This week's answers come from:
Cathy Pareto
Cathy
Pareto is a Financial Advisor at Singer Xenos Wealth Management, a fee-based investment advisory firm with over $350 million assets under management.
Located in Coral Gables, Florida, she specializes in wealth management,
investment planning, asset protection planning for physicians, retirement
and estate planning. Cathy has a BBA in Finance from Florida International
University and is in the final stages of completing the College for Financial
Planning curriculum in preparation for the Certified Financial Planner (CFP)
Certification Examination. She can be reached via email at
Cathy@SingerXenos.com or via the
www.SingerXenos.com website.
Questions and Responses
Am I contributing enough to my 401(k) for a comfortable retirement?
Who can close a mutual fund account?
Previous volume
Am I contributing enough to my 401(k) for a comfortable
retirement?
from Meg
Q: If my combined family income is 80K / year and we are contributing
8% to our 401Ks, how much will it be worth in 35 years for retirement, and will
that be enough to live on by then comfortably? What if we contribute 10%, or
15%?
A: Hello Meg and thanks for submitting your question.
You did not mention what your portfolio returns have been or are projected to
be. So, in order to answer your question, I made a few assumptions. Column one
indicates the annual level of savings (based on a percentage of family income of
$80k). Column two includes the ending portfolio values at a 6% return, column
three the portfolio values with an 8% return.
| Annual Savings |
Portfolio value, 6%
return, 35 years |
Portfolio value, 8%
return, 35 years |
| 8% |
$713,182 |
$1,102,827 |
| 10% |
$891,478 |
$1,378,534 |
| 15% |
$1,337,217 |
$2,067,801 |
I'm not sure what "living comfortably" may mean for you, since
everyone has a unique standard of living. But, the rule of thumb is to cap your
annual withdrawals at 5%. So, assuming a 5% annual withdrawal for your total
portfolio value, the numbers below should give you a good income gauge.
|
Annual Savings |
Annual income: 6% return |
Annual income: 8% return |
| 8% |
$35,659 |
$55,141 |
| 10% |
$44,574 |
$68,927 |
| 15% |
$66,861 |
$103,390 |
Remember, the earlier you start and the more you save...the more you'll have
to spend later.
Who can close a mutual fund account?
from Terri
Q: My Aunt was contacted by the company handling her mutal fund and
was told that two of her accounts one worth10,000 dollars was closed when she
asked by whom they wouldn't tell her. However, my aunt knows she didn't close it
and her husband is deceased. So my question is who could've legally closed these
accounts without the holders permission? I also have one more question, they
didn't tell her what stock she was investing in so she couldn't follow it is
that legal? Thank you very much for your time.
A: This situation does not pass the smell test. If it smells funny,
it's probably not good. The only person allowed to close the account is the
account holder or any other person with a power of attorney.
As for the inability to track the stock...I can't believe your aunt agreed to
that! There's something very fishy going on and if I were her, I'd get on the
phone right now to demand some answers.
Never open any account that you are unable to track somehow.
Get the name of the company, the owner/advisor and verify their legitimacy
with the NASD or SEC. If that was my money, I'd find a new home for it.
Important Disclaimer
Investing in equities involves a serious
principal risk, and no assurance can be given that the techniques described here will be
successful. Returns vary and you may have a gain or loss when you sell your shares. Past
performance is no guarantee of future results. Index returns shown are historical and
include the change in share price, reinvestment of dividends, and capital gains. Indexes
are unmanaged and do not reflect the impact of transaction costs. Transaction costs would
have reduced the total returns.
International investments, especially those in emerging
markets, entail greater risks (as well as greater potential rewards) than U.S. investing.
These risks include political and economic uncertainties of foreign countries, as well as
the risk of currency fluctuations. These risks are magnified in countries with emerging
markets, since these countries may have relatively unstable governments and
less-established markets and economies.
Lastly, the questions and responses set forth here are for
general informational purposes only and are not intended to substitute for performing your
own independent research or contacting your financial or legal professional before making
any investment decisions. We make no guarantees as to the performance of any investment
strategy you choose and are not responsible for any losses you might incur.
