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September 30th, 2008
06:12 PM ET

Suze Orman Takes your questions

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Program Note: Suze Orman will be on AC360° tonight at 10pm ET to discuss how to keep your money safe.

 
 

Have questions about how the breaking news will change the market; affect your stocks, mutual funds, 401(k)... your job?

Submit your financial questions here for Suze Orman and watch AC 360’ tonight 10p ET to get them answered.


Filed under: Bailout Turmoil • Suze Orman • T1
soundoff (221 Responses)
  1. Vernie

    I'm 61 and no longer working. My 401 K is with Wachovia Retirement Services. Should I do a lump sum withdrawal and put it in an IRA at a local bank? If I do that, will I be taxed on that withdrawal? It is all in a Stable Value Fund. I'm 100% vested.

    September 30, 2008 at 7:13 pm |
  2. Ric Pulley

    Suzi,

    I am a small business owner (sole proprietor). For the small business owner cash flow is always an issue, but this is the first time there may not be future cash! My income is tied to the real estate market in San Francisco, CA. Now that the real estate market is starting to tank in the city I am not sure where or when my next projects are coming. I have cash reserves for only a few months out.

    How do I weather this storm out? Do I to pay the minimum on my business credit card debt to stretch the cash out? Does my mortgage come first? Who gets paid first? Vendors? Credit Companies? Mortgage? I don't want to be on a sinking ship. Please advise.

    September 30, 2008 at 7:11 pm |
  3. Bob Lee

    Hi Suze,

    Question:

    I am 51 years old and I am fully vested in a 401 K. I wanted to retire in 10-11 years

    My balance in the account was $51,236. 56 on 9-29-08; I checked my balance today, 9-30-08 it is now $48,204.68.

    I have $10,000 in credit card debt @ 12.51 % APR

    Would it be wise to make a withdrawal from my 401 K of $10.000 to pay off credit card (not to use again) knowing that I will have to pay 30% in taxes and early withdrawal penalties. My gut says do it since my 401 k is declining quickly anyway. What do you think?

    September 30, 2008 at 7:10 pm |
  4. Janet

    Susie,
    I'm 39 years old and got a late start on my 401K. However, in the last 6 years I managed to put into it (with company match), $70,000. That was as of August 2007, my 401K is now down to $52,000. Should I stay my course and continue to contribute the maximum to my 401K or perhaps choose some more conservative funds?

    September 30, 2008 at 7:06 pm |
  5. Arnetta Kelly

    I have the ability to pay off outstanding debits and would like some quidance on which ones. I have $18,000 to pay towards the debits.
    My debits include: 401K loan employee matched 50 cents on a dollar-#1 401K loan has a balance of $4,000 interest around 6% and $200 a month with 23 payments left, # 2 401K loan has a balance of $3,500 and $80 a month with 54 payments left. A car loan balance $16,000 and $345.83 a month at 6.75% with 52 payments left; a home equity loan balance of $19,700 and 5.25% with 11 years left; 4 credit cards (Lowes, Home Depot, Krogers, and GAP) and 21% with balance of $5,000. Which would you recommend?
    P.S. My friend Kirk thinks you should be the Treasury Secretary...we watch your show often.

    September 30, 2008 at 6:59 pm |
  6. Kathy

    Hi! I'm self-employed and 45. Currently, I have zero credit card debt...only a mortgage. I have funds in a Roth, Money Market, Savings and the Bank. No 401K. It seems like it would be a good time to take advantage of purchasing individual stocks such as Fannie Mae. Is it a good time and what stocks would be a good investment? I'm not saavy on the buy, hold, sell options. I want something long-term that I would not have to worry about too much. Thanks!

    September 30, 2008 at 6:59 pm |
  7. Margarita

    Suze,

    I am about to recieve a small inheritance, about $30,000. I had planned to pay off credit cards, about $15,000, with part of the money. If I pay off my credit cards, will they close down my credit lines? Should I save the money instead? Would putting it in a new money market be safe? I have good credit and no savings outside of my 401K. I'm 54 with about $110K in my 401K.
    Thank you.

