gains large or small? 3)If money isn't needed for school and you could take the money out with minimal taxes, would you want to do so? If the answers are "yes" and "small" and...

Although I agree there is a benefit to having multiple plans when it comes qualified withdrawals, I think everyone needs to evaluate their chances of taking qualified withdrawals. I have 3 kids. That alone gives me a decent amount of flexibility. If I still have money after all 3 go (or not go) to ...

Although I agree there is a benefit to having multiple plans when it comes qualified withdrawals, I think everyone needs to evaluate their chances of taking qualified withdrawals. I have 3 kids. That alone gives me a decent amount of flexibility. If I still have money after all 3 go (or not go) to c...

It can easily matter for financial aid because the multiple plans can be used to turn much of the 529 plan money into non counted assets without incurring taxes and/or penalties. This can't be done with just one plan. Please explain. I find it easier moving the total amount from one kid to another ...

Non-qualified withdrawals - makes sense. I guess my plan is to use up all the money. If I don't, I'd probably pass it on to grand kids one day. I don't think I'm going to qualify for financial aid, so you're right when you say I don't understand all the implications. However, I (the parent) own all ...

I have one plan for 3 kids. I do this for the following reasons: 1) Simplicity 2) Current rules allow you to make one move a year in these plans. If I want to make a second move, I can transfer the money to one of my other kids and at that time I'm able to reallocate the savings. I have found this t...

My kids are 7 and 9. We opened their 529 plan accounts when they were born and we have contributed somewhat regularly since then. We were 100% in stocks in both 529 plans (Vanguard/Nevada) until the past few weeks. We recently locked in substantial gains and moved 100% to the money market option. N...

These issues regarding the 529 are at: http://www.savingforcollege.com/articles/avoid-these-529-withdrawal-traps That's a really good link outlining some of the concerns when making withdrawals. As someone about to start the process in a year, it was very timely information to start pondering. I al...

I kindda did. I refinanced to a 15 year 2.75% rate. I took out an extra $50K. For now, I put the $50K to work in a cash value account associated with my group universal life insurance. That account is paying 4% (that's the documented floor for the account and hasn't gone lower than that the past few...

I agree with most of the posters above. In fact, I think most people that own a home and are eligible should have a HELOC. However, there are a couple of negatives about a HELOC: 1) If you can't control your spending, a HELOC may be a huge temptation. 2) If you ever go to refinance your mortgage, it...

I used to keep between 5K-10K. Since I have a HELOC and rates are so low, I decided to keep much less. I'd say on average, I have 1K above what I need for bills. It really depends on how much my bills are for a given month. Some months I'll have more and others less.

One quick point: At my credit union, it costs nothing to open a HELOC. However, if you close it within 3 years they recover the closing costs. This is true if you sell the house.

The only point I wish to add is interest you pay yourself is like a risk-free investment. My guess is the interest rate on the 401K loan, assuming it's at all comparable to rates at commercial banks, would be an excellent risk-free rate of return. However, as noted above, you also need to factor in ...

I'd recommend that you run some calculations to estimate what your required minimum distributions (RMDs) will be starting at age 70 1/2. Ed That sounds like a great idea. I have a spreadsheet with projections on it. i think I'll incorporate RMD into it. zebrafish - I didn't include home equity in m...

An easy solution, of sorts, would be to start stocking up on I Bonds each year - they are tax-deferred, but liquid essentially after one year (with small penalty) and one of the better 'deals' out there, at least right now, in terms of yield. If "stock up" means not contributing to one of...

I'm 46 years old and have been maxing out my 401Ks, ROTH IRAs, 529 plans (up to state tax deduction), education IRAs and any other tax-advantaged space I can find for many years. Taking a look today, I seem to have most of my money tax-advantaged accounts: 7% taxable 93% tax-advantaged. I don't nece...

If you have everything under a single AA, it's not like you're investing the money any more or less aggressively. The idea is the single AA takes into account when you need the money for college, just like it takes into account when you need money for retirement. The benefit of a single AA is the fo...

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I do both. I really track to one AA for all my money including the kid money. However, I also have different views of my money: 1) Everything including the 529/Education IRA/UGMA (this AA is computed using (2) and (3) 2) Everything not set aside for the kids (here I set an AA) 3) Kid money - 529/Edu...

I was curious about the same exact question, and it appears that IRS is being nice to us here. Pub 936, Mixed-use mortgages says that principal payments kill off home equity debt ($100K limit) first and home acquisition debt ($1M limit) last. Caveat emptor, consult TurboTax your tax advisor, yada y...

This issue came up as a tangent in a thread a few weeks ago, but I didn't get an answer. Here's the scenario: a) Currently have $130K mortgage. b) About to do a refi+cash back for $150K (in other words $20k cash-back). c) Have a $100K HELOC open. d) Current law allows one to deduct interest on loans...

I don't know if I'm lucky or not. I live in NY and between my property taxes and state income taxes, I'm already over the standard deduction. Therefore, 100% of my mortgage interest is deductible. That may be true, but just remember that the first 100% of your itemized deductions that equal your st...

I don't know if I'm lucky or not. I live in NY and between my property taxes and state income taxes, I'm already over the standard deduction. Therefore, 100% of my mortgage interest is deductible.

maxing 529 (13k for one college-bound child; post-secondary education is uncertain for other child so no 529) Although the 529 is in one child's name, you can always change the beneficiary in the future if you so desire. I have one 529 plan for 3 kids that I keep in one child's name for simplicity....

