Your Questions Answered

Gary Kaltbaum
This week Gary Kaltbaum, president of money management firm Kaltbaum & Associates, answers YOUR money questions. Ask FNC's business team your questions by e-mailing and check back each week. Plus, tune in to "The Cost of Freedom," Saturday starting at 10am ET.

1) Is the rumored housing bust, just that? I'm planning to wait 'til next year to sell my house. Should I sell now? — Marissa

I would let your own situation dictate policy, not other's opinions. For every person that says the housing market is going to crash, there is another that says the boom will continue for years. Risk has most definitely picked up because of how big the move has been, but that doesn't mean the boom cannot continue.

2) We are a small law firm (three attorneys / three staff). We would like to implement a 401K, but are discovering that the administration cost is quite high. Do you have any suggestions? — Janice (Albuquerque, NM)

I would suggest looking into a SEP IRA for the following reasons:

• It is ideal for the self-employed or small businesses with variable earnings.

• There is minimal paperwork.

• Any business entity can establish (profit, nonprofit).

• Contributions can be made by the employer or employee. Employee contributions are subject to the same rules and regulations as Traditional IRAs. Employer contributions are deductible up to 25% of the first $200,000 of compensation or $42,000, whichever is less.

• The plan contribution limit is 25% of first $200,000 of compensation or $42,000, maximum allocation per participant.

• There are not government reporting or discrimination tests.

• There is no employer set-up or administration.

3) What is your opinion on getting disaster insurance? — VM

In riskier areas, it is already mandatory. For example, there is flood insurance if you are in a flood zone and hurricane insurance in certain states as well. After seeing what has occurred over the past couple of years, having disaster insurance could not hurt. It can only help. It's all about erring on the side of caution...just in case!

4) My husband and I are retired senior citizens. We are both on disability and live in a condo that we owe about $17,000 on. My question is this: Since we do not have a lot of money in our savings, would it be better to sell now and make a profit, bank it, and then rent? I figure NOW would be the time to do it since I hear on news that real estate will be starting to be reduced in value. My husband doesn't agree with this because he has a fear we would not be able to keep up on rent, but here we have condo dues, taxes, upkeep etc. In renting we would not have those expenses. Thank you so much. — Luanne

I would do what is best for your particular situation and not worry about the market. If you would sleep better at night without the expenses, then that would be the best way to go.

Gary Kaltbaum is president of money management firm Kaltbaum & Associates. He can be heard nightly on his nationally syndicated radio show "Investors Edge" on over 50 radio stations. He is a regular on FNC's Business Block. Visit Kaltbaum's Corner on for more.