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Refinancing your mortgage? Opportunity knocks
mortgage rate dip
Mortgage borrowers are getting the lowest rate mortgages of the year right now.

Homeowners seeking to save some on mortgage payments can celebrate: The average rate for 15-year, fixed-rate mortgages, one of the most popular refinance products, has dipped to its lowest level since June 2013.

The 15-year fixed hit 3.08% according to Freddie Mac's weekly survey, a tenth of a percentage point lower than last week and down sharply from 3.36% early in the month. Rates for 30-year loans dipped 0.05 percentage point to 3.92%.

"For borrowers hoping to pull the trigger on a refinance, this spate of the lowest mortgage rates since June 2013 is a pretty good opportunity," said Keith Gumbinger of, a mortgage information company.

With equity markets on a roller coaster and bad economic news roiling Europe, investors have fled to safe havens in bonds and mortgage-backed securities, depressing interest rates.

CitiMortgage chief: Housing market 'stagnant'

It's a boon for existing homeowners with mortgages a few years old. Borrowers can swap their old 30-year loans at, say 5% or more, for spanking new 15-year loans at the current rate.

Related: For $65 million, you can buy Miami's most expensive home

Their payments may not fall -- as a matter of fact, they'll go up by about $340 a month for someone refinancing a mortgage balance of $200,000. But instead of making payments of $1,075 a month for 25 more years, they'll pay $1,423 for 15 years and then be mortgage free. So, if they can afford the higher monthly bills, borrowers can save more than $137,000 in interest over the term of the loan.

The opportunity may not last long, though, according to Gumbinger. Markets are very volatile right now, so rates could change quickly.

"It pays to be prepared to jump and lock in a rate when they come along," he said.

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You can stash up to $18,000 in your 401(k) next year
The retirement checklist

Super savers and rich people will be able to put even more money in their 401(k)s next year.

Starting in 2015, contribution limits for the tax-deferred retirement accounts will increase by $500 to $18,000, the Internal Revenue Service announced Thursday.

Meanwhile, the "catch-up" amount that workers age 50 and over can contribute to their plans will rise to $6,000 from $5,500, for a total of $24,000 next year.

Of course, not many workers can afford to save those maximum amounts. In 2013, 12% of Vanguard's more than 3 million 401(k) participants contributed the max allowed (not including any match from their employer), according to the company's annual How America Saves report.

Vanguard's report found that 36% of 401(k) savers earning $100,000 or more contributed the max, while only 2% of those earning between $50,000 and $74,999 maxed out their contributions.

Calculator: Will you have enough to retire?

Stephen Blakely from the Employee Benefits Research Institute noted that some people may not be able to contribute the maximum savings because their employer limits how much they can put in a 401(k).

The IRS said it was increasing the 401(k) contribution limits to reflect increases in the Consumer Price Index, which measures inflation. Yet the agency said the price increases were not enough to merit raising the contribution limits for traditional and Roth IRAs, which will remain unchanged at $5,500. The IRA catch-up contribution of $1,000 will also stay the same.

However, the IRS is raising the income levels that determine who can get a full deduction on their IRA contributions.

In 2015, the deduction will phase out for single taxpayers who also have a workplace retirement plan, like a 401(k), with an income of between $61,000 and $71,000, up from $60,000 to $70,000. For joint filers where the spouse making the IRA contribution also participates in a workplace retirement plan, the deduction will phase out at incomes of $98,000 to $118,000, up from $96,000 to $116,000.

Related: Social Security benefits to increase by 1.7% in 2015

More people will also be able to contribute to a Roth IRA, which allows after-tax contributions.

For 2015, single taxpayers earning less than $131,000 can put money into a Roth account, up from $129,000 this year. And those earning less than $116,000 (up from $114,000 this year) can make a full $5,500 contribution. Meanwhile, married couples filing jointly can contribute to a Roth if they earn less than $193,000, up from $191,000. And they can make the full contribution if they earn less than $183,000, up from $181,000.

It will also be slightly easier for taxpayers to qualify for the so-called savers credit of up to $2,000, which is aimed to help low- and middle-income retirement savers. In 2015, the credit will be granted to married couples with income of less than $61,000 and single filers with incomes less than $30,500.

