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Q. To rent or buy. How do you decide what to do in this crazy housing market?
A. If you’re not going to be there five years or more, I’d rent. If you are going to be there at least five years, look at what it costs to rent versus buy in your part of the country. You need that time horizon to weather the ups and downs. The appreciation may not be there. I bought in May 2005 (in Westchester County, N.Y.) and I was right at the peak. So if I sold today, I wouldn’t recoup. But I’m not leaving.
Q. You’ve got one teen in high school and one going off to college this fall. What are your money guidelines with your own kids?
A. My kids have debit cards and have been managing them online for a while. That’s how I transfer money to them, an electronic allowance, so to speak. With their cards, they don’t have overdraft protection. If they run out of money, the transaction is denied.
For college, I will probably add my son as an authorized user to one of my credit cards and make sure it reports to the credit bureaus (to build up his credit score).
Q. Now that the Supreme Court ruling upheld the Affordable Care Act, what should consumers be doing to help lower their health care costs?
A. People should be shopping around for health care policies. They shouldn’t believe the deal offered by their employers is the best one. For some families, it’s better to have one spouse on one employer’s plan and the other on a different plan.
I’d start with EHealthInsurance.com, which has (a large) selection of policies. You can get a sense of rates in your state and figure out if you can get a better deal shopping outside your employer’s plan.
Q. Reverse mortgages are getting scrutiny by the new Consumer Financial Protection Bureau, which is concerned that some seniors may not understand what they’re getting into. Any advice on reverse mortgages for those over 62?
A. I think they’re certainly not a panacea. They tend to be expensive. You’ve always got to ask if you’d be better off by trading down to a smaller house or moving to a city that’s less expensive. Take a look at your options.
If your parent is considering a reverse mortgage, go with them (to the mandatory HUD-required counseling session). Reverse mortgages are complicated. Be sure everyone in the family understands.
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