Ask Terry Archives

We recently converted our universal whole life policies (which we had for 35 years) to whole life insurance. However, for the first time ever, we received forms to complete for tax withholding purposes. Apparently, the dividends earned (which we want reinvested in the policies) are taxable? Either our insurance representative is using the incorrect vehicle…

In 2014 I took money out of my Prudential IRA. Had some medical bills and had given my 2002 Ford Focus to my son. I needed a car and decided to take enough out to pay the med. bills and the car. Hated doing this but did not think it through. I was 64 at…

At what point do you stop needing life insurance. my term life just ran out. to renew it went from 350 a year to 5000 a year. i am 59 years old and my wife is 55 years old. house is paid off and so are my kids education bills. i have no debt whatsoever.…

advice please for starting a college savings program for Illinois colleges. this would be for use in the distant future Terry Says:  If you're a resident of Illinois, I would go to Vanguard.com and sign up for their plan, which has the lowest costs and top ratings from Morningstar.  Remember, you can save in any…

Hi - I'm trying to choose a certified financial planner who specializes in pre-retirement planning. I have two plans in place: long term care insurance and a deferred variable annuity (85K). I am currently teaching for another 9-10 years before I turn 69 so have the state pension as well (Illinois!) so want to receive…

How can I cut taxes on my IRA withdrawals ? How can I transfer money from a spouse's federal thrift savings into an IRA? Terry Says:  Oops, you can't "cut taxes" on IRA withdrawals; they are always considered ordinary income!  Are you asking how you can stay in a lower income tax bracket once you…

Terry, My daughter has a 529 pre paid plan that will pay for 120 credit hours. Her grandmother is the owner. The plan provider, College Illinois, told me that since her grandmother is the owner the income when paid out will not count against her. FAFSA tells me that it will. Can you help me?…

My daughter is 23 years old on 1/1/16 and can file her own FAFSA for '16-17 undergrad year, however we would still like to claim her on our 2015 tax return as a dependent. Is this legal? If so, how do we go about doing it? Terry Says: Interesting question -- and it forced me…

My daughter purchased a condo. Bank did a 80/20 mortgage. her 1st one is with the bank she uses and is at a fair percentage rate. But the second is much higher rate 8-9 %, they are out an foreign bank, Popular, and hard to get in touch with.. Can she renegotiate this loan? Or…

What 529 plan are you recommending. I have read that you do not recommend Brightstart or College illinois. My son had very little colege debt, i would like my granddaughter to have the same advantage. Thank you Terry Says:  I always put my money where my mouth is!  When my brother had a baby a…

Is this a good time to invest in the S&P 500? If so, how would I go about investing in the fund and how often should I invest(monthly, annually)? Currently, I am not making any money on my savings. Terry Says:   I will answer the way I always answer this question:  It is ALWAYS a…

terry i have 3 or 4 savings bonds that are due this month 30 year ones that are earning 5 percent how do i handle this thanks dan Terry Says:  First, you need to make sure that those bonds are reaching their final maturity, not just the "original" maturity date.  You can do this either…

February 2015 I had my bankruptcy discharged. Since then, I have been able to obtain credit cards and car loans. I have never missed a payment on anything and I always pay more than the minimum. I am aware that hard inquiries can negatively impact your credit score. 11/3 my report dropped 31 points. 11/28…

Hi Terry. is $150,000 in one account with an interest rate of 5% the same as having $150000 spread out over five accounts with the same interest rate .would the compound interest be the same? It seems to me that you would make more interest on your money if it was all together Terry Says: …

Do you know of any banks that offer some incentive for opening a minor saving account. I know Marquette bank matchs $25 when you open a account for $25. Thanks.. Terry Says:  Different banks may have different marketing offers at any given time.  But you might want to think twice about opening a custodial account…

If I gift money to a one of my children,can i deduct it from this years taxes? If so is there a limit. Thank you Terry Says:  Gifting money to children, or anyone other than a registered charity or religious organization, does not get you a tax deduction!  You can gift up to $14,000 a…

What is the best way to give a child money for investment? I wanted to buy savings bonds for my god daughter, but I just found out they aren't purchased at the bank anymore and the ebonds are not purchased at half the price like the paper ones were... Terry Says:  The world has changed. …

I live in Lansing, Il. I obtained an loan in May 2013 in the amount of 2,525.00 the interest rate was 139.12 % from western sky in South Dakota. I have paid 300.00 each month since may 2013. I have paid them over 9,000.00. I received a notice 12/18/15 stating the loan is paid in…

Terry, In your 12-20 Chicago tribune column, you said "don't start withdrawing until the junior year of college..". Why? I can see why it wouldn't effect their junior year Fafsa but what about their senior year Fafsa Also, are contributions in to the 529 subject to gift tax if they exceed the annual exclusion? Thanks…

Terry's column in 12/20/15 Hartford Courant, "5 things to know about FAFSA, financial aid, 529s" states "The FAFSA form asks for all income, substantiated by the parents tax return (of both parents, if divorced.)" According to website info at https://studentaid.ed.gov/sa/sites/default/files/fafsa-parent.pdf, when the parents are divorced and not living together it is only the parent's info…