    September 30, 2008 at 6:59 pm |
  8. Carol, Boston Ma

    Is it timing the market to get out of mutual funds( my IRA, with most of my money) now that the market is tanking? I have had some funds like TRowe Price Growth for 30 plus years. I am 64 years old, single and thought I was on the right track. I have no other pension. I have no debt and own my house. My portfolio was nearing 300,00 before market downturn. Of that money only 50,000 is in IRA CD. As you can see my tendeny to wait things out is strong. Thank you, Suze.

    September 30, 2008 at 6:58 pm |
  9. Edwin Gonzalez

    Instead of having the government give the banks money, why don't they use or distribute that money as a commission for them closing deals. That will make them work on getting things approved. An additional form of Income. It would also encourage competition. The money would also be stretch to many banks instad of a few. It can be a 10% kick back or something. If you give the banks money, they do not have to use it. They will use it for payroll, or supplies.

    If you think this is a good Idea Pass it on! Quick. Eventually it will get to Someone or enough people that can encourage it.

    September 30, 2008 at 6:56 pm |
  10. Linda, Enumclaw, WA

    Hi Susze,
    I have 60,000 cash in a Money Markey account. I would like to invest some in the Market. When and where should I put it?

    September 30, 2008 at 6:55 pm |
  11. Ward, Guam

    Why not have the top profit making companies in the U.S. put up the $700 billion? They made the most money from the economy they should be the ones to put it back in. Then the banks could repay them with interest. 138 million Americans paid taxes in 2007 and they would need to pay over $5,000 a piece to reach the $700 billion mark. Many Americans, myself included, could never afford such a price. Even over a number of years.

    September 30, 2008 at 6:53 pm |
  12. Debra Cortinas

    Here's a solution that will cost a lot less than $700 Billion. Give a million dollars to every household where at least one household member paid income taxes in 2008 and the household income is less than one million. We could all pay off our debts, the big lenders would get their money, most households would have surplus cash to spend and/or invest. Seems like a win-win to me.

    September 30, 2008 at 6:53 pm |
  13. penny thompson

    suze
    what if my company close its
    doors. what should i do with what left in my 401k

    September 30, 2008 at 6:49 pm |
  14. Joan Kral

    Is this a good time to refinance my home? I have a loan at 6.54% and am being offered a 30 year loan at 5.08%.

    Thanks for all you do!!!!

    September 30, 2008 at 6:46 pm |
  15. Diane

    Could you explain how this financial crisis will affect high credit card debt? Also, I just received 30,000 in cash, I am 55,000 in credit card debt. What is the best way to use the cash? Is debt settlement a good idea or a credit counselor.

    Please help.

    September 30, 2008 at 6:46 pm |
  16. Lynn Nichols

    Dear Suze,

    My husband and I are in our early 40's. Due to a tragic accident when my husband was 30 he is permantly disabled and unable to work. I work part time and care for him the rest of my time. We are heavily invested in the market with a fairly diversified portfolio but depend on dividends for income. We have lost thousands of dollars in the market. I have 90,000 in a 6mos CD at 3.07% interest and just pulled 50,000 out our growth funds on wed. Sept. 24. We owe about 5,000 in credit card debt and aprox. 90,000 on our home. What should I do?

    September 30, 2008 at 6:43 pm |
  17. Marie

    Suze, could you please explain to me why the American public is not encouraged to SAVE their money and not live beyond their means? All I hear now is that the credit market needs a bailout because consumers won't be able to buy, buy, buy. Isn't that what got us into this mess to begin with? People borrow and then can't pay their bills.

    September 30, 2008 at 6:42 pm |
  18. penny thompson

    suze
    what if my company close it doors. what should i do with what left in my 401k

    September 30, 2008 at 6:40 pm |
  19. Gail

    We have an annuity through AIG Valic in the amount of $163000. We are trying to take your advise about clearing up credit card debt by withdrawing from this fund. We are both 60. Previously any withdrawals were only taxed at 20% withholding. There has never been any fees to pay. This was a DROP fund that was rolled into it when my husband retired in 2005. Now we are being told that a TSA (consulting group) is handling the funds for the School Board retro active to include retirees. We need their approval to withdraw any funds and I am sure there will be a fee attached plus the extra days needed for their approval and AIG. My question is: Should we move this money into another type of account and if so What Type? Our retirement income and SS will allow us to live comfortably.

