Ask Money

I'm 25. After listening to your show, I decided, Hey, I ought to start saving for retirement, so I opened a Roth IRA. Now my question is: Is that it? Do I just put money in there and it grows? Or is this the type of thing where, once it's created, I then have to allocate the money in there to various investments? If it's the latter, what the HECK should I direct my first investments toward? Love the show, cheers! Sam, Concord, NH

What's a good book to give to a loved one in his late 20s who just doesn't get personal finances? I keep suggesting that he listen to Marketplace Money, but I think maybe I'd do better getting him a book. Any suggestions? Marion, Philadelphia, PA

I have both private and federal student loans from undergrad and law school... I was wondering if you have any advice as to how best to manage this debt? I'm 28 and single so my financial obligations are otherwise relatively minimal for now, but due to my debt-to-income ratio, I've been unable to really lay away much in the way of personal savings in the 3+ years I've been out of school, let alone start saving for retirement. I'd really appreciate any advice you might be able to give to someone in my situation. Thank you! Kira, New York, NY

I am a 58-year-old female, currently employed. I've got approx $100,000 saved in a 401(k) plan. I've had to take out a student loan to cover the cost of one year toward my MBA, which I have completed. Because of the student loan, I've decreased the 401(k) contribution -- normally 25 percent of my pay -- to 6 percent. I'll have the student loan paid off by April 2012. Since I am worried sick that I won't have enough when I retire, do you have suggestions about how to catch up? Danica, Houston, TX

A rare treat for listeners! Tess discusses the ins and outs of 2011 with all four of our regulars, Chris Farrell, Kathy Kristof, David Lazarus and Liz Weston.

We have saved some money for a house deposit in 2-3 years. We have a 3.99% mortgage on our current place. Should we invest our down payment for our next house or should we pay off our current mortgage? We are both conservative investors. Tom, Boston, MA

My wife and I are transferring our Roth IRA accounts from our current institution to a new one in order to avoid a yearly maintenance fee that has been increasing every year. After selling off the funds, my current Roth IRA institution claims the funds must "settle" for a period of 3 days. Can you please explain to me what this means and if I could demand that they skip this settling and simply send me the distribution check so I can more quickly move it to the new institution? Patrick, Sheboygan, WI

My fiancée has a student loan that defaulted but is now paying on it every month. She has been told that it can't be rehabbed because of the default (even though others that have defaulted can rehab a second time). She doesn't make that much money, and she is filing bankruptcy because of various debts. She knows she can't bankrupt the student loan. What are the options other than making regular monthly payments, or not paying? Brian, Waterville, ME

For 2012, I'm switching to a high-deductible health plan and will enroll in the associated health savings account. What investment strategy do you recommend? Cash, bonds or total market? Ken, Portland, OR