Check references, qualifications of 'financial planners'

Dear Bruce: I recently attended a seminar regarding financial planning. In order to understand my finances, the financial planner wants me to bring all of my financial records to a free consultation. He wants all of my accounts and all of the account numbers, including my Social Security number. Is this normal? I do not know this man, and I would like to check him out. He works locally in California, but his degrees are from Belgium. - R.W., California

Dear R.W.: You call this individual a financial planner. You should know that anyone can call himself a financial planner, including your plumber. In almost all jurisdictions, there is no legal definition. A certified financial planner is another matter.

As to your account information and account numbers, I wouldn't give them to him. If he wants a general overview of your situation and how your money is invested, that's legitimate given the fact that he would want to make suggestions that might be better than what you currently have. I see no reason why he needs account numbers and certainly not Social Security numbers. Further, I have no problem with these “seminars.” Advertising is a very valid and honorable way to try and attract new business. I would demand of him personal references in your area, and consult with the local authorities to see if there are any complaints against him. Check licenses he holds and which, if any, are required.

Dear Bruce: Are withdrawals out of individual retirement accounts taxable regardless of your age? - F.H., Las Vegas

Dear F.H.: If the money deposited into the IRA was before tax dollars were taken out, then whenever it is withdrawn, it is subject to regular income tax. The exception would be funds earned in a Roth IRA.

Dear Bruce: If you own a couple of shares of stock in a very old company that has changed its name once and has been sold several times, do you need to contact an attorney or a stockbroker? I inherited this stock from my husband in 1974 when he died, and his grandfather bought him these shares when he was a boy. One stockbroker that I called said it was probably worthless, but the hotel is still in existence in the very town where I live. - Reader, via e-mail

Dear Reader: There are numerous firms that research stocks. If you search on your computer for “stock certificate research” you can find many companies with prices ranging from $35 to $100 to do the research for you. You're going to have to invest the relatively modest amount of money to make this determination. If it were me, I would do so.

Dear Bruce: I am having short-term financial difficulty. I see myself getting out within the next 60 to 90 days. Is there a template for a letter that I can send to the credit card companies explaining the reason for my shortfall, including date of when it should be taken care of? The same goes for asking for a reduction in interest rates. I have not and will not file for bankruptcy; that is not the way I was raised. - D.S., via e-mail

Dear D.S.: I know of no standard template, but let's take the other part of your letter. As soon as you start asking for a reduction in interest rates, you're looking for serious credit blemishes. If you're not behind at the present time, no one is going to talk to you about that. If you are, they will, at times, make concessions, but you can be certain that it will take a long time to get that off of your credit report. In your letter, simply state the facts: that you are writing to them because you are facing temporary financial difficulties. Tell them why and how this will end after a three- or four-month period and that your intention is with regard to their bill to retire it. Most companies appreciate a customer who lets them know without being prodded precisely what the circumstance is and what the outlooks are. In the event that you are looking for an interest reduction, you very likely would be better served by having a third party negotiate that deal. There are some nonprofits that are reputable, and I have no problem suggesting that you use them. You can always have an attorney or an accountant act on your behalf if you choose. You should be congratulated for facing up to your situation. Many don't. Good luck.

Dear Bruce: My husband's employer contributes 5 percent of his annual salary to a pension for him. He's been employed there for two years and will not be vested until five years. The company also offers a 403(b). We have been a little lax (actually, a lot) about our retirement savings. My question is: Should we put additional money into the tax-deferred 403(b) or open a Roth IRA? My husband is 56 years old. Thank you for any advice. - R.D., via e-mail

Dear R.D.: The key to the answer to your question is in your letter when you say “we've been a little lax (actually, a lot) about our retirement savings.” You should take advantage of every possible savings vehicle and cut every possible expense in your current life. If you can get into a 403(b) and have some present tax relief, fine. If you are under the income requirements for a Roth IRA, approximately $110,000 single and $160,000 married, by all means contribute the maximum for both of you. This very likely will create a pinch but unhappily, you'll have to pay the piper now since you didn't give retirement as much attention in your earlier years as it deserved.

Bruce Williams is a national radio talk show host and syndicated columnist. He can be reached at bruce@brucewilliams.com.