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How to avoid homebuyer's remorse
homebuyers regrets
The most common homeowner complaint is that the house is too small.

Big purchases often come with big expectations.

So it's no wonder that in a recent survey of 2,000 homebuyers, a whopping 80% said they regretted at least one thing about their home.

The number one complaint: The home just isn't big enough, mortgage information site found. Others complained about a lack of closet space or that the place didn't have enough bathrooms. Bad neighbors were also a problem, as was a substandard school system.

A lot of those issues could have been avoided.

Related: Mansions for under $1 million

Take Kenny Kline, who thought he got a bargain on a fifth floor walk-up apartment in Brooklyn, N.Y., last year. At $720,000, the two-bedroom seemed like a good deal in Brooklyn's competitive real estate market.

But walking up and down the five flights of stairs grew tiresome quickly.

"I'm only 29 so I thought I could handle it, but trudging up those stairs multiple times a day with groceries, packages, furniture, whatever, has really taken its toll," he said. "Then, I hurt my back. That made the epic journey up and down even more insufferable."

He plans to "tough it out for at least another year," he said, not wanting to repeat the moving process -- and all of the costs involved -- so soon.

Related: 5 things to consider before tapping your home for cash

Of course, some factors, like bad neighbors, can't be anticipated. And some conditions change over time. Nearby property may be developed into a shopping mall or freeway, for instance.

For Amanda Haddaway and her husband, privacy became a big issue when they lived in their Frederick, Md., townhouse. They could look out their windows right into the units of neighbors, who could look into the Haddaway's home just as easily.

The two also needed more space. When they had moved in together, the townhouse just couldn't accommodate their combined stuff.

So they sold the home and built a big, new one on a six-acre lot in Woodsboro, Md.

"It's definitely much more peaceful where we live now; our closest neighbors are a half mile away," said Haddaway. "And we've been able to get rid of our storage unit."

Freelance writer Lauren Bowling bought a house in Atlanta in July 2013 when she was still with her fiancé. But three months later, they broke up.

"I don't hate my house but, as a single woman, it is way more space, upkeep and energy than I need right now," she said.

Related: Crowdfunding your home renovation. Should you do it?

She intends to keep it for a while since she'd like to try to recoup some of the money she spent on the purchase and renovations.

To keep you from buying a home you'll regret, Brendon DiSimone, a New York-based real estate broker and author of Next Generation Real Estate, offers up these tips.

Don't give in on your core requirements. If you know that having three bathrooms is important for your happiness but the house only has two, keep shopping.

Don't let yourself fall in love with a home that doesn't match your needs. Regret may not set in immediately but when it does, the fix, like adding a bathroom, might cost you plenty.

Don't cave in to a partner or spouse. If you believe you will be unhappy in the new house, don't let your wife of husband talk you into buying it. It will only cause resentment.

Know your give-in points. Everyone house hunts with a wish list, but there are some items that can be compromised. Tiny kitchens might be a deal breaker if you are an avid cook but maybe you can live without a den.

Calculator: Was my home a good investment?

Don't get caught up in the heat of the moment. Overpaying is one of the biggest sources of remorse, especially if buyers get involved in a bidding war. Bidding against other buyers can be exciting and entice homebuyers to throw their budgets out the window. But sometimes, it becomes more about winning than how much the house is worth to you.

"Ask yourself, 'Do I really want the house or do I want to beat somebody else out?'" he said.

Don't lose your edge. Once a shopper makes the decision to purchase a home, they sometimes overlook major issues. If the inspector finds dry rot in the joists or the appraisal comes in much lower than the sale price, stand your ground: either pull out the deal or get the seller to lower the price to reflect the cost of the repairs.

Do your research. These days, there's a ton of information available on the web that can help you in your search for a new home. Sites like Trulia and Zillow offer all sorts of stats on the quality of school systems, walkability and access to restaurants, as well as crime, that will help you assess whether a neighborhood or area is right for you.

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Will your retirement savings last?
Will your nest egg last?

My financial adviser ran Monte Carlo simulations that say I have an 85% chance my retirement savings will last into my 90s. Is an 85% probability safe enough? -- Tracey G.

