Questions From Albany

Today in Albany, NAPFA-Registered Financial Advisor Bill Jerome spoke with a woman who works for Social Security. She was wondering if she should reduce her deferred compensation plan contributions because of the poor stock market. Many of her co-workers were reducing their contributions. We told her that her thinking was backwards; that stocks are on sale dirt cheap, and she should be increasing her contributions to her deferred comp plan and her Roth IRA not decreasing them. The stock market will recover. Now is the time to be taking advantage of the 50% off sale in the markets, and you should be contributing as much as you can afford to your retirement plans.

Another man had a question about whether or not it was a good time to be buying municipal bonds. Interest rates in the municipal bond market are fairly high right now, typically over 5% which is good for tax free income. They are usually safer than similar corporate bonds, since municipalities tend to not default on their debts.

Cynthia Zalewsky CFP, another NAPFA-Registered Financial Advisor at Saratoga Investment Solutions Inc. was manning the bus in Albany today.

She spoke with a gentleman inquiring about whether he should own bonds. We discussed the viability of quality municipal bonds with his taxable money and Treasury Inflation Protected bonds for his tax deferred accounts. Another gentleman had a question regarding in-service rollovers from a 401K/profit sharing plan to a self-directed IRA.

A woman stopped by wondering what asset classes she should be in today given the current market conditions. I recommended changing her current deferral percentages so that she is deferring more to the stock market via a total stock market index fund and a small cap index fund. We also discussed a TIPS fund available to her in her deferred compensation plan.