TODAY | April 11, 2012
AL ROKER reporting: Time now for TODAY'S MONEY 911. That's where we tackle your financial problems. From worries about debt to savings , we've got the answers for you.
Jean Chatzky is TODAY's financial editor and the author of "Money Rules: The Simple Path to Lifelong Security ." Farnoosh Torabi is a personal finance expert and the host of "Financially Fit" on Yahoo! And Sharon Epperson is CNBC 's personal finance correspondent. Good to see you ladies.
Ms. JEAN CHATZKY: Hey, Al.
SHARON EPPERSON reporting: Good to be here.
Ms. FARNOOSH TORABI: Nice to see you.
ROKER: All right. Let's get started. We're going to go to Skype . We've got Barbara skyping in from Ann Arbor , Michigan . Barbara , good morning, and what's your question?
BARBARA: Good morning. I've been in medical treatment for about two years and although well-insured I've accumulated about $8,000 in hospital bills. Since I'm unemployed and I do want to pay the bill and do the right thing , I was wondering can I withdraw monies from an IRA account that I have without penalty to pay this bill?
ROKER: Jean, what do you think?
Ms. CHATZKY: You may be able to do that. You'd have to prove that you're disabled, and I'm assuming that you probably have the documentation in order to do that. The question is do you actually need to do that? And before you withdraw the money from your IRA , I want you to go to this hospital and I want you to talk to them about a payment plan or other things that might be able to make the payments tenable for you without having to pull the money out of your -- out of your IRA . I mean, above all, we don't want this to be an additional stress on you healthwise.
ROKER: Sure. Mm-hmm.
Ms. CHATZKY: So...
Ms. CHATZKY: ...make it as easy on yourself as possible. And I hope that you get better really soon.
BARBARA: Thank you so much .
Offscreen Voice: Yeah, definitely.
ROKER: That's right . And a lot of hospitals have public advocates to help out.
Ms. CHATZKY: Exactly.
ROKER: All right. All right, Barbara , good luck and best of health. Now let's go to the phones. We've got Joseph in Atlanta calling in. Joseph , good morning, and what's your question?
JOSEPH: Good morning. I inherited a coin collection I want to sell. How do I find a dealer who will give me a fair price and how do I know whether the silver...
EPPERSON: Mm -hmm.
JOSEPH: ...or the coins' uniqueness is more valuable?
ROKER: That's a really good question.
Ms. CHATZKY: Yeah, I have a coin collection .
Ms. TORABI: Well, he -- good morning. I have a good resource for you, it's the American Numismatic Association . Their website is money .org. They tell me that you should call their number, actually, it's
1-800-514-COIN. Their website's going under a little bit of maintenance right now. But call that number, 1-800-514-COIN, OK, and they're going to refer you to some local dealers in the Georgia area that are members of their -- of the ANA. These dealers follow the same code of ethics that all their dealers follow across the country. You want to meet with at least a couple of dealers and they'll appraise your coin collection , factoring in not only the current price of silver but also, you know, based on the rarity of your collection, they'll also incorporate that. Additionally, I would also attend a fair or a -- what are they called?
ROKER: Coin convention.
Ms. TORABI: A convention, a coin convention. And actually, the Georgia chapter of the ANA is having a fair this month, the end of the month.
Ms. TORABI: I just looked it up for you. So go to gamoney.org and you'll be able to find out how to get there and, you know, all the details. But yeah, this way you'll get a very comprehensive evaluation and hopefully you'll make some money .
ROKER: Way to go, Joseph.
EPPERSON: And sometimes holding on to a little bit of -- a few of the coins perhaps...
ROKER: Mm -hmm.
EPPERSON: ...just as an alternative investment, everyone's looking at another way to invest these days.
Ms. CHATZKY: Mm -hmm.
EPPERSON: And that's a great, great idea to keep that coin collection , at least part of it...
Ms. TORABI: Yeah.
ROKER: All right. Great idea.
EPPERSON: ...for the longer term.
ROKER: All right, Joseph. Thanks so much. Let's go now to the phones again. Juliette is right here in the Bronx . What's happening , Julia ? Good morning.
JULIETTE: Good morning, Al . And thank you, panel. And my question is should I use my entire tax refund to pay down my credit card debt or should I save it if I can afford to pay more than the minimum each month?