The short answer is yes. Although there's no official benchmark for the appropriate margin of safety, I think most advisers would say that an 80% to 90% probability of success is about right for most people.

Fall below 80% and you could find yourself short on money later in retirement. Shoot for a chance of success higher than 90%, on the other hand, and you may end up sitting on a big pile of savings very late in life.

That may not sound like a bad thing, but it could mean that you lived more frugally than you had to during your career and stinted more than necessary in retirement. In other words, you might have been able to spend more freely and enjoy yourself more during both your working and retirement years.

That said, there are some caveats to the probability numbers that advisers generate with their retirement planning software -- or that you can get on your own from calculators like those in my Retirement Toolbox. One major caution: your chances of success can drop pretty dramatically if your nest egg's value takes a sharp dive. Given the stock market's recent volatility, that's a possibility to keep in mind.

Before I get into the nuances surrounding these projections, however, I'm going to briefly explain Monte Carlo simulations.

Related: Investing smart in a rocky market

Named after the famed casino in Monaco, Monte Carlo simulations attempt to incorporate the variability of real life into financial projections. The adviser plugs in such information as how much you saved, how much you're saving on an ongoing basis (if you're still working), how you invest that money, when you plan to retire, how much you plan to withdraw from your savings once you retire and how long you estimate you'll need your savings to last.

Once all this information is entered, the software or calculator creates hundreds or even thousands of different scenarios, or pathways, that your nest egg could take. Some reflect conditions in which the market performs well and inflation remains tame; others factor in a market crash and higher inflation. In some of these scenarios, you run out of money early in retirement. In others, you may never run out. But in most, the length of time your dough lasts falls between these extremes.

So, for example, if you're 55, plan to retire at 65 and want your savings to support you at least until age 95, you would plug in all the information about your savings, investments and projected spending, the software would crunch the numbers and...voila! It will tell you the probability that your savings will sustain you to 95.

Calculator: How much will I need for retirement?

If your savings isn't able to generate the income you need to support your spending until age 95 in 15% of the scenarios the software runs, then your probability of success is 85%. If you run short in 30% of the scenarios respectively, your probability of success is 70%.

Now for those nuances.

The results you get when you run Monte Carlo simulations seem very exact, but remember: They're long-term projections based on the assumptions you plug in. So they're not as precise as they seem. No one really knows how the markets will perform over the next 10, 20 or 30 years. Or what inflation will do. Or whether you'll be able to stick to your savings plan or face large unanticipated expenses in retirement (such as larger-than-expected health care costs).

Related: Why women are losing the retirement savings game

So you want to try to keep your assumptions as reasonable as possible -- that is, no 10% or 15% annual returns or overly aggressive investment asset mixes, no unrealistic savings rates or a retirement budget that not even an ascetic could stick to. And you should think of the percentage chance of success more as a possibility than a guarantee.

You can see how your chances of success might rise or fall if you (or the markets) behave differently. Save more during your career, and you'll see the probabilities rise. Likewise, if you tone down spending in retirement.

Keep in mind too that the percentage probability of success that everyone focuses on tells you only whether you'll be able to draw a given amount of income up to whatever age you plug in. It doesn't tell you how much of your savings will be left at that point.

So you may have an 85% chance of success and have $1 of savings left at age 95 in some scenarios. In others, you could have an 85% chance of success and still have nearly as much money as you started with at retirement -- or more.

That's important to know because you're probably better off spending more earlier in retirement than ending up at an advanced age with a huge savings balance, unless you're really set on leaving a big stash to your heirs.

You need to be especially careful if your portfolio's value takes a large hit, especially just before or early in retirement. For example, a 65-year-old who plans to follow the 4% rule -- that is withdraw 4% of his nest egg's value initially and adjust that amount annually for inflation -- could easily see the chances of his portfolio lasting 30 years drop by 25%, if his portfolio took a 20% dive on the eve of retirement. The combination of the investment loss and withdrawals would so deplete the value of the portfolio that it can't recover sufficiently even when the market eventually turns around.

Related: The 3 biggest risks every retirement saver should know about

Given how much your probability of success can fluctuate for any number of reasons, you should have your adviser rerun the simulations -- or rerun them yourself -- every year or so, using more current information about your age, savings balances and such.

