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Chris ChenCDFA, CFP®

We help individuals, families and business owners reach their financial goals. We have a special emphasis on complex situations such as retirement, divorce, and legacy planning

Waltham, MA
Wealth Strategist, Insight Financial Strategists LLC
Fee Structures: Asset-based, Fee-only, Hourly

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Advisors offer free consultations to determine if you're a good fit for one another. Providing more information in the consultation request will help advisors have a better sense of what you're looking for. The advisor will contact you via email and set up a time to meet. Depending on the advisor, and your preferences, this could be an in-person or online meeting. You are under no obligation to engage them after meeting with them.
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  • 7 out of 8 people found this answer helpful

    I'm 60 years old with about $200K in a 401k, not with my current employer. I have about 35K in credit card debt. Should I pull that amount out of my 4o1k and eliminate the card debt?

    401(k)

    Actually, since you are past 59.5, there is no penalty for a withdrawal.  However, you will

    more »

    Actually, since you are past 59.5, there is no penalty for a withdrawal.  However, you will have to pay income tax on it.  From your question, you are still employed which means that you might end up paying high taxes on your withdrawal.
    The other issue with a withdrawal is that it would be hard to make up for the lost compounding in your account, and would end up reducing your retirement lifestyle.
    You did not mention a 401k at your current employer.  Assuming there is one, you would be well advised to contribute there.  You could also roll over your former employer's 401k into your new employer's 401k.  Then, assuming your new employer's 401k allows for employee loans, you could borrow the $35K.  There is no tax impact for a loan.  You would have to pay it back, but it would be like paying it back to yourself. 
    Then put the credit cards away!
    Good luck!

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  • 4 out of 4 people found this answer helpful

    I watch Squawkbox on CNBC once in a while. Should I pay much attention to what they advise?

    Investing

    Squawbox and similar shows are entertainment.  In the financial world we all learn about the efficient

    more »

    Squawbox and similar shows are entertainment.  In the financial world we all learn about the efficient market hypothesis.  Some of us believe in it more than others.  In a nutshell it says that the price of a stock reflects all available information, and thus fairly represents the value of the stock.  There is a large set of academic study that support that notion especially when it comes to public information.

    Anything they would say on a TV show would be public and reflected in the stock price faster than a non professional could act.  So the answer is

    NO



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  • 4 out of 4 people found this answer helpful

    Should I convert my SEP IRA to a Roth IRA given that I plan to be in a low tax bracket in 2014?

    Taxes, Investing, Roth IRA

    In principle it makes sense.  However, I would like to have more information. I like (for purpose

    more »

    In principle it makes sense.  However, I would like to have more information.

    I like (for purpose of a Roth conversion) that you have $0 income.  However, your wife has an income.  The combined income tax of your wife's income and that generated by your conversion may push you into a high tax bracket.  That may negate the intent of your conversion.

    One potential positive is that you are starting a business.  Normally a business in its beginning phase is likely to generate losses.  If you have organized it as a LLC or a S Corp, your losses will pass through to your individual income thus lowering you income potentially into negative territory.  At this point it would definitely make sense to convert to a Roth up to the amount where you would start paying taxes.

    Above that amount, I want to have a conversation with you first.  I would like to understand what kind of retirement income you plan on, and therefore the real breakeven point for your conversion.

    For the second part of your question, money in a SEP grows tax deferred.  You pay taxes on it when you withdraw in retirement.  You have already determined that you pay taxes on the Roth upfront.  That is why you are considering a conversion at a time when you will be in a relatively low tax bracket.  If you are going to be in the same tax bracket at the time that you withdraw compared to the time you contribute, Roth and SEP IRA are equivalent.  The Roth only makes sense when your contribution tax bracket is lower than your expected withdrawal tax bracket.

    Good luck!

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  • 4 out of 4 people found this answer helpful

    Hello, I am in my twenties and I want to start investing. I am interested in more risky options such as stock or efts. Can you recommend some education basics that can help me start out?

    Investing

    Congratulations on jumping into finances.  I recommend that you first clarify your goals for investing. 

    more »

    Congratulations on jumping into finances.  I recommend that you first clarify your goals for investing.  Once you do that you will be in a better position to judge how risky of a portfolio you want to have.  For instance, saving for a down payment on a house in a few years should take a different approach than saving for retirement in 40 years.

    You will then need to learn about the basics of investing: risk, diversification, modern portfolio theory, etc... In addition to the excellent resources suggested on this page, see if you can join a Meetup group that focuses on investing, or a class at a community resources.  Reading only goes so far.  You will need to get people interaction to digest your learning. 
    Along way you will need to decide how much you want to learn.  That is also a decision about how much you want to defer to the professionals, whether it is a financial advisor, or a mutual fund, or anything in between. 

    Good luck!

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  • 4 out of 5 people found this answer helpful

    If I'm going to be taxed at a "normal" tax rate on my SEP IRA when I retire why don't I just invest without going through a SEP which means I'll only pay a 15% capital gains tax which is far lower than what I normally pay?