    September 30, 2008 at 6:33 pm |
  20. Susan RIch

    Hi Suze,
    I am an educator and have investments in a 403-b. My husband has a 401k. ( Both of our 403-b and 401k investments total approx. $350,000. in diverse mutual funds. We are both in our early 50's with a 15 year window before we plan on retiring. We currently own a home with 7 years remaining to pay our mortgage. Our credit card debt totals about $40,000. My question to you is in light of this current "bailout" situation, should we change our fund allocations which are 70% stocks and 30% bonds? Also should we withdraw some funds to rid ourselves of this credit card debt? Suze, I hope you can answer this!!!! I watch you faithfully and always send in a question.......but it is never answered! Please help me.

    September 30, 2008 at 6:31 pm |
  21. Marti Anderson

    Hi Suzy! What do think about a plan that pays the $700B to the American taxpayers? They can pay off their mortgage, credit cards, autos, etc. Then they would spend, spend, spend and continue doing so because their budgets will be free of debt. The influx of money into the economy will add money to lenders to make new creditors. The bill could do away with sub-prime lending and other ludicrous lending practices including predator lending. I know the banking lobbyists wouldn't like it. But can you tell me where this idea is flawed?

    It would amount to about $4000 per taxpayer in the US.

    September 30, 2008 at 6:28 pm |
  22. Dawn

    Hi Suze,
    I wake up at night wondering what I am doing with my money is going to be ok or will I end up losing it all. I have 70% of my money in growth and index mutual funds and 30% in Income mutual funds with EdwardJones. My Financial Advisor there of course says I should ride it out. I am 50 years old. I am terrified of it disappearing and have already lost over $5000 this year. I think this is affecting my health and I am not the market type. Thanks for your help.

    September 30, 2008 at 6:27 pm |
  23. Mary Lou Peterson

    Were do all the Familys go when they loose there homes?
    There is about 25 or more Familys looseing there homes here in Colorao Spring Co. Most of or all these familys already lost there Homes do to they were just to much money from the start. Or for other reasons. Then ended up here in this moble home park because the offered them second chance morgages. Now looseing there homes again from lack of funds or a major family crisses. Were do we go from here!!.
    Thank you very much
    Very scared
    Mary Lou Peterson

    September 30, 2008 at 6:26 pm |
  24. Ed

    Dear Suzy,

    My wife and I are in the accumulation phase of investing. We invest in a S & P 500 index fund through my 401K plan. We have a 20 years before retirement. My wife heard you recently say that we should not invest the maximum amount allowable in our 401K. We make regular investments into the 401K plan. Why should we not continue with this plan?

    September 30, 2008 at 6:25 pm |
  25. Thad Schiele

    You look rediculous. Screaming that the sky is falling yesterday because of the 777 drop. Now it jumped back up. And you never touch on what a bailout would do to the vallue of the dollar. I would appretiate it, if you at least touch on why the american people are against the bailout. It is not because we are angry! It is because the problem is we borrowed too much, so the sollution shouldn't be to borrow more. And creating $700 billion out of thin air will destroy our currency.

    September 30, 2008 at 6:19 pm |
  26. Mark Danchick from L.A., CA

    Ms. Orman,
    You seem to only address a small percent of Americans who have some sort of financial security or financial plan for the future. You don't address the majority of people who have only a few bucks in the bank and live day to day.
    What do you say to those who have lost their homes, spent their 401K's, lost their jobs or will be laid off soon, have no Health insurance, maxed out their credit cards and have a family to feed?
    This is the status of MANY Americans!
    What does the bailout mean to them? Where have you reporters, commentaries, advisers been to those people? What advice do you have to those sleeping in their cars with their families, with no mailing address? Those who can't get Public assistance because of cutbacks from changes in budgeting? Or do you want to pretend they don't exist and are growing day by day?

    September 30, 2008 at 6:15 pm |
  27. Kelli

    Thank you for all of your wonderful advice.

    My husband and I relocating and purchasing a home this week. Since the bailout was rejected do you think the the mortgage interest rate will drop further than the 6.125% they(WF) are currently offering? Or should we just take the 6.125 and not risk an increase, afterall it is lower than the 6.5 we were paying?

