Experts offer tips to get financial plans into shape

STOCKTON -- Experts in the mortgage, tax and financial advisement fields spent two hours Tuesday evening answering questions from the public during The Record's year-end financial call-in event.

About 30 callers took advantage of the opportunity to consult with some of the top financial professionals in the area. Questions ranged from mortgage loan refinancing to tax strategies to preparing for retirement to long-term health care insurance.

"The common theme was what I'm going to call lack of planning and then life happens and then you're in a really tight spot," said Tina Wells Lee, certified financial planner with Tina Wells Lee & Associates in Stockton. "What can you do, especially when it's exasperated by maybe a medical condition; things that are going to limit what your plans were?"

Each of the panelists agreed: planning is the key to a more secure financial position later in life. Longer life expectancy and the daunting prospect of requiring some form of assisted living services only have heightened the need for prudent preparation.

"One out of two of us over age 65 are going to need some type of long-term care at some point in our lives, and that's custodial," Wells Lee said. "No amount of therapy or prescriptions is going to make you better. Usually, we're just older or, unfortunately, you may be cognitively impaired. It can wipe out a portfolio. So, it's planning, planning, planning."

Custodial care is not covered by Medicare, so a supplemental health plan should be considered, Wells Lee said.

Norma Standridge, vice president wealth management lending officer for Bank of America in Sacramento, fielded a question about home mortgage refinancing. The caller said she is paying 4.5 percent interest and has been told she could lower her interest rate to 4 percent.

"She just wanted to know how much money she would be saving," Standridge said. "I told her it depends on the term of the loan. I give people different pricing for 15-, 20- or 30-year loans, hopefully leaving them with a similar payment and a shorter term. That way they can decide what's going to work for their budget."

Standridge said in the long run, the savings likely would more than cover the closing costs. Another cost-saving strategy, she said, is paying off the mortgage quicker by making an extra annual payment or extra payments during the year.

Tom Winkler, certified financial planner with Ameriprise Financial Services in Stockton, who teaches personal finance courses through the Stockton Institute for Continued Learning at San Joaquin Delta College, said several people he spoke with wanted to know about the tax ramifications of required minimum distributions. At age 70½, distributions from pensions, 401(k)s, 403(b)s and some other retirement financial instruments are mandatory.

"What are their effective taxes going to be or is there some tax strategy they have to look at?" Winkler said. "Everyone's different. They have to take distributions from each of those individual buckets."

Winkler said it's important to figure out what you need to put away for retirement, what your tax is going to be and how much money you will need to support your lifestyle.

"Do the math," Winkler said. "If you have a pension, when are you going to take your Social Security, if you're going to get it, and then what do you have in your other buckets?"

Also present at the call-in were Steve Dougherty, owner of Dougherty CPAs in Stockton; Frank Feng, financial adviser for the MEMBERS Financial Services Program in Stockton; Christopher Olsen, CFP and owner of Bridge Pointe Financial Group in Lodi; and Ned Leiba, CPA with Leiba & Bowers CPA firm in Stockton.

Contact reporter Bob Highfill at (209) 546-8277 or [email protected]. Follow him on Twitter @bobhighfill.

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