    Retirement Savings, Taxes, Retirement, Income Tax

    You make an excellent point.  The main advantage of tax deferred accounts such as the SEP IRA is

    more »

    You make an excellent point.  The main advantage of tax deferred accounts such as the SEP IRA is to defer taxes.  That means that you get an immediate tax deduction, in exchange for taxes in the future after you retire.

    Without using your SEP IRA, you would pay your marginal income tax (Federal + State) on your contribution, and then pay capital gains, which may be as high as 20% depending on your income, not to mention the ACA surtax.

    With the SEP IRA, you defer your income tax and your capital gains tax.  When you withdraw at retirement, you will pay your income tax on your original contribution, and you will pay ordinary income tax on your gain instead of capital gains.

    If your projected income tax in retirement is above your current capital gains tax it is a no brainer: go for the IRA.  Above that may require calculations.

    Personally I take my cue from Mitt Romney.  http://www.theatlantic.com/politics/archive/2012/09/whats-really-going-on-with-mitt-romneys-102-million-ira/261500/

    If it's good enough for Mitt, it's good enough for me :-)


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  • 2 out of 2 people found this answer helpful

    Are we anywhere close to being able to retire?

    Retirement Savings, Investing, Retirement, 401(k)

    Congratulations on having arrived at an enviable financial position.  Given your relatively young

    more »

    Congratulations on having arrived at an enviable financial position. 

    Given your relatively young age, you should plan for 30-40 years or more of retirement.  It is worth checking with a professional to make sure that the numbers add up.  According to Robert Shiller, the Economics Nobel Prize for 2013, people make better decisions with a financial planner.

    The first issue I would work on is what you would do if you were to retire early.  For many people, retiring sounds more idyllic when you are working, then when you are not.  You may want to examine why you want to retire.  Is it to pursue a hobby or because you don't like your job that much? How do you envision spending a week in retirement?  It's important to have a plan for that.

    Your travel plans ($10K a year) are not at a scale that it could not be done during your normal vacation.  Maybe you can travel more, and still work? 

    Financially, you would need a more comprehensive plan to ensure that you 1) account for all of your costs and potential costs, and 2) that you would have enough to cover them all. 

    I would suggest a comprehensive plan with a retirement specialist.

    Good luck!

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  • 2 out of 2 people found this answer helpful

    I usually hear that I should max out my 401k before making any other investments, in something like a Vanguard ETF. Do I really have to contribute the 17k 401k max first?

    Investing, 401(k)

    Obviously, you are not obligated to do anything.  Clearly retirement planning was important enough

    more »

    Obviously, you are not obligated to do anything.  Clearly retirement planning was important enough for you that you are contributing 6%.  And obviously you have other goals.  Financial planning is about prioritizing and balancing all of your goals.

    \If you contribute 6% of your income and it is matched $ for $, you are effectively contributing 12%.  Whether it approaches $17K depends on your income.  Do you have to max out at $17K?  That depends.  One of the problems with planning is that life is full of uncertainties, and it is always good to have margin for error.  You may want to check your calculation with a professional to see if it makes sense and, as Curt was saying, to ensure that your overall plan is balanced.

    Good luck!

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  • 2 out of 2 people found this answer helpful

    I anticipate many health expenses for 2014. Should I open a credit card (no interest) to spread the payment of these expenses over time?

    Personal Finance, Healthcare

    You indicated that you were looking at a no interest credit card.  Companies that offer that usually

    more »

    You indicated that you were looking at a no interest credit card.  Companies that offer that usually have an up front fee of maybe 4%.  That makes it low cost, but there is still a cost.

    It's best to pay it all as it is spent, but you already knew that.  Using a low cost credit card may help you spread it over time.  Just make sure you keep good track of your spending.

    I hope you do well in 2014, and that your health care budget gets back down!

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  • 2 out of 2 people found this answer helpful

    We're a non-profit social service agency with $62K coming off CD that was earning 0.2%. This money is not needed for another 2-3 years. What is the best place to park this money?

    Investing

    In general non profits tend to be risk averse for a number of reasons. If you are sure that you won't

    more »

    In general non profits tend to be risk averse for a number of reasons.

    If you are sure that you won't need the funds for 3 years, you could consider a taxable insured bond that matures at your target date.  Taxable, because taxable bonds typically yield more, and non profits don't pay taxes.  A bond that matures in 3 years, because you will get the face value.  Insured, in case they don't pay.  It is riskier in some respect than Treasuries.  You need to consider whether the additional risk is worthwhile for your organization.  If it is not, stick with CDs

    Best wishes

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  • 2 out of 2 people found this answer helpful

    If I am approved for a credit card but the credit line is low can I deny the card?

    Personal Finance, Credit Scores

    You can always "deny".  it means you have to cancel the account after it is opened.  It will

    more »

    You can always "deny".  it means you have to cancel the account after it is opened.  It will also remain on your credit record for a while.  If you add to missing mortgage payments, your score could suffer

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BA, Economics, University of Rochester
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