    Sincerely searching for knowledge,
    Kelli

    September 30, 2008 at 6:12 pm |
  28. Lynn

    I am 38 years old. I have 6,000 in an IRA and am coming into about 50,000 from a QDRO. I have 14,000 in credit card debt at 0%, 7,000 car debt at 6% and student loans of 6,000 at 8%. What is the best way to use this money?

    September 30, 2008 at 6:12 pm |
  29. Michael

    It it true that if the government gave every single person in the US $1,000,000, the bail out would only cost us $300 billion?

    September 30, 2008 at 6:12 pm |
  30. Maureen T

    My husband and I are in our middle 40's. We owe approximately $100,000.00 which includes a line of credit, a car and credit cards. Our home is mortgage free. Would you suggest we take out a mortgage on our home and pay off all the debts and have one low payment?

    September 30, 2008 at 6:11 pm |
  31. Dana

    Suze-

    I have $32,000 in credit card debit. at 12% interest I currently have $48,000 in mutual funds. I have already contributed the max to my 401k this year and my annual income is $220,000 a year. Besides my home the only other loan I have is my car and no other credit card bills.

    My question is, do I put $3200 a month towards my credit card bill, or sell my mutual funds and payoff the credit card in full and invest the $3200 a month back in mutual funds?

    September 30, 2008 at 6:11 pm |
  32. Sandra

    Dear Susie-
    I am 66 years old, retired and have an income of about $65,000 with SS. and pension plus my husband has a similar pension which is not transferable if he passed. I have an annunity worth about $120,000 in a AIG Valic account and some money in Ameriprise. The financial person at Ameriprise wants me to take my money out of the AIG annunity and place it with Ameriprise with about 70% in a mutual fund and the rest ina fixed annunity. Is this a good plan, or should I stay where I am? Thanks

    September 30, 2008 at 6:09 pm |
  33. Mary Lawless

    Obama stated today that all Americans should work together to improve the economy. What can the average American do as an individual to make change in the short and long run ?

    September 30, 2008 at 6:03 pm |
  34. Anne, Fairfax, VA

    Hi, Suze – I currently max out my 401(k) contribution. Is it wise to temporarily drop that down to 6% (50% of which is matched by my employer) and put the rest in a savings account (I'm with ING)? Would that be too fiscally conservative? I'm only 38 and could certainly ride out the erratic nature of the stock market right now.

    September 30, 2008 at 6:03 pm |
  35. Dave

    The market lost 1.2 trillion dollars yesterday. Congress was looking to spend 700 billion dollars to fix the market. Too bad the market didn't just fix itself and keep the extra 500 billion...but that would have been too easy...

    September 30, 2008 at 6:02 pm |
  36. Sandra Egger, Corralitos CA

    I currently bank with a local credit union. The bank is NCUA and ASI insured. Do I have the same security as a FDIC insured institution?

    September 30, 2008 at 6:01 pm |
  37. MacGordie

    QUESTION:
    My associates claim I'm an evil predatory investor by having focused my attention on sub-prime investments for maximum return, and I am as equally responsible for the Wall Street meltdown as the CEO's themselves. Should I feel guilty or just find a whole new set of associates?

    September 30, 2008 at 5:59 pm |
  38. kathie

    My 28 year old daughter just sold her condo and walked away with $45,000. She moved in with me and would like to move out in about a year. She recently divorced and has about $3,000 worth of bad debt in her own name and a creditor trying to get her to pay off a $10,000 car loan that she cosigned for her ex before the car was repossessed . Can she reestablish her credit without paying off the car? How can she reestablish her credit in order to get a mortgage in the future? Where is the best place to put the profit from the house?

    September 30, 2008 at 5:55 pm |
  39. Terry

    Hi Suze,

    I am 61, retired and have funds in a 401K through the company I worked for, however it is not the type that I can make contributions too. Since all of this financial uproar has taken place I have lost a little over $5,000 between August 31 and September 30. I have my funds divided between balanced and equity. Would you suggest dividing my funds three ways, into balanced, equity and fixed.

    Thanks for your time and thanks for you.

    September 30, 2008 at 5:53 pm |
  40. Karen

    I am 54 years old and would like to retire in 4-5 years. In addition to my UCRS retirement I also have a 403B with Fidelity. My 403B is divided at 61% UC Equity and 39% UC Balanced Growth. Due to the instability of the market should I transfer the balances to a UC TIPS fund until the market stabilizes – whenever that might be? I'm nervous about losing more or not recoup the loss before 5 years.
    Thank you.