ROKER: Sharon :
EPPERSON: Well, I have a couple questions for Juliette . First of all, I wonder how much credit card debt you have and how much do you think your refund's going to be?
JULIETTE: Well, I have a little under 5,000 in the debt and my refund should be about 3500.
EPPERSON: And do you have emergency savings already or retirement savings , any savings plan?
JULIETTE: Yes, I do. I have a -- I have emergency savings , yes, I do.
EPPERSON: Well, that would be my first thing is to make sure that you have enough emergency savings . Since you already do, I think you're probably -- your interest rate on the credit card debt is going to be higher than you're going to get on, say, your retirement savings account . I would pay down that debt as much as you can. And what I would continue to do, though, is make those monthly payments that you're making to the credit card issuer now to yourself, open a Roth IRA , start putting that money into a retirement savings account for yourself where you can take that money out any time you want and then at 59 1/2 take it out tax-free. And make sure that you -- when you do get this refund, it is such a big refund, you don't really want that, you want to try to break even when tax time comes, that's the ideal thing to do, so go to irs.gov, make sure you have the right withholdings.
ROKER: Mm -hmm.
EPPERSON: And if you do like to get that big refund because you really want that for perhaps for savings down the road, you can actually do it directly, a direct deposit to an IRA . So once you open that IRA next year if you get a refund, just put that straight -- that money straight into that retirement savings account , you'll be in a good place.
ROKER: And this way no relatives get to...
EPPERSON: That's right .
Ms. CHATZKY: Exactly. Exactly.
ROKER: OK. All right. Let's hit Skype one more time. Elise from Memphis skyping in with us. Good morning, Elise .
ELISE: Good morning.
ROKER: Hi. What's your question?
ELISE: When my -- when my husband and I moved to Memphis for optometry school, we were able to buy a foreclosed home that we've been fixing up. And now that he is close to graduating, we are selling the house and expect to come out with a $50,000 gain. We would like to know what would be the wisest thing to do with that money . Should we use it to help pay down student loans, use it for a down payment on a future home or use it to start -- help start up an optometry practice?
ROKER: Wow, good for them.
Ms. CHATZKY: Yeah, it's fantastic. And clearly you have a knack for real estate, so you may want to continue down that vein some future point in your life. But right now, I like option number three. I think you should work on building your income and the way that you're going to build your income, which could buy you a home in the future and pay down those student loans in greater regard in the future is to get into that optometry practice and really gear up and start earning some money so that you can satisfy all of these goals down the road. But keep a finger in real estate, especially right now.
Ms. CHATZKY: Didn't you hear, Warren Buffett wants to buy a million homes.
Ms. CHATZKY: So seems like it's a really, really good idea.
Ms. TORABI: Exactly.
ROKER: Wow. I think they're -- start their own version of flipping out.
Ms. CHATZKY: Yeah. There you go.
EPPERSON: That's right .
ROKER: All right. Now let's go back to the phone lines. We've got Veronica , Chicago , Illinois . Veronica , your question?
VERONICA: Hi. Good morning. Every year, my husband and I attend some type of fundraising gala and tickets are normally 200-plus. We also buy raffle tickets during these events for cash prizes or trips. Is any of this tax-deductible?
ROKER: Farnoosh :
Ms. TORABI: Yeah. So a few things. The ticket that you purchase to attend the gala, part of that may be tax-deductible, probably not all of it. And sometimes on the ticket the organization will say, you know, this costs $200, but the tax-deductible portion is maybe only 100. And what you want to figure out is if that number's not on the ticket is how much the organization paid to get -- have you there, so how much, you know, your meal cost, the entertainment, basically the fair market value of the goods and services that you received at that gala has to be subtracted from the purchase price of the ticket, and that amount is what you can report on your tax return . And those raffle tickets, I'm sorry to say, are not tax-deductible, the IRS considers raffle tickets just like lottery tickets, games of chance.
Ms. TORABI: So, you know, if you win something, great, and if you do win something you have to probably report that as income...
ROKER: Ooh .
Ms. TORABI: ...on your return, so it's a double hit.
ROKER: All right.
EPPERSON: But she's giving back.
Ms. TORABI: Yes.
ROKER: That's it.
EPPERSON: So that -- I mean should be applauded for that.
ROKER: Very nice.
EPPERSON: I mean, that -- she's supporting these organizations...
EPPERSON: ...and that's always something good.
Ms. TORABI: Very -- yeah.