You don't have to alter your plans if your odds of success rise or fall just a bit in a given year. But if you notice that the probability has been trending steadily downward over time -- or has suddenly plunged in the wake of a severe market downturn -- then you want to re-examine what you're doing and make adjustments to get back on track, such as saving more if you're still working or paring your spending for a while if you've already retired.

The key, though, is to create a retirement income plan and manage it over time, so you can make relatively small corrections along the way, rather than letting things slide and then having to deal with a crisis.

So kudos to you for planning in the first place, and for arranging your financial affairs so that, at this point at least, you appear to have an excellent shot at a secure retirement. If you keep monitoring your progress and stand ready to make tweaks when necessary, chances are your prospects will remain that way.

Walter Updegrave is the editor of If you have a question on retirement or investing that you would like Walter to answer online, send it to him at \n This email address is being protected from spambots. You need JavaScript enabled to view it. ' target='_blank'>This email address is being protected from spambots. You need JavaScript enabled to view it. .

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6-figure oil jobs lead to massive shortage of home builders
Truck-driving mom pulls in six-figures

In the oil boom towns of North Dakota, Texas and Colorado there's a big demand for new homes -- but there's no one to build them.

That's because construction companies keep losing skilled workers to the oil companies, which are offering big bonuses and six-figure salaries.

Even when a new construction worker is hired for a job, it's often not be long before he's poached by an oil company, said Granger MacDonald, owner of The MacDonald Companies, a home builder in Kerrville, Texas.

Recruiters even loiter at truck stops and offer drivers $10,000 signing bonuses to take jobs driving for the oil companies, he said. Some drivers will abandon their loads on the spot, leaving others to finish delivering the goods.

"If you can pass a drug test and have a truck license, you can earn $100,000 a year driving an oil truck," said MacDonald.

With so many carpenters, plumbers, electricians and other trade workers going to work for the oil services companies, builders have to rehire and train crews constantly.

Related: Forget oil, there's a baby boom in North Dakota

"A project that should take 14 months, takes 20," said MacDonald. "I'll have 20 workers on a crew in Midland, Texas, in the heart of the oil patch, and the next week, only 10 will show up. I hire back up to 20 and a week later it will be down to 12 again."

Things are even worse in Williston, North Dakota, where the oil boom has attracted so many newcomers that there is a major housing shortage and many people are forced to live in campers, cars -- even tents.

Terry Meltzer of Granite Peak Development in Williston is trying to bring in workers to build much needed multi-family and single-family homes. Ironically, however, there are few places for new workers to live and the places that are available are very expensive.

Related: Six-figure salaries but homeless

One of the rare places available right now is a 1,150 square-foot apartment that costs $3,200 a month. That's three to four times the rate charged by landlords outside the state's oil patch.

This high cost of living means that home builders have to pay higher wages and charge more for their homes. And the constant hunt for workers means that projects take longer. "You have to work at a slower pace than you'd like," said Meltzer.

Eddy Mitzel's construction outfit builds in the North Dakota cities of Bismarck, Mandan and Dickinson, a good hour and a half or more from Williston -- but it's still hard for him to find crews.

"I'm bringing in workers from other parts of the country where the economy has not yet recovered," he said. "The problem is that as the economy rebounds, this resource is drying up. We need experienced concrete subcontractors, painters, drywall installers and tapers, siders."

Related: My students make twice my salary

In Colorado Springs and Fort Collins, near Colorado's oil boom, builder Marc Towne has had to get creative in order to deal with the labor shortage. He times projects differently now so he can promise his workers steadier work and he uses products that require less skilled manual labor. For framing a home, for example, he buys lumber that's pre-cut, fitted and labeled at the factory.

As the price of oil drops, these builders are hoping their hiring problems will ease.

But there is another threat looming: new oil fields are opening up South of the border. The Mexican government recently ended its 76-year state monopoly by allowing for private and foreign investment into its oil and gas reserves. There are nearly 27 billion barrels of oil believed to be beneath the Gulf of Mexico alone.

"Mexico is where a lot of our labor comes from," said Dallas home builder Michael Turner.

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