    September 30, 2008 at 5:49 pm |
  41. Rick of Portland

    I have a $180000 IRA with Wachovia Finance that was $200000 a year ago. I would like to retire in four years. IRA is diversified over many types of investments. Should I keep there or move it to something more secured but with small growth?

    Thank You

    September 30, 2008 at 5:49 pm |
  42. larry

    .
    Hi Suze,

    Is the current financial situation having any effect on university endowments, is it a risky investment?

    September 30, 2008 at 5:45 pm |
  43. Michael DesJardins

    If this Bail-Out plan passes and the Treasury Department buys all of these mortgages that have foreclosed....who will cut the grass? We had a smaller version of this in New Orleans after Katrina. The State bought people's homes for resale. The next thing you know the neighbors were complaining that the grass was not being cut and the houses had vagrants or were an eyesore. No one planning the program had thought about the duties of ownership for so many homes. Has the Treasury Department got a plan?

    September 30, 2008 at 5:42 pm |
  44. Lori

    Hi Suze, I've got my 401K in 100% aggressive growth and won't retire for 20 years. Do I leave it as is or do I change the distribution now when the market is at it's lowest and lose potential earnings?

    September 30, 2008 at 5:39 pm |
  45. Jeremy from Columbus, OH

    Suze,

    I currently have my paycheck set up on direct deposit. If this thing gets worse should people be concerned that they won't be able to get money out of our bank accounts? I've heard some people say that if things get worse people could go to the ATM and not be able to get anything. Fortunately, I have very little debt, but I do live pretty much paycheck to paycheck so even a few days delay on getting funds from my paycheck would be disasterous.

    September 30, 2008 at 5:38 pm |
  46. GINGER PIERCE, MADISON ALABAMA

    I am 46. My house is valued at 121,500. I owe 66,000. My company's 401k matching is at Wachovia. Can't do much about that if I want to keep the matching. What I'm concerned about is a previous 401k that I rolled to Edward Jones in an IRA that is diversified in Franklin Templeton and I've seen it (original was $18,000 last year) fall to around $14,000 in the last year (mostly in the last 4 or 5 months). Should I right now ask them to move it to something safer or just let it ride??? I plan to have to work 21 more years. I have about $12,000 in credit debt and I know I need to work on that. What I'm interested in is whether I should just let the EJ IRA ride or pull out now into something safer???? My debt is from recovery from a bad divorce. Please don't use my name on air.

    September 30, 2008 at 5:37 pm |
  47. Gary Lowy

    I understand that we need a financial solution to our credit crunch. How do I grasp why the market dropped 777 points one day which supposedly sent a message to Washington to resolve the problem and then rose 490 points the day after without a bailout being completed. How do we explain the market rise today?

    September 30, 2008 at 5:36 pm |
  48. Jessie

    My fiance and I currently own a very small modest home worth about 110,000 in Racine WI. We have one daughter and are planning more children. Neither of us has great credit and we are currently planning on selling our home and buying an exsisting home worth about 230,000 to 240,000 for more space. To do so we need to use an FHA loan. Our yearly take home base is about 115,000 and we will put 3 % down on the new home. With the current financial crisis is it smart for us to continue our plan and get into a bigger home that we can fit comfortably. We are concerned that if we wait out the financial crisis, we won't beable to get a loan because only goot credit scores will be able to obtain credit. What would you recommend.

    Thank you

    September 30, 2008 at 5:36 pm |
  49. Jack

    Suze If we bail out Wall Street. What will keep them from going wild again. The feds and the tax payers will save them again. Already the Stocks have gone up over 400,points. By timorow it probaly will be a full recovery. They do not need us.
    JWN

    September 30, 2008 at 5:35 pm |
  50. jpm

    Glenn Cash cannot make even a simple computation. There are approximately 140M individual/family filings each year. 500K per filer works out to be on the order of $70 trillion (with a T) dollars. Your formula only works with $5000 per filer for 700B... please do the math and don't make such ridulous and provocative statements.

    September 30, 2008 at 5:34 pm |
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