Oldham Resource Group’s Quick Answers to 20 Common Questions
Oldham Resource Group’s Quick Answers to 20 Common Questions
We, at Oldham Resource Group, receive questions all the time from our clients. Here is a list of 20 of them. Obviously, there are many more that we answer-----all at no cost. Have fun with these. Some may help. For 30 years we have been here to help you. (800) 626-6106
- A relative of mine may have left some money in a bank account many years ago. How do I find out if there are any unclaimed assets for me?
Go to the website of the National Association of Unclaimed Property Administrators and do a free search. If the funds were in a bank that failed, recover the money from the FDIC. If they were in a pension fund of a company that went out of business, try the PBGC (Pension Benefit Guarantee Corporation).
- Should I buy or lease my next car?
The general rule of thumb is: If you want to keep the car more than four years or if you drive more than 15,000 miles a year, buy. If you like getting a new car every few years and aren’t restricted by the mileage cap, lease. To compare the two financing methods when you know all the terms (purchase price, interest rate, residual value, etc.) use the calculators at Edmunds.com.
- I received a big tax refund this year. How can I make sure I don’t give Uncle Sam another interest-free loan this year?
See the online version of IRS Publication 919. “How I Adjust My Tax Withholding?” Also see the withholding calculator at the IRS website.
- I’m having a baby. Should I work or stay home?
The decision to work or stay home is highly personal and goes well beyond finances. But you can use the Kiplinger calculator to determine whether you or your spouse can afford to quit.
- Should I refinance my mortgage?
The real question is this: how long do I have to stay in the house in order to recoup the refinancing fees? A quick payback calculation can be done by dividing the monthly savings into the refinancing fee. Example: If the new loan saves $100 per month and it costs $2,000 to get the loan, the payback period is 20 months. Use Bankrate’s refinancing calculator for more comprehensive calculation.
- How much life insurance do I need?
A rule of thumb is six to ten times annual income. But it’s easy enough to do a quick calculation of survivors’ income needs to avoid over – or underinsuring. We can assist you with this calculation.
- How can I get a copy of my credit report?
Contact one or all three credit reporting agencies and provide the following information: full name (including generations such as Jr., Sr., etc.), birth date, Social Security number, spouse’s name if applicable, telephone number, and addresses for the past five years. If you’ve been denied credit in the past 60 days, the report is free. Otherwise the cost is as follows:
· Equifax, P.O. Box 740241, Atlanta, GA., 30374, 300-685-1111, ($9.00 for Equifax report; $29.94 for 3-in-1 report; $39.94 for 3-in-1 report plus credit score
· Trans Union, P.O. Box 1000, Chester, PA., 19022, 800-888-4213 ($9.00 for a credit report, $12.95 for credit report plus FICO score)
· Experian, P.O. Box 2002, Allen, TX. 75013 888-397-3742 ($14.95 for credit report and score).
- When should I apply for Social Security benefits?
For a breakeven analysis, go to the Quick calculator on the Social Security website and enter your age and income. When the benefit estimate comes up, click on “Breakeven” to find out how long you have to live in order for delayed benefits (i.e., applying at age 70 rather than 65 or 62) to result in higher lifetime income.
- How much will it cost to send my child to Harvard?
Total cost including room and board for the 2002 school year was $38,450. Plug this number into the calculator at FinAid to find out the total cost of fours years of college in the year your child plans to go. For information on costs more than 7,000 other colleges, go to the National Center for Education Statistics.
- How much allowance should I give my kids?
One rule of thumb is half of the child’s age per week, but amounts vary depending on what the child is expected to use the money for. The point of an allowance is to teach children financial responsibility, so a budgeting exercise should accompany the setting of the allowance.
- How much of an emergency fund should I have?
Standard advice is three to six months’ living expenses---more if you’re self –employed or at risk for a layoff, less if you have access to home-equity line of credit.
- Do I need a prenuptial agreement?
Yes, if you have children from a previous marriage, own a business, have loved ones who need to be taken care of, have lots of assets, may be receiving a big inheritance, or expect a big increase of income. No, if you’re young and starting out on equal financial footing. Talk to an attorney.
- I have an old Series E savings bond that my grandmother gave me when I was born. How can I find out if it’s still earning interest?
Go to SavingsBonds.com and look up your bond in the table. If it has stopped earning interest, go to your local bank and cash it in.
- If an earthquake damages my home, will my homeowners insurance cover it?
No. You need separate earthquake insurance, which can be expensive. If you decide to buy it, be sure to cover the replacement value of your house and any possessions likely to be broken.
- Do I need a living trust?
Maybe, maybe not. The main reason for transferring assets to a living trust is to avoid probate. Talk to your estate planning attorney to find out whether a living trust is right for you.
- I’m thinking of buying rental property for the tax write-offs. Should I?
Maybe, maybe not. Rental property may provide you with tax deductions, but your whole tax situation needs to be taken into consideration. Talk to your tax advisor.
- What will it take to accumulate $1 million?
Years 4% average 6% average 8% average 10% average
annual return annual return annual return annual return
20 $2,726/mo $2,164/mo $1,698/mo $1,317/mo
30 $1,441 $996 $671 $442
40 $846 $502 $286 $158
- What should I do with a worthless stock?
You mean besides wallpaper your den? If the stock is truly worthless, claim the loss on Schedule D when you file your tax return next year. Sometimes it’s difficult to determine whether a stock is truly worthless or to know when worthlessness actually occurred. If there’s still a market for the stock, sell it.
- If something cost $1,000 in 1913, what would it cost today?
$18,566
- What should I do with a $1,000 windfall?
Invest in yourself. Take classes, buy books, subscribe to professional journals, buy software, take a mentor to lunch, update your resume, start a micro business from your home, upgrade your business wardrobe.
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