Just to add to my last post, I view all my education accounts as shared equally. Lets say you have 3 separate 529 plans for 3 kids. What happens if one 529 plan does better because the market happened to rise when their 529 plan was heavier in equities. Does that mean that child gets more money for ...

I have not tried to untangle the possible withdrawal and financial aid implications of doing it one way or the other. I suspect they are pretty negligible or we'd be hearing about how to strategically manage multiple 529 accounts for multiple children. I have never read a single article about this....

One other point I was thinking about. If the 529 beneficiary is not yet in college, I wonder if that helps with financial aid at all? For example, I have 2 children 4 years apart. The older child, child 1, starts college. The whole 529 plan is in a plan where child 2 is the beneficiary. Whenever a b...

I have 3 kids (2 will overlap in college) and use NYs plan as well. I also max out the $10K per year. I have one account for all my kids. A couple of reasons: 1) Easier to manage 1 account. 2) Loophole: You are allowed 1 move a year in an account. However, if you change the beneficiary, you can also...

In other words, a 0.5% drop is of more value at higher interest rates (in terms of dollars saved monthly). Interesting. So even though the percentage decline is smaller at the higher interest rates, the dollars saved is greater. And with each of my no closing cost loans, I couldn't find any other l...

I would say if you can refi for no closing costs to a rate lower than your current rate, you should do so, even if it's only a small drop. There are always costs other than closing costs: your time, amount of hassle, consideration of other loans (ie., do you close an open HELOC or subordinate it wh...

A drop of 0.5% from 8.5% to 8.0% is not as significant as a drop from 4.0% to 3.5%. But you knew that. Although that is true, the amount of money you save lowering it 0.5% is the same and the closing costs should also be the same. I would think if it makes sense at 0.5% to refinance, then it would ...

It sounds like many here have refinanced multiple times of the past few years. I myself have down it 4 times over the past 14 years. I'm curious how much of a drop it took to refinance. It seems the same trend always followed for me: Rates hit lowest rate in a long time, rates dropped by around 0.5%...

Interesting, good to know from someone who owns it. I have been going by the graphics and webpages available which all suggest that allocations move in 25% chunks (in the age-based or single-fund plans). I have not dug into the detailed description of investment options because of that - perhaps th...

The NY plan is now the lowest, having been recently revised. However, if you're looking for the ability to customize and select specific asset allocations, the NY plan is not very good; there are limited options and the best you can do is 25% chunks. Expenses are not everything. The minimum allocat...

The ER used to be .25%. They recently lowered it to .17%.

Any time you borrow money the bank wants to know what you plan to do with it. It won't affect the deductibilitiy of the interest, however, unless it exceeds the home equity limitation. John So let's assume I'm doing a cash out of $60,000. If I also have a HELOC open and next year spend $50,000 on i...

Any time you borrow money the bank wants to know what you plan to do with it. It won't affect the deductibilitiy of the interest, however, unless it exceeds the home equity limitation. John So let's assume I'm doing a cash out of $60,000. If I also have a HELOC open and next year spend $50,000 on i...

I'm in process of doing a mortgage refinance with a cash out. I'm being asking by my bank to provide an explanation letter for the reason for the cash out. Anyone know why they would need this information? Does this reason impact the interest on the loan being tax-deductible?

Thanks for any input

I certainly hope all of our retirement accounts perform better than that too. And I'm an optimist and think that more than likely they will. I just don't know if I'd want to "double down" on that so to speak. If the market does well, you're likely to be comfortable in retirement and incre...

Homer - Another fair question given my responses. That equation is certainly true today, but I hope it's not true over the next 15 years or, as you say, I will have some problems. First, the magnitude of the inequality in the equation is not that large. I'm not putting myself into any large debt eve...

But I would think long and hard about taking out an extra $50,000 loan with the mortgage to continue to max out retirement investments. If you have enough money in your retirement accounts, then great, work on getting mortgage paid down and improving your cash flow for the next 15 years. If you sti...

That's a pretty good deal... Can the rates go up? What happens if you lose your job? I'm 43 and have a 20-year term policy (17 years left) worth $1 million that costs me $960 a year ($80 a month). Rates could go up and do go up with age. So your policy may very well be better over 20 years. That is...

Group universal life is usually more expensive than pure term. Is there a reason why you use group life over an externally purchased option? Perhaps this is an area I need to investigate further. I always thought that healthy people tend to get a worse deal using group life because on average they ...

Sorry if I come off as a jerk, but if you need to borrow money from your house in order to handle cash flow, you have too much house (or too many other expenses). How much are you paying each month into that life insurance? It obviously isn't term... Maybe instead of paying $500 or $1000 each month...

I general, I think borrowing money now when rates are so low is better than not funding my retirement. Bond fund yields are equally low. From your posts, I can't tell if these decisions are to make sure you're adequately set up for an emergency or if you think needing this money in the next 15 year...

Regarding the transfer tax in NY- not totally familiar with it, but I seem to recall if you work with a new lender, they may be able to work with the title company to arrange it so you only pay the mortgage tax on the cash out portion of the refi. The new lender should be able to advise on this, es...

I had success refinancing my primary with a substantial HELOC withdrawn by refinancing with my HELOC lender ;) They were happy to get the business. What's frustrating to me is I have my primary mortgage and the HELOC with the same lender already. When I tell them it will cost them more money if I c...

Cash flow concerns. I'll be able to tap into my retirement funds after 15 years or so. You also never know future sources of income (ie., I'm not planning to inherit money but I may at some point). Of course, I could withdraw some of that retirement money now with ROTH IRA principal. The break even...