How much cash should I have ?

How much cash should I have ?

Q: I’m trying to figure out how much cash I should have in my portfolio. I have been told to have a six-month emergency reserve. Are there other reasons I should have cash?

A: When we talk about cash, we usually refer to money held at the bank in checking or savings accounts or held in certificates of deposit. Cash also refers to instruments like money market funds or treasury bills held in brokerage accounts or retirement plan accounts.

Getting Smart about Required Minimum Distributions

Getting Smart about Required Minimum Distributions

Q: I will turn 70 ½ years old this year. I was told that if I keep working, I can wait to take my required minimum distribution from my IRA until I eventually retire. Is that really true?

A: Many people get confused by the rules for required minimum distributions (RMDs). Let me see if I can help clarify a few things.

First, the IRS requires that you begin taking minimum distributions from traditional IRAs and IRA-based plans like SEPs in the year you reach 70 ½ years of age.  This distribution is required whether you are working or not.

Win/Win Philanthropy: Donating stock to Charity

Win/Win Philanthropy: Donating stock to Charity

Question: I regularly give money to various non-profits. Recently, I saw something about giving stock instead of cash. How does that work and what is the benefit to me or the charity?

Answer: The non-profit organizations in Monterey County do tremendous work building and strengthening our communities, but they could never do it without your support. Thank you for making a difference.

One of the great side benefits to philanthropic giving is the ability to deduct the value of your charitable gifts from your taxes.

Strange Bedfellows: Trusts as IRA beneficiaries

Strange Bedfellows: Trusts as IRA beneficiaries

Question: I recently created a living trust as part of my estate plan. Should I name my living trust as the beneficiary of my IRA?

Answer: There are several good reasons why you might consider naming a trust as the beneficiary of your IRA. For example, if your heir is a minor or is disabled or a spend thrift or is vulnerable to financial predators, then naming your trust as the beneficiary of your IRA can help protect your heir and your assets.

However, IRAs and trusts make strange bedfellows.

Getting past the budget battle

Getting past the budget battle

Question: My husband and I agree that we need to spend less, but when we try to budget we just argue. How can we control our spending without all the drama?

Answer: Controlling your spending is the single most important thing you can do to establish a solid financial foundation. Since budgeting doesn’t work for you, try to think in terms of planning. Budgets sometimes evoke strong negative emotions. Budgets are about making do with less or doing without. Nobody gets excited about budgets, except maybe accountants.

Plans are different. Plans help people accomplish goals that really matter to them. A plan is rooted in purpose. The more clearly people understand the purpose, the more they are motivated